How to Accomplish Effective Due Diligence
Concepts
Due Diligence by Definition - making sure things are right with inspections.
Letter of Intent - A sample at bottom
Formal Agreement
Inspection and Review Period
Environmental Inspections
Easements
Encroachments
Code Violations
Zoning Use
Allowed Use
A simple Letter of Intent
Dear Property Owner,
My name is _______ and I am a real estate investor from Vancouver, BC. In a recent visit to your area I become aware that you may consider selling a shopping center you own. I would like to purcahse that center and I will pay you $10,000,000 cash at closing. The closing will occur 60 days following my approval of my due diligence, and I will have a reasonable time to complete the necessary inspections. This time will be detailed in the formal agreement once the seller has supplied the buyer with proerpty data.
If I do not approve of my due diligence inspections and review for any reason whatsoever, then I may withdraw from the contract, and any deposit placed in escrow by me, as indicated by the terms of the contract, will promptly be refunded to me. If this is acceptable to you (the seller), then so indicate below and I will have my lawyer draft the formal agreement for your review. That document will be in your hands within five working days from your notice to me that these or any other mutually acceptable terms are accepted by both parties.
As this is a letter of intent and not a formal contract, no binding agreement to purchase and sell will be in effect until the parties have executed a formal agreement. However, both parties agree that they will act in good faith in the negotiations of this agreement, and if this or a subsequent letter of intent is acceptable to both parties, the seller agrees not to negotiate with any other party for the sale of this property for a period of 30 days so that the formal agreement can be drafted, reviewed, and if acceptable, executed.
If I don't hear from you on this matter by noon this coming Friday, then this letter of intent shall be considered null and void.
Sincerely
________
Due Diligence by Definition - making sure things are right with inspections.
Letter of Intent - A sample at bottom
Formal Agreement
Inspection and Review Period
Environmental Inspections
Easements
Encroachments
Code Violations
Zoning Use
Allowed Use
A simple Letter of Intent
Dear Property Owner,
My name is _______ and I am a real estate investor from Vancouver, BC. In a recent visit to your area I become aware that you may consider selling a shopping center you own. I would like to purcahse that center and I will pay you $10,000,000 cash at closing. The closing will occur 60 days following my approval of my due diligence, and I will have a reasonable time to complete the necessary inspections. This time will be detailed in the formal agreement once the seller has supplied the buyer with proerpty data.
If I do not approve of my due diligence inspections and review for any reason whatsoever, then I may withdraw from the contract, and any deposit placed in escrow by me, as indicated by the terms of the contract, will promptly be refunded to me. If this is acceptable to you (the seller), then so indicate below and I will have my lawyer draft the formal agreement for your review. That document will be in your hands within five working days from your notice to me that these or any other mutually acceptable terms are accepted by both parties.
As this is a letter of intent and not a formal contract, no binding agreement to purchase and sell will be in effect until the parties have executed a formal agreement. However, both parties agree that they will act in good faith in the negotiations of this agreement, and if this or a subsequent letter of intent is acceptable to both parties, the seller agrees not to negotiate with any other party for the sale of this property for a period of 30 days so that the formal agreement can be drafted, reviewed, and if acceptable, executed.
If I don't hear from you on this matter by noon this coming Friday, then this letter of intent shall be considered null and void.
Sincerely
________
posted by Patrick @ 3:13 PM
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