Lots of planning and preparations predate the decision to purchase a commercial real estate property. As a future property owner, you must consider all possibilities as the choices you make before purchasing, and soon after, will have the most impact on your ownership moving forward.
The first thing to keep in mind is whether you’re purchasing a building to run your own business, lease, rent or to flip it and sell it back. After you've made this decision, you and your lawyer will know which contracts to consider.
Steps in purchasing a building
Investors and new business owners will benefit from taking precautionary steps while assessing whether to buy a building or look for another. Some of these steps include:
There are different types of surveying, but the American Land Title Association (ALTA) might be the best fit for individuals interested in purchasing commercial real estate. The reason for this is because ALTA allows for licensed surveyors to check property outlines and to make sure there are no boundary disputes or other possible liabilities that could've been omitted from public records.
After the land surveying is complete, the next task is to check out the maintenance of the building. At this point, potential buyers must evaluate the pricing offered for the building with the possible maintenance issues. If a building is old and renovation is needed, it's smart to tie that cost into the overall price and compare it with other premises you have in mind.
Analyzing past building records that list ownerships and detailed maintenance work receipts could assist in making an overall decision. Potential buyers might have to request these records, as most of them might not be public information. Working with your lawyer to access this information will help you to predict how much you will have to spend in future maintenance work. These records will also show past ownerships, disputes, and many more, all of which will give buyers a holistic view of where they stand.
After having an idea of the building you're trying to purchase and the necessary work you'll have to put in, you will need to consider which type of insurance best benefits your interest. The first factor to consider is whether you'll be purchasing the property alone or with a partner. Next, depending on your personalized situation, you'll either want to buy commercial property insurance or commercial liability insurance.
Lastly, after finalizing all your decisions, it's time to create and sign your purchasing agreement. If you were planning on leasing a property rather than buying it, you would need to review the contracts provided by the owner and have your attorney work with you to finalize each document correctly.
When purchasing a property, there are lots of things buyers must do and prepare to avoid future lawsuits. O'Brien Legal helps buyers perform due diligence before closing to prevent situations like this.