Closing on a Commercial Real Estate Property

While most people have some experience with residential real estate transactions, commercial real estate presents several different challenges. They have their similarities, but buyers receive fewer protections on the commercial side, and a commercial real estate lawyer Austin TX may be necessary to help with the due diligence associated with many of the steps. Here are three of the biggest stages of the closing process.

Closing on a Commercial Real Estate Property

Escrow

Just as it is in residential real estate, escrow is an important component of the commercial real estate closing process. In escrow, a third-party acts neutrally to hold funds until the buyer and the seller’s terms have been satisfied.

Where escrow differs in commercial transactions, is that the agreements must be more formal, and the escrow agent is usually the title agent. A commercial real estate lawyer Austin TX will tell you that the title/escrow agent does not have to evaluate the agreements, they only need to be told by both parties that they are satisfied.

No RESPA

RESPA (The Real Estate Settlement Procedures Act) shields buyers of residential properties. It does not apply to commercial transactions. This means that buyers must have the area surveyed by proper professionals and contracts evaluated by a commercial real estate lawyer Austin TX. Sellers must disclose issues and respond to objections.

Documentation for Title and Closing

Finally, commercial real estate deals involve many documents, such as assignments of liability, zoning agreements, assumption of leases, environmental reports, and deeds. A title must be drafted early in the process that account for liens and issues involving water or mineral rights. Both parties must file their responses to concerns in this area.

While commercial real estate closing transactions are complicated, professionals can evaluate the documents and help you navigate the potential legal pitfalls. Due diligence must be performed, but if you rely on experienced specialists, you will make it through successfully.

Closing on a Commercial Real Estate Property
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