Commercial real estate can be complex, which is why it’s important to be represented well during the purchasing process and throughout closing. With a commercial real estate attorney, you will be able to handle any real estate transaction and manage the closing, even if you are the one expected to draft the closing documents and still need to do your own due diligence on the buyer.
The commercial real estate closing process is not quite the same as the residential process, which is why it pays to have someone assist you. The four main parts of a commercial real estate closing include:
- Escrow
- Signing authority verification
- Due diligence
- Signing/processing title and closing documents
With these, you’ll start with escrow, which is when the buyer will place money into escrow until all the requirements that were set are met. If there are issues with an inspection or other contingencies, the buyer may walk away with those funds and cancel the deal, in some cases.
If the sale will continue, then the signing authority will need to be authorized. This is because the deal is actually between two business entities rather than two individuals. There will need to be proof that the person making the purchase is legally authorized to do so.
Commercial buyers and sellers must then do their due diligence. They’ll work to set up the deal in a structure that protects them.
Finally, you’ll go on to the closing. Your attorney will help you go over the title report and draft closing documents. Disclosures, assignments of liability and other documents may be included in the closing documents, so it’s important to make sure they are thorough and ready for the closing table.