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Straight answers from Scott Harris
Certification, cost, scope, ASTM E2018 and Property Condition Reports
Don’t see your question? Call Scott at (503) 679-7184. You’ll get your scope and price in a written proposal.
Yes, I am a NACHI Certified Commercial Inspector, trained at ITI in Denver and a FREA Certified Commercial Inspector.
Yes, I am a licensed inspector and licensed unlimited general contractor in the State of Oregon. I am also a graduate engineer with 35+ years’ experience. My complete résumé is available on the Resume page. There is no government licensing specifically for commercial inspections.
The cost for your commercial inspection is based on the scope that you choose and based upon the property involved. The cost will be included in our written proposal.
The scope describes the areas, components, and systems that are included in your commercial inspection. It will identify the condition of existing systems and components. The client will decide on the scope, based on specific needs and expectations. The scope will be included in the written proposal.
Commercial inspections are referenced to ASTM E2018, Standard Guide for Property Condition Assessments. This is the only nationally and internationally recognized standard for the inspection and reporting of the condition of commercial property. Depending on your scope, specific sections of E2018 will be used. The full E2018 may not be used, since there are sections of it that may not apply to your particular inspection scope or requirements.
A Property Condition Assessment (PCA) is the process of observing the property, interviewing sources, and reviewing documentation in order to develop a PCR of a commercial real estate’s current physical condition.
A Property Condition Report is a written report, prepared with reference to ASTM E2018, that outlines the observations and opinions as to the subject property’s condition.
ASTM International (formerly the American Society for Testing and Materials) publishes ASTM E2018, the only recognized standard for the inspection and reporting on the condition of commercial property. It is recognized internationally. This is the standard that lending institutions will be looking for and basing their loan decisions upon. It includes financial projections on repairs and maintenance that help banks and owners plan for the financial future.
“It is not the intention of property inspection services to devalue property or ‘kill’ any deal. What I do is investigate and report on the condition of property.”
Scott Harris
Picture an agent who works for months with a client and gets an accepted bid on a property. The fear is that a Property Condition Assessment (PCA) may bring undue attention to material defects or deferred maintenance problems that cause the buyer to back out of the purchase.
This is possible, but far from typical. Should a professional third-party PCA bring to light previously unknown or unaccounted-for defects, these may affect the property value. A reasonable seller will choose to either adjust the price or correct some of the findings. Once documented, it is an unusual seller who will not be willing to consider the cost of legitimate repair and maintenance in the overall financing. Deferred maintenance findings are also usually a sign of reduced cash flow, and therefore very likely a more motivated seller.
My goal is a well-informed buyer or owner who can effectively plan the expenses of ownership well beyond the purchase or the time of assessment. This is precisely what lenders want to know, and why they seek PCAs based on the ASTM standard. It specifically provides a five-year outlook of predictable expenses.
Someone may back out of a purchase after reviewing a completed PCA. They may find that the property won’t fit their needs or their projected financial package. That is not the worst thing that could happen. The client will still have their needs, and they will move on to have them met. They will also have proof that their agent, who recommended the assessment, was looking out for their interests. The next time they need anything, it’s very unlikely they will want any other representation. In my experience, that kind of loyalty and return business is the most important part of the real estate business.
The client buys a property without planning for unknown expenses. If those expenses turn out to be significant and show up soon after the purchase, the whole transaction becomes a bad experience. The deal went through, but the relationship with that client may be damaged beyond repair.
This is just food for thought, based on my own experience and opinions.
Sincerely, Scott Harris
Tell Scott about your property. Your scope and price come in a written proposal before any work begins.