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Commercial Real Estate Inspection vs. Home Inspection

Jun 26, 2008
What is the difference between a Commercial Real Estate Inspection and a Home Inspection?
To answer this question it's best to look at why the deal is being done in the first place.

A home purchase deals to a large degree on emotion. Things like, "I love the house", "what a beautiful kitchen", "great backyard" and on and on. People usually buy homes because they really love something about the home or the location.

Commercial Real Estate purchases deal in money. The basic question is "How much?" How much can I make on this investment? This is what the commercial real estate buyer is looking at: the bottom line. How much will it cost to install the new heating and AC system it needs, the new roof, how much can I make on the new rents? And on and on.

With commercial real estate inspections we are usually looking at what is going to have to be done in the next five years. Does the roof look like it will last at least five more years with normal maintenance? Can the heating system get by? Does the electrical need to be upgraded due to the change in use of the building? Those sorts of questions are the usual focus. This is always tempered with consulting the buyer to find out what it is they are looking for and what their particular concerns are.

We are constantly looking at a home from a performance standpoint. Does the water get hot in the bathroom in a reasonable amount of time? Will you get scalded when the toilet is flushed if you are in the shower? Do the windows open properly, do you have enough plugs, and on and on with a home.

With a commercial real estate inspection we are looking at life spans of the five major systems: electrical, plumbing, heating and AC, roofing and structure. The focus of a commercial inspection is usually much more on the major systems than the interior cosmetic issues. If the carpet is a bit worn in a commercial inspection we will note it but the buyer usually does not really care. He wants to know What do I have to spend money on now or in the near future on this place?

With commercial inspections we stress the industry standards for life expectancies. These can vary greatly depending on the system and the quality of the original construction but generally speaking the industry standards for electrical systems is if it is approx 50 years old or older it is time to upgrade it, plumbing is approx. 40-60 years depending on many variables, commercial roofing is usually a flat roof and these for the most part are approx. 10-15 years. Heating and AC systems that are roof mounted are approx. 15-17 years of expected life. The structure is the biggest variable. These can last from 70-100+ years depending on many things.

The cost of a residential inspection starts at $325.00 for a home. The usual price for commercial real estate inspections currently is approx. 10 cents per sq. ft. When the sites get very large or there are numerous complexities the prices will vary. If the buyer has some particular issues that need more detailed inspections, such as Heating and AC or structural or electrical we will have specialists at the inspection. These costs will be added to the overall cost and time it will take to complete the inspection.
You should deal only with qualified professionals who have many years in the construction trades as general contractors and thousands of inspections under their belt.
About the Author
Bob has been a Certified Inspector since 1994 and a licensed contractor for nearly 4o years. For more information about commercial real estate inspections visit his website at
http://www.commercialrealestateinspectors.com to find out how he can help with your real estate inspection.
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