Purchasing commercial property is a significant financial endeavor and can be a cornerstone for business growth and success. Regardless of the location of the property or size of the transaction, it’s crucial to understand the intricacies of the commercial real estate closing process.
This article aims to provide an overview and explain the importance of having a commercial real estate attorney on your team.
1. Negotiating and Drafting the Purchase Agreement
Once you’ve decided on a property, the next step is to draft and negotiate a Purchase and Sale Agreement. This document will outline the terms of the sale, including price, contingencies, timelines, and responsibilities of each party. We can work with you to ensure that the agreement is fair, addresses your needs, and provides safeguards against potential issues.
2. Due Diligence and Property Inspection
Once you have entered into a contract, but before committing to any property, it’s important to conduct thorough due diligence. This phase involves researching the property’s history, reviewing its title for any defects or liens, and inspecting the premises for potential structural or environmental issues.
Often, there are local regulations or zoning laws that need to be considered. Our commercial real estate attorneys can help with the process by uncovering potential legal pitfalls and ensuring that you don’t face any unexpected surprises after the purchase.
3. Securing Financing
Most commercial property transactions will require some form of financing. Whether it’s through a traditional mortgage, a commercial loan, or private financing, it’s vital to understand the terms. An attorney can review loan documents to ensure you are protected and not subject to unfavorable terms.
4. Title Review and Insurance
After the Purchase and Sale Agreement is signed, a title company will typically be engaged to conduct a thorough title search. They’ll check for any defects or liens that might affect the property’s transfer.
Based on this review, title insurance will be issued, protecting the buyer from any undiscovered title issues. We can help interpret the title report and advise on any potential concerns or necessary remedies.
5. Preparing for Closing
Leading up to the closing date, several tasks need to be completed:
- Ensuring that any agreed-upon repairs or modifications by the seller are done.
- Reviewing the final closing documents.
- Securing the necessary funds for closing.
Our attorneys will help coordinate with the title company, lender, and other involved parties to ensure a smooth process.
6. Closing Day
On the closing day, all parties meet to finalize the transaction. Documents are signed, funds are exchanged, and the property’s title is transferred to the buyer. During this process, we can help:
- Ensure that all documents are correctly executed.
- Verify that funds are appropriately distributed.
- Confirm that all agreed-upon conditions are met.
- Address any last-minute issues or concerns that arise.
7. Post-Closing Matters
Even after the closing is concluded, there might still be pending matters, like prorations, lease transfers, or possession issues. Our team will continue to guide and represent you in resolving these matters.
Why It’s Crucial to Have a Commercial Real Estate Attorney On Your Side
- Expertise: Commercial transactions are intricate, with many moving parts. The team at Anderson Jones can help you navigate this maze, ensuring that all aspects are addressed.
- Risk Mitigation: From potential title defects to contract disputes, numerous issues can arise. Having legal counsel can prevent or quickly resolve these challenges.
- Negotiation Power: An attorney on your side can be a powerful negotiator, ensuring that you get the best deal possible and that your interests are protected.
- Peace of Mind: Knowing that a professional is overseeing the process can provide significant peace of mind, allowing you to focus on your business.
If you’re considering purchasing a commercial property, the process requires careful consideration and expertise on your side. By working with the team here at Anderson Jones, PLLC your business can ensure a smooth, efficient, and risk-free transaction. Contact us today to schedule a consultation and start the journey with your new commercial real estate property!