July 05, 2017
With commercial real estate needs on the rise, the commercial real estate business is booming. While it may seem like a complicated process to buy commercial real-estate, with someone knowledgeable to guide you, the process is much simpler and easier than you might imagine. NAI Isaac of Lexington, Kentucky can walk you through the process of buying commercial real estate to help you better understand the steps of the process.
Find Your Property
If it is your first time looking for a commercial property to buy, invest in a real estate professional. Real estate professionals who are experienced in commercial real estate will make your buying experience much easier. Because commercial and industrial real estate is on the rise, real estate professionals will be invaluable to your search because they will know the availability in specific areas and are well acquainted with the market. With commercial real estate, real estate professionals are even more necessary because there is a lot of data on these properties that is not easily available online.
After you have decided on a property to pursue, it is time for negotiations. Because the market is booming it is very likely that you will not be the only person interested in the commercial space, which will result in multiple offers being made. Sellers are looking to make as much money as they can on their properties but will also be looking for a buyer who is solid. To seem like a more experienced and solid buyer, submit pre-qualification letters and proof that you have no contingency on your finances.
Once your terms and offer are accepted, a Purchase and Sale Agreement (PSA) is used to record the agreement that was reached between you and the seller. Once a deposit is sent to a holding company and the PSA is signed by both parties, escrow is in effect and a 30 to 90-day contingency period begins. In this time, commonly known as contingent escrow, you should thoroughly inspect the building you are purchasing, secure your finances for the purchase, check titles, and check that the building is up to code in all areas. Because your deposit is refundable in this escrow period, it is necessary to make sure the building meets all of your standards during this time because after this point you could lose money. If you find an issue with your property in this time period contact your seller and your seller’s broker to resolve the issue.
After you have inspected the property and resolved any issues with the seller, and your finances have been approved you can waive the contingency of your escrow. After the contingency has been waived, you enter into perfect escrow and your deposit cannot be refunded. You can still back out of the sale but the money you put down for your deposit will not be returned. Perfect escrow is a period between 14 and 30 days, where the bank prepares all of your documents, like loans, grant deeds, and lease assignments, to await signature. During this time, you should also invest in a new insurance policy for your property.
Lastly, an estimated closing statement will be signed. This begins the process of money transfer from buyer to seller. After the grant deed is recorded the property is officially yours.
While the process may seem simple, it can be tricky to navigate on your own, especially for a first-time buyer. At NAI Isaac, serving Lexington and the surrounding area, we can guide you through the process of buying commercial real estate and help you get the most for your money. We have a long history of customer satisfaction, and a wide range of real estate experience. Specializing in leasing and subleasing, investment sales, site selection, property management, and numerous other areas of expertise, the team mat NAI Isaac can assure your satisfaction. Contact our team of professionals today for more information about buying commercial real estate.