Commercial Transactions
  1. Marketing / Looking for Property
  2. Identify Your Money Source
  3. Purchase Contract
  4. Investigate The Property
  5. The Closing

Buying or Selling Commercial / Industrial / Business Properties

  1. Marketing / Looking for Property [top]
    1. Real Estate Agent - In most commercial transactions both the buyer and seller have a real estate agent working for them. This is a highly specialized transaction that can have many pitfalls. It is important in all transactions to employ competent professional help; and, this is particularly true in commercial transactions, because of the complexities of these deals. Remember to clearly identify the agent’s duties, responsibilities, and commission percentage in writing in the agent’s listing agreement. You should also make sure that the same commission percentage is identified in the purchase contract.
    2. On Your Own - It is generally considered a bad idea to try to market and/or purchase commercial property without a realtor. However, if you do not employ the expertise of a realtor, then you are in even greater need of a real estate attorney to handle the transaction from start to finish. Remember that the earlier you bring an attorney into the deal, the greater the benefit to you, the client.
    3. Seller Disclosure - Full disclosure by the seller is critical in commercial transactions because in most cases the buyer is or will become fully informed about the property through due diligence. Lack of disclosure up front, is simply asking for trouble later on in the transaction.
  2. Identify Your Money Source [top]
    1. Typically in a commercial transaction the parties will have their money source in place before a real estate contract is executed. A commercial transaction is usually an expensive proposition and the buyer may want to be pre-approved by the lender ahead of time to ensure that once a “good deal” is identified, it will close. This will ease the seller’s mind, too, in that a qualified buyer is a serious buyer.
    2. There are many sources of money available in today’s market for commercial transactions. Banks, private money, mortgage brokers, government loans / programs and financing can become complicated and very time consuming. An attorney may be able to point you in the right direction to investigate all of your options.
    3. You should shop for the best rates and the best available program for you. Visiting various banks and mortgage brokers will help you identify your best options. Your attorney may be able to help you with finding the best lender also. Because your attorney deals with these issues frequently, he may keep up on mortgage rates and the best, or at least most common, programs offered by lenders to his other clients.
  3. Purchase Contract [top]
  4. It is very important to have all of the important issues clearly identified in a purchase contract for this type of transaction. In commercial transactions there are often numerous contingencies that must occur before a transaction is completed. All of these issues should be fully considered with your real estate attorney in advance of signing any contract (or making an offer) and must be plainly stated in the contract to be enforceable should the need arise. A typical purchase contract should contain the following:

    1. Names of all parties and their titles, if relevant;
    2. Legal description of property to be purchased;
    3. Purchase price and deposit/s amount/s;
    4. Closing date;
    5. Who is responsible for paying various closing/title/transaction charges;
    6. Real estate agent(s)’ commission;
    7. Financing;
    8. Social Security numbers and/or federal id numbers;
    9. Any other particulars of transaction, including the time allowance for completion of due diligence.
  5. Investigate The Property [top]
  6. Due diligence is a very important part of any commercial transaction. This investigatory period in conjunction with the contract can make or break a commercial deal. All of your experts have to be in place and know their role in the process. Your real estate attorney will guide you through how and when these events should occur and make sure that you are protected throughout the process.

  7. The Closing [top]
    1. What should you bring?
      1. Buyers should bring a cashier’s check for the full amount you are bring to the closing as identified in the closing statement. Make sure of the amount ahead of time.
      2. All parties should bring picture identification, such as a driver’s license.
      3. All parties to the transaction must be at the closing, unless arrangements for a mail-away are made.
    2. What occurs at the closing?
      1. The property transfers from the seller to the buyer for the amount of money identified as the purchase price.
      2. All requirements identified in the Commitment of Title Insurance issued for the benefit of the Buyer and Lender, have been satisfied.
      3. The closing agent prepares a closing statement, before the closing for review and approval by all parties to the transaction. If approved, the settlement statement is finalized and signed by all parties at the closing. The closing statement identifies how all of the money is disbursed.
      4. A property deed is prepared, signed, and sent to be recorded in the Public Records to accomplish the property title transfer.
      5. The financing documents (mortgage, note, riders, truth-in-lending, etc.) are signed and the mortgage is sent to be recorded.
      6. The closing agent (attorney) receives, verifies, and disburses all the funds of the transaction. All of the costs of the transaction are paid. The real estate agent’s fees are paid.
      7. Previous mortgages, equity lines, and other liens are paid-off.
      8. The keys are handed over to the new owners.
      9. A copy of all of the necessary documents are provided to the buyer, seller, and lender by the closing agent.
    3. What happens after closing?
      1. Title Insurance - a final title insurance policy will be issued for the property (one for the buyer and one for the lender) once the deed has been recorded and a search is done for the gap or time between the closing and the date the deed is recorded. The final title policy will be sent to the party obtaining the insurance by the closing agent. It is important to keep this title insurance policy in a secure location along with your other title documents.
      2. The original recorded deed is returned to buyer and the original recorded mortgage is returned to the lender.
      3. A satisfaction of any previous mortgage/s or lien/s is recorded and sent to the seller.

This information is not intended as a conclusive explanation of the Law of Real Estate Transactions in Florida. It is to be considered only a summary for clients or prospective clients of this law firm. If you have any questions concerning a specific real estate transaction, you should consult an attorney experienced in the practice of real estate law.

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