Here’s a way to speed up your sales that I think more sellers should consider…
Use an access agreement.
Most sellers and buyers don’t start the buyer’s inspection period until they’ve negotiated a purchase and sale contract. Why wait?
An access agreement allows the buyer to start doing its due diligence while you’re negotiating the purchase and sale contract. An access agreement has 2 main components:
Inspections: First, it lets the buyer enter the property and do its physical inspections. It has the typical insurance, indemnity and other seller protection provisions from a purchase and sale contract.
Confi: Second, it has confidentiality provisions so a seller can give the buyer whatever reports and other due diligence items it has.
I’ve had several people tell me that it may take longer to negotiate the purchase agreement because the buyer may focus more on due diligence than negotiating the contract. I haven’t had this happen to me with my deals. But, even if this happens, so what?
Let’s say an LOI gives the buyer a 30-day inspection period and it would normally take 10 days to negotiate the contract. Who cares if it takes you 20 days to negotiate the contract because the buyer is more focused on due diligence? You still come out ahead because the inspection period has already started.
Incidentally, if you don’t have the inspection period running simultaneously, then I think access agreements aren’t worth it.