Commercial Closing is “Easier”
Buyers of commercial property are often surprised at how much simpler the closing process is compared to residential. Residential buyers have a stack of papers to sign at closing from their lender, a stack which the law requires to be disclosed at closing. As a result, more protection is required by the agent, thus more paperwork. There is not nearly as much disclosure in a commercial property. Generally, if you’re buying or selling commercial property, you’re already an experienced agent, and don’t need that protection.
Grab an Attorney
Commercial transactions usually involve more money than residential. For that reason, parties involved in a commercial transaction are, more often, represented by attorneys than in a residential transaction. Advise your buyer/seller to have legal representation.
Surveys and Audits Required
Surveys are obtained on a commercial property more than residential and are needed to disclose easements the buyer/seller might need to be aware of, where the property’s access is to a public road lies, and to assist the buyer in determining whether the property is fit for the intended business. In addition to this, there are also environmental audits and assessments that take time and are necessary for the businessman/woman to decide if the property is a good fit.
Complicated Loan Process
A commercial property can be, for a buyer in the loan process, more complicated than residential property. For example, the lender might also want an assignment of leases on the property, there may be UCC filings that the lender will want as part of the closing documents, or what the buyer has to give the lender at closing. It depends, so encourage parties to research ahead of time.
For agents, even the Realtor contract form for commercial is different than residential properties. While most Realtors are probably more familiar with the residential contract form used throughout most of Arkansas, we recommend learning the commercial contract form just as thoroughly.