Pretty common especially in the "main street" end of the market. Generally seller will be expected to put in the legwork to get things documented and pulled together, as a prerequisite for beginning marketing the business for sale. If you want an edge in the deal, but also to take necessary risk mitigation steps, I might help the seller with some of that legwork, in exchange for ~3 months of exclusivity to submit an LOI. It will help them do what's necessary to ever sell their business, while giving you first refusal and probably a bit of preliminary DD along the way.

Thanks David - very helpful. On deals like this - micro, informal - is there a rule of thumb for hours/cost of DD vs deal size?