Buying & Due Diligence
What actually happens between an accepted offer and a closing — and why most of it is coordination.
Market Perspective
You found the building. You have walked it more than once, you can picture where the operatories or the exam rooms go, and you have decided you want it. Now someone hands you a purchase agreement.
A lot of first-time buyers assume the hard part is behind them at this point. Finding the right property felt like the difficult work. Everything after it feels administrative.
It is not. The weeks between an accepted offer and a closing are where a purchase either holds together or quietly comes apart, and almost none of that work is interesting. It is calendars, documents, phone calls, and follow-up.
What follows is a plain description of what happens in that window, and where practice owners tend to get into trouble.
The Agreement
Most of the attention goes to the number. The number matters. But the rest of the document determines how much room you have to change your mind.
A well-structured agreement gives the buyer a defined period to investigate the property and a defined way to walk away or renegotiate if what turns up is not what was expected. How long that period runs, what it covers, how it can be extended, how the deposit is held, and when that deposit stops being refundable — those are the buyer’s protections, and they are negotiable.
A seller who wants certainty will push for a short investigation window and an early release of deposit. A buyer who has not yet talked to a lender or walked the building with a contractor may need more time than the standard form allows.
Your attorney drafts and reviews the language. The practical question underneath it — how long do you actually need, and what has to happen inside that window — is a real estate question. It is better answered before signing than discovered afterward.
The Real Work
Ask most people what due diligence means and they will describe ordering a building inspection.
The inspection is one input. So is the survey, the title commitment, the environmental report, the zoning confirmation, the utility capacity, the lender’s appraisal, and the contractor’s early pricing. Each of those comes from a different party, on a different timeline, with a different level of urgency about your deadline.
The work is running all of them at once, in a sensible order, and reacting to what they turn up while you still have contractual options. A title exception that surfaces on day forty of a forty-five-day period is a very different problem than the same exception on day twelve.
That sequencing is most of the value. The reports themselves you can buy from anyone. Knowing what to order first, what depends on what, and what a finding actually means for your practice is the harder part.
The Building
The physical review covers more than whether the roof leaks. For a healthcare buildout, the questions that matter most are usually about capacity and constraint:
Roof age and condition, and whether anyone can produce documentation or a transferable warranty
HVAC capacity and condition, including whether the system can support clinical equipment and the ventilation your specialty requires
Electrical service size and panel capacity relative to what the buildout will add
Plumbing, waste lines, and any separators or interceptors your use will require
Structural conditions that limit where walls, plumbing, or heavy equipment can go
Accessibility, and what obligations a renovation triggers
Deferred maintenance the seller has been living with and stopped noticing
Licensed inspectors and, where appropriate, engineers produce those findings. What matters to you is what they cost and whether they change the deal. A twelve-year-old roof is not a reason to walk away. It is a number that belongs either in your renovation budget or in a renegotiation.
The Site
A building can be in excellent condition and still be the wrong building.
Confirm the use is permitted. Not similar to permitted — permitted, for your specific use, at that address, under the current ordinance. Some healthcare uses are allowed by right in a given district and some require a special land use approval with a public hearing attached. Veterinary practices in particular run into this more often than owners expect.
The title commitment tells you what is attached to the property: easements, restrictions, unresolved liens, access agreements, and sometimes recorded covenants limiting what kind of business can operate there. Retail centers and former bank sites occasionally carry use restrictions left over from prior transactions.
The survey shows where things actually are. Parking counts, setbacks, encroachments, and whether the drive approach you assumed you had sits on your parcel. If your plan adds square footage or reworks the site, this is where you learn whether it fits.
Parking deserves its own look. The ordinance has a required ratio. Your practice has an actual demand at its busiest hour, counting staff, patients arriving, and patients not yet gone. Those two numbers are rarely the same, and only one of them appears on a listing sheet.
