Updated August 16, 2026
On commercial multifamily, the default is neither party — the building is sold as-is, and the buyer's inspection is how they decide whether to proceed at the agreed price, not a list of demands. That is genuinely different from a house sale, where a repair request is a normal part of the choreography. In practice, though, a meaningful inspection finding on an LA apartment building does get negotiated, and it usually gets negotiated as a price adjustment or a credit rather than as work the seller performs. The question that determines the outcome is not who is responsible in principle. It is what the purchase agreement says the buyer may do with what they find, and how much competition there was for the building.
As-is means the buyer accepts the physical condition, subject to their diligence. It does not waive the seller's disclosure obligations, and it does not cover things the seller knew and concealed.
The buyer's remedy is usually to terminate, not to demand. During the contingency period, a buyer who does not like what the inspection found can walk with their deposit. That is the leverage — and it is real leverage, because a seller who loses a buyer at week three re-enters the market with a building that has a story attached.
Retrading is a negotiation, not a right. A buyer who comes back asking for $150,000 after inspections is asking, not exercising a contractual entitlement. Whether they get it depends on the seller's alternatives.
Sellers should expect a conversation on a short list of items, and should not expect one on the rest.
Genuine deferred capital items. A roof at the end of its life, failing sewer lateral, aged electrical panels, a boiler on its last year. These are real numbers and they move price.
Life-safety and code items. Anything a lender or an inspector flags as a condition of funding is not a preference — it has to be resolved for the deal to close, so it gets addressed one way or another.
Incomplete mandated work. An unfinished soft-story retrofit or an outstanding balcony inspection obligation is a known, quantifiable cost, and buyers price it precisely.
Things that differ from what was represented. If the offering package said the roof was replaced in 2021 and it was not, that is not a repair negotiation — it is a credibility problem that affects everything else in the file.
What generally does not move the price: cosmetic condition, normal wear in units, and anything visible on the tour that the buyer priced when they bid.
When something does get negotiated, a credit is almost always the better structure for both sides.
For the seller. No contractor management, no schedule risk, no warranty exposure, no work happening in occupied units during escrow. The cost is fixed at the credit amount.
For the buyer. They control scope, contractor, and timing, and they usually intend to do the work their own way as part of a broader plan.
Watch the lender treatment. Large credits can affect the loan sizing or require specific handling on the settlement statement. Structure it with escrow and the lender's knowledge rather than as a side arrangement.
The main exception is work that must be complete before closing to satisfy a lender or a regulator. That has to actually be done, and the parties negotiate who does it and who pays.
Do your own inspection before you list. A pre-listing property condition report is the single most effective defense against a late retrade. You find what the buyer would find, you decide what to fix and what to disclose, and you price accordingly — from a position of knowing.
Disclose specifically and in writing. A known condition, disclosed clearly and reflected in the price, is very hard to retrade on. That is the entire mechanism: buyers retrade on surprises, not on facts.
Gather the maintenance and capital history. Invoices, permits, warranties. Documentation of what has been done reduces the estimated cost of what remains.
Create competition. The most reliable protection against a retrade is another buyer. A seller with a credible backup offer has a short conversation about a $150,000 request; a seller with one buyer has a long one.
Sell as-is, but do not sell blind. Commission your own condition report before going to market, disclose what it finds, and price the building accordingly. Then, when the buyer's inspection returns the same list, the answer is straightforward: that was known, it was disclosed, and it is already in the price. Where something genuinely new and material turns up, negotiate a credit rather than agreeing to perform work in occupied units against a closing deadline.
Can the buyer walk away after inspections?
During the contingency period, generally yes, with their deposit returned, depending on the contract. Once contingencies are released the deposit typically becomes at risk, which is why the release of contingencies is the real milestone in a commercial escrow rather than the offer.
Should I fix things before listing?
Fix what is cheap, visible, and likely to be flagged. Do not undertake major capital work immediately before a sale — you rarely recover the full cost, and a buyer who intends to renovate would rather have the credit and do it their way.
What if the inspection finds something I did not know about?
Disclose it immediately and deal with it directly. An unknown condition, discovered and handled openly, is a normal negotiation. The same condition handled evasively becomes a claim after close.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →