Did you know that homes tend to sell the fastest in the United States during the warmer months? If you’re looking to buy or invest in property soon, you’ll probably have a lot more to consider when closing on commercial real estate properties. As with most things, there are many steps to the process of purchasing commercial real estate.
From the initial viewing of properties to putting in an official offer, the real sticky situations arise between the day an offer is accepted and when the final signature is put on the last closing document. Finding and securing all the necessary documents for your closing transaction can become a lot of hard work. Closing on a commercial property can often be even more difficult.
Because of the wide use for commercial properties, there are more factors that affect the steps included in the closing process.
Here are some of the things you may want to consider when closing on commercial real estate properties:
- Multiple Parties
- More Regulations
- Extended Contract
- Land Survey
- Title Insurance Policy Issues
- Call Rochford Law & Real Estate Title for Help With Commercial Real Estate Closings
Multiple Parties
When you’re dealing with residential real estate, it’s more likely to be a streamlined process. This is typically because residential purchasing agreements tend to include a singular individual buyer or a married couple. The process for closing and documentation tends to move forward much faster.
However, with commercial real estate, these processes can not only take much more time, but closing on these properties can often cost a lot more. These properties tend to involve multiple units which can generally drive up the price tag. This factor usually necessitates the involvement of investors or business partners in order to secure the proper amount of financing. Commercial real estate investments can make it more difficult to make decisions quickly as you will likely have to deal with multiple parties in your transaction.
More Regulations
When dealing with commercial properties, these types of real estate are held to different standards than residential properties. Residential properties must adhere to the Real Estate Settlement Procedures Act (RESPA), whereas commercial real estate transactions aren’t judged by the standards of RESPA. Commercial properties must meet a series of other regulations in order to function.
For example, commercial properties must sometimes complete seismic risk assessments to ensure they are capable of withstanding an earthquake— even in Tennessee. This assessment is done because commercial properties have the potential to contain large amounts of people. In order to shield tenants from preventable harm and prevent legal issues, more regulations are put in place to work toward this effort.
Commercial real estate closings in Nashville necessitate an experienced real estate attorney. Visit Rochford Law & Real Estate Title today!
Extended Contract
When dealing with commercial real estate, there are often extra contract considerations that come into play. These considerations will likely be reflected in the contract each party will sign on closing day. Extra stipulations will need to be enumerated, proven, and documented, which can make the final contract much longer, more intricate, and detailed. Commercial contracts take the closing process a step further to account for any additional considerations.
Land Survey
While land surveys are not always required, some commercial properties will need to go through this process before signing the closing documents. A land survey can provide a lot of important information for the buyer, including some warnings if there are unknown encumbrances or easements associated with the property. Environmental aspects of a commercial property can also sometimes be assessed through a land survey, as can the exact property boundaries.
Knowledge of these land specifics can provide long-term benefits for the buyer and add to the pre-closing processes that need to be addressed.
Title Insurance Issues
When it comes to purchasing a piece of commercial real estate, dealing with title insurance issues at the start can be beneficial. The issuance of residential title insurance policies often require you and your attorney to sort through a wide range of documents to verify information, sort out small mistakes, and find previously-unknown information.
Commercial properties however, involve a wider range of individuals or businesses, are used for different purposes, and are generally larger. This tends to mean there is more information to find and a variety of types of information available. With various complications that can occur, and much more information to discover and sift through, a closing attorney can help ensure you don’t miss a thing. These complications are reflected in a more complex title insurance policy for commercial real estate closings.
Call Rochford Law & Real Estate Title for Help With Commercial Real Estate Closings
These real estate closing transactions can be difficult, but very rewarding. The guidance of a professional real estate attorney can make these processes as smooth as possible, covering your bases so you don’t find yourself with a headache down the road.
Rochford Law & Real Estate Title has been guiding people and businesses through the commercial closing process in the Nashville area for years.
