Should Sellers Pay for Commercial Building Inspections

You’ve found the perfect space for your business, the location is ideal, the price seems right, and you’re ready to sign. But beneath those freshly painted walls could lurk costly surprises: structural weaknesses, outdated electrical systems, or hidden water damage. Only a professional commercial inspection can reveal these risks before they become your financial burden.

This raises a critical question in any commercial real estate transaction: Who typically covers the cost of these vital inspections, the buyer or the seller? More importantly, what strategic advantages could this decision hold for your deal? In this guide, we’ll break down:

• The industry standards for inspection payments
• How negotiation leverage shifts based on who pays
• Why this “who pays” question matters more than you think. 

What is a Commercial Building Inspection

A commercial inspection is performed by a licensed professional who assesses the following:

• Structure (roof, foundation, and walls).
• Electrical systems. 
• Plumbing systems. 
• Heating, Ventilation, and Air Conditioning systems.
• Meeting the safety code.

Further (mold, radon, pests, environmental hazards) screening connected withthe  property and contract can also be inspected on special request and against an extra payment. 

On average, these inspections cost:

• For properties less than 5000 square feet, it may cost $1,000 to $3,000
• For medium-sized commercial buildings, it may cost $3,000 to $6,000 and up to $12,000 for larger commercial buildings. 

Being aware of that, you prepare in advance.

Who Should Pay For It

In the U.S., a buyer or lessee typically pays the cost of conducting commercial building inspections unless the seller agrees otherwise in the purchase offer. 

The buyers like being independent. When sellers pay, a potential conflict of interest arises, as inspectors may withhold any negative results.

But can Sellers Pay

Yes, and it’s sometimes strategic. Let’s discuss it further. 

Seller-paid P-listing Inspections 

The sellers can conduct inspections and post the report online. This can:

• Accelerate deals.
• Show transparency and generate buyer trust.
• It may discourage lowball offers. 

Nevertheless, many buyers continue to request their own inspections to verify results.

The Role of Commercial Building Inspection In Local Economic Growth

Sellers who invest in pre-listing inspections can facilitate a smoother transaction. That contributes to local economic growth by:

• Decreasing the vacancy periods.
• Avoiding unexpected repair bills.
• Maintaining confidence in commercial property markets 

This generates a healthier community and business.

Real-world example: Genspec’s Buyer-Paid Model

Genspec, a Canadian construction inspection company, makes this definitive statement:

“Paying for the building inspection is generally the buyer’s responsibility, unless specified otherwise in the Offer of Purchase.”

Although this is a Canadian example, it reflects American practice.

Why Buyers Insist On Paying

It is justified why buyers want to have the financial control of inspections:

• Conflict of interest, none. They are their inspector, not the seller.
• The ability to employ the specialist they like.
• Issues revealed can justify lower offers.

Exceptions and Negotiations

Although rare, arrangements can be negotiated, especially in a seller’s market.

• The seller is willing to cover part of the inspection cost.
• The seller has a pre-listing inspection and gives a full report.
• The inspection is paid by the buyer, but a part of the cost is refunded by the seller.
• It is common, even then, for buyers to request a second, independent survey.

When Seller-Paid Inspections Help Everyone 

In certain markets, the inspections paid by the seller are normal. It comes in handy by:

• Increasing the pace of rental and minimizing vacancy rates.
• Establishing credibility, more so with quality inspection reports.
• Boosting local economies – agents, contractors, and lenders all benefit when deals are closed effectively.

That aligns with how commercial building inspections can contribute to local economic growth, strengthening communities and fewer stalled deals.

Tips for Sellers

If you’re considering paying for a commercial building inspection, keep these in mind:

• Select a good inspector who has experience in the commercial field.
• Share the report with potential buyers.
• Encourage buyers to invite their inspectors, but don’t force it.
• Use it as a selling point to stress transparency.

Tips for Buyers

If you are the buyer, then you need to follow these few tips to save your interests:

• Include inspection contingencies in offer.
• Select your own inspector so that no one influences you.
• Be specific about the inspection’s scope: structural, systems, and environmental.
• Use the inspection’s findings in renegotiation where necessary.

Summary: Who Pays and Why It Matters

• By default, buyers in the U.S. pay for commercial building inspections.
• Sellers who opt for pre-pay inspections or reimburse inspection costs to the buyers expedite and streamline the transaction.
• Independent inspection helps establish credibility, retain bargaining power, and sustain the local economy.
• Commercial building inspection in local economic growth isn’t just about one building; it touches everyone.

Final Takeaway

Inspections are important, whether the buyer pays for them or the seller. They ensure your investment, unveil hidden expenses, and make a healthy and efficient transaction.

Do not put your commercial property deal on chance. Inspect360 can make things happen for you. We offer:

• Thorough commercial building inspections.
• Self-evaluations of your project.
• Quick professional inspection reports.
• Buyers and sellers have peace of mind.

Schedule your inspection today with Inspect360, and ensure your deal is built on a solid foundation.