Understand each party’s role
Ask whether the counterparty is funding, arranging, participating in or syndicating the proposed capital. Determine who makes the credit decision and whether another approval or financing source is required. A direct lender can still work with partners; the key question is which commitments and conditions support your closing.
Test the proposed execution
Review relevant completed transactions and ask for appropriate references through a direct discussion. Compare the plan for valuation, environmental review, title, legal documentation and third-party reports. A promised closing date has limited value if the dependencies are unknown.
Read what happens if the deal changes
Clarify deposits, diligence costs, exclusivity, minimum interest, exit fees and refund provisions. Identify which conditions can change pricing or proceeds and who bears costs if the financing does not close. Have counsel review binding obligations before relying on indicative terms.
Protect the closing process
Independently verify the identity of counterparties and wire instructions. Do not rely on an email address change or a rushed payment request. Keep one record of current terms, open conditions and decision owners.