Environmental
Lenders on commercial property commonly require a Phase I environmental site assessment. It is a records and site-history review performed by an environmental professional, not a soil test.
If the Phase I identifies a recognized environmental condition — a former dry cleaner, a gas station, an auto repair use, a manufacturing history, a neighboring property with a known issue — the next step may be a Phase II involving actual sampling. That takes time and money, and it can change a lender’s position on the loan.
Property that looks like a straightforward conversion sometimes has a complicated past. It is a reason to start the environmental work early rather than treating it as a formality that clears on its own.
Utilities & Infrastructure
Power, water, sanitary sewer, gas, and data all have to support the practice you intend to run, not the business that used to be there.
A retail tenant’s electrical service may be nowhere near what a practice with imaging, sterilization, compressors, and vacuum requires. A building on septic has a very different renovation path than one on municipal sewer. Fiber may be at the street, or it may be a construction project with a lead time nobody built into the schedule.
These are all answerable questions. They just have to be asked while you still have the contractual right to react to the answers.
The Project
One of the more common and more expensive mistakes is treating construction as something that begins after closing.
If you intend to renovate, and most practice buyers do, you want a contractor walking the building during the investigation period and giving you at least order-of-magnitude pricing on the scope you have in mind. You want to know whether the layout you are imagining is achievable inside that shell before you own it.
Early involvement tells you something about the team, too. A contractor who walks a building and immediately names the three things that will drive the budget is a different partner than one who produces a number without asking questions.
If you have not settled on how to structure that side of the project, it is worth understanding the choice between an independent architect and a design-build team, and the differences between a general contractor, a developer, and a design-build firm, before you start interviewing.
Financing
Financing is not a single step at the end. It is a parallel process with its own requirements, several of which depend on the diligence work.
The lender will order an appraisal. It will want the environmental report. It may have views on the survey, the title work, the condition of the building, and the projected cost of the buildout. Programs with additional underwriting layers add additional time.
The appraisal is worth watching closely. If it lands below the purchase price, it can reduce the lender’s proceeds or create a gap that has to be solved — through more equity, a renegotiated price, or a restructured deal.
Loan approval and closing dates written into the purchase agreement should be set against realistic lender timelines rather than optimistic ones.
Sequencing
Depending on the agreement, the dates that carry real consequence may include the end of the investigation period, a financing contingency deadline, the date the deposit becomes nonrefundable, and closing.
Everything else should be scheduled backward from those. An environmental assessment that takes three weeks cannot be ordered in week four of a five-week period. A zoning confirmation that depends on a municipality responding should not be the last item on the list.
And something will surface. It usually does. When it does, the useful question is what your options are that day: renegotiate the price, extend the period, require a repair, absorb it into the budget, or terminate. Those options exist right up until a deadline passes, and then they do not.
After Closing
Closing is not the finish line. The better outcome is closing on a Tuesday with a contractor able to start.
Drawings, permit preparation, contractor selection, long-lead equipment planning, and utility coordination can all be advanced during the diligence period. Every week of that work deferred until after closing is a week of carrying a mortgage on a building that is not producing anything.
For a startup or a relocation, that gap is the part of the schedule that hurts most. It is also the part most within your control.
The Point
None of the individual pieces of a building purchase are mysterious. Inspectors inspect, title companies research title, lenders underwrite, contractors price work. Each of those parties is competent at their own piece.
Purchases go badly for a different reason. Rarely is it one missed item. It is a schedule nobody was holding, a report that arrived after the window closed, or a finding whose significance nobody connected to a deadline until it was too late to use it.
Someone has to keep all of it moving and translate what comes back into decisions you can actually make. On the purchases we handle, that is the job.
Related Insights
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Read the perspective → Market Perspective · Design & ConstructionThree terms used interchangeably that describe three different sets of responsibilities.
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Read the guide →Building Purchases
We manage the diligence period for practice owners buying their own buildings — the schedule, the vendors, the findings, and what each one means for the deal.
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