Whether it is your first or fifth, closing a real estate deal is serious business. Just as with residential real estate, every detail matters when closing a commercial real estate transaction.
If you are investing in commercial real estate, it is important that you take these legal issues into account.
Pay attention to the property’s valuation
If you are shopping for any product, it makes sense to walk around and compare the prices of similar products. In commercial real estate, both current income and potential future income associated with the property can help you come up with fair pricing.
Working with an experienced commercial appraiser can help you come up with a proper valuation for the property in question.
Never overlook due diligence
Granted the transaction’s financial and legal implications, you want to carry out considerable investigation before closing a commercial real estate deal. This allows you to know exactly what is involved in the transaction and helps you avoid any problems with the property’s intended use.
For instance, you want to be certain that the property’s zoning with not conflict with its intended use. Also, you want to be certain that the property’s title will identify liens and easements. Due diligence can help you avoid these costly errors.
Look out for potential liabilities
Before closing a commercial real estate transaction, you want to be sure you are not assuming liabilities incurred by the previous property owners or occupiers.
For instance, if you learn about an environmental hazard after closing a commercial real estate deal, it will be your job to fix the hazard regardless of who actually caused it. Such liabilities can be quite costly, and this is why you need to look out for them prior to closing the deal.
There is more to closing a commercial real estate deal than just signing a bunch of papers. Find out how you can safeguard your rights and interests while closing a commercial real estate transaction.