Whether you are looking for the first physical location for your business, or you are making a change to your current location, if you are contemplating the purchase of commercial property to locate your business, it is essential to go into the purchase prepared.
Commercial real estate transactions can have intricate details that are easy to overlook. Parts of the deal that do not seem important during negotiation could be an unpleasant reality a few weeks after your purchase.
Here are some of the essential things to know about buying a new property for your business.
What comes first, the sale or the purchase?
If you are looking to change your location (rather than adding another site), you need to consider the timing of your purchase. If you do not have the capital available to buy a new property without selling your current one, timing will be an important factor.
As soon as you start thinking about buying a new commercial property, start paying attention to the commercial real estate market in your area and consider these questions:
- How quickly are commercial properties selling?
- How does the final sale price compare to the initial asking price?
- What properties in your area are similar to yours?
You may be able to work out a contingency agreement so that your purchase is contingent on being able to sell your property. You can have a better idea of how long it will take to sell your existing property when you know more about the real estate climate in your area.
As closing time approaches
Getting close to closing on your new commercial property is an exciting and nerve-wracking time. While you are excited to move in and start a new chapter, you need to watch for what can go wrong right before closing, such as:
- Problems with the title.
- New or unresolved issues during the inspection (i.e.-the condition of the property and any warranties regarding the same).
- Financing complications.
While you may be dependent on another party to resolve issues that get in the way of closing, understanding the complications and how to fix them can put your mind at ease. It can also help you know whom to talk to in order to get to an efficient resolution.