CRE 101 · deweyluong.realtor

Commercial Real Estate Due Diligence in Georgia: What Buyers Check Before the Money Goes Hard

The contract starts the clock. Diligence decides the deal. By Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 318 closed sales / $281.2M career volume · 678-707-2498

Going under contract on a commercial property in Georgia does not mean you have bought it. It means you have bought a window — the due diligence period — to verify everything the price assumes: the ownership, the leases, the income, the building, the ground under it, and the loan. When the window closes without a proper termination notice, earnest money typically goes hard. Diligence is where disciplined buyers protect themselves and where rushed buyers inherit problems.

This page lays out what gets checked, in what order, and how the deadline mechanics work — for investors and for business owners buying their own building. It pairs with cap rate and NOI, because diligence is how you find out whether the NOI in the offering was real.

The checklist, in the order experienced buyers run it

• Title and survey: the title commitment shows who actually owns the property, plus liens, easements, restrictions and exceptions. Read it against a current ALTA survey — encroachments and access problems live here, and they are the hardest defects to unwind late.
• Leases, rent roll and estoppels: read every lease, amendment, option and guaranty — never just the broker summary. Cross-check base rent, escalations, expirations, renewal and termination options against the rent roll, then confirm the same facts from the tenants themselves through estoppel certificates.
• Financials: three years of actual operating statements, current year-to-date, real estate tax bills, insurance, and CAM reconciliations. Compare actual income and expenses to the pro forma line by line; the gap is the seller's optimism, priced.
• Physical condition: a third-party property condition assessment, plus roof and HVAC ages and warranties. Deferred maintenance does not disappear at closing — it becomes your capital budget in year one.
• Environmental: a Phase I environmental site assessment. Prior gas station, dry cleaner, auto repair or industrial use on the site or next door is a flag to resolve inside the diligence window, not after it.
• Zoning and use: confirm the current and intended use is permitted — not merely grandfathered — and that a certificate of occupancy exists for it. A legal non-conforming use can limit rebuilding after a casualty.
• Financing and appraisal: lender conditions, the appraisal, and any SBA or conventional loan deadlines run on their own clocks. Track them separately from the diligence clock; they do not pause for each other. See DSCR for the ratio the lender is underwriting.

Worked example. The numbers below are made up to teach the mechanics. This is not a real property.

• Retail property in Gwinnett under contract at $2,400,000, 45-day due diligence period, earnest money refundable until day 45.
• Week 1–2: title commitment is clean except a shared-parking easement the buyer can live with; leases match the rent roll on 4 of 5 tenants.
• Week 3: the fifth lease shows a renewal option at a below-market rent the offering never mentioned — verified income drops, and the cap rate at the contract price falls from 6.5% to about 6.1%.
• Week 4: the condition assessment puts the roof at 3 years of remaining life — an $85,000 near-term capital item — and the Phase I comes back clean.
• Result inside the window: the buyer documents both findings and renegotiates — a price credit for the roof and the option-adjusted income — while the earnest money is still refundable. The same two findings on day 50, after the money went hard, would have been the buyer's problem at the buyer's price.

The lesson is sequencing: order the reports on day one, because title, environmental and condition vendors all have their own lead times, and the clock does not wait for them.

The deadline is a contract mechanic, not a date on a calendar

• When the clock starts: binding agreement date, seller-delivery date, or another trigger — the contract says which. Confirm the trigger in writing.
• Calendar vs. business days: count the period the way the contract counts it, and state each resulting date explicitly.
• Termination notice: how it must be delivered, to whom, and by what time on the last day. A notice sent the wrong way can fail even when sent on time.
• Extensions: whether one exists, what it costs, and when it must be exercised. An extension bought early is cheap insurance; one asked for after expiry is a favor.
• What survives: financing, appraisal and title-cure contingencies may run past diligence — know exactly which protections remain after the money goes hard.

Cho người mua và nhà đầu tư người Việt

Due diligence là giai đoạn kiểm tra sau khi ký hợp đồng mua bất động sản thương mại tại Georgia — thường 30 đến 60 ngày tùy thương lượng. Trong thời gian này người mua kiểm tra: title và survey, mọi hợp đồng thuê và rent roll kèm estoppel từ người thuê, báo cáo tài chính vận hành 3 năm và hóa đơn thuế, tình trạng tòa nhà qua báo cáo PCA (mái, HVAC), báo cáo môi trường Phase I, zoning và giấy phép sử dụng cho mục đích dự định, cùng thẩm định giá và điều kiện khoản vay.

Điểm quan trọng nhất là thời hạn: khi hết due diligence mà không có thông báo chấm dứt gửi đúng cách theo hợp đồng, tiền đặt cọc earnest money thường trở thành không hoàn lại. Mọi thời hạn — ngày bắt đầu tính, ngày kết thúc, cách gửi thông báo, quyền gia hạn — cần được xác nhận bằng văn bản sớm, không đợi đến ngày cuối. Đây là thông tin giáo dục chung, không phải tư vấn pháp lý — hãy làm việc với luật sư của bạn trong mọi giao dịch.

Frequently asked questions

What is due diligence in commercial real estate?

Due diligence is the buyer's investigation period after a commercial property goes under contract. During it the buyer verifies title, survey, leases, rent roll, operating financials, physical condition, environmental history, zoning and permitted use, and financing — before the earnest money goes hard and the buyer is committed. The contract sets the length of the period, what the seller must deliver, and the buyer's right to terminate.

How long is the due diligence period for commercial property in Georgia?

There is no standard length in Georgia — it is negotiated in the contract. Small owner-user deals often run 30 to 45 days; larger or tenanted properties commonly run 45 to 60 days or more, sometimes with paid extensions. What matters is that the clock, the seller-delivery deadlines, and any extension and notice mechanics are written exactly, in calendar or business days as the contract states.

What should a buyer check during commercial due diligence?

In order: title commitment and survey (ownership, liens, easements, encroachments); every lease, amendment and guaranty against the rent roll, plus tenant estoppels; three years of operating statements, tax bills and CAM reconciliations against the seller's pro forma; a property condition assessment and roof/HVAC ages; a Phase I environmental report; zoning and certificate of occupancy for the intended use; and the lender appraisal and loan conditions. Each item either confirms the price or becomes a documented reason to renegotiate or walk.

What happens when the due diligence period ends?

When the period expires without a termination notice given exactly as the contract requires, the buyer's earnest money typically goes hard — it becomes non-refundable except for the remaining contract contingencies, such as financing or title cure. That is why the termination deadline, the notice address and method, and any extension fee should be confirmed in writing well before the last day, not on it.

Thẩm định due diligence khi mua bất động sản thương mại ở Georgia gồm những gì?

Due diligence là giai đoạn sau khi ký hợp đồng, khi người mua kiểm tra toàn bộ: hồ sơ sở hữu và bản đo đạc (title và survey), mọi hợp đồng thuê và rent roll, báo cáo tài chính vận hành 3 năm và thuế, tình trạng tòa nhà (mái, HVAC), báo cáo môi trường Phase I, phân vùng zoning và giấy phép sử dụng, cùng thẩm định giá và điều kiện vay của ngân hàng. Khi hết thời hạn due diligence mà không có thông báo chấm dứt đúng cách, tiền đặt cọc earnest money thường trở thành không hoàn lại. Hãy xác nhận mọi thời hạn bằng văn bản trước ngày cuối.

This page is general education, not legal, tax, or accounting advice. Contract terms vary by document and situation — confirm your diligence deadlines and notice mechanics with your attorney before you sign. Túy “Dewey” Luong, CCIM is a real estate broker, not an attorney.