Whether you are purchasing commercial property for the first time or you are familiar with these potentially complicated transactions, it is critical to do your homework. Commercial business contracts can be quite difficult to understand. One simple oversight or error may result in a bad transaction and huge financial downfall.
Although buying property is exciting, there are a lot of factors to consider before you make your initial bid. Due diligence includes comprehensive inspections, looking into financial details and running numbers to ensure you will not be left with unexpected expenses.
Checklist for inspection
Careful inspection of the property is critical before signing the final contract. This involves physically walking around the property and throughout the building, checking that everything is in working order. It is best to bring a professional inspector along with you to ensure all factors are considered and to receive an accurate appraisal of the property.
All legalities in place
It is important to make sure all legalities are in place before signing the final contract. Legal aspects to consider include the following:
- Potential environmental issues
- Errors on the survey and/or title
- Potential encroachments on the property
- Potential operational issues
- Title transfers and survey reports
Due diligence must be performed within 10 to 90 days of the initial intent to purchase. This time period changes depending on the specific circumstances surrounding the case.
While due diligence must be performed before the deadline, all factors must be covered to ensure you make the best deal possible. Having a team of professionals is imperative in this important business transaction.