Colorado attracts all types of entrepreneurs and large corporations due to it’s growing economy and population of younger Americans. However, it’s challenging to secure the perfect property when you are dealing with other competitors in the area.
Luckily, knowing the specifics of a commercial real estate transaction helps you find the perfect property for your needs while keeping your costs low.
Unique details in commercial real estate
Commercial transactions are like residential in the step-by-step process. However, commercial real estate has its unique complexities:
- More money involved – commercial sales typically involve much more funds than residential transactions, which makes the escrow process more complex and tightly-controlled for sellers and buyers.
- Less regulation – Also, there is less regulation for commercial real estate deals during escrow, so buyers need to act diligently to protect themselves and their investments.
- Deals with legal entities – For most residential properties, buyers and sellers are listed as individuals in the contract. But commercial real estate deals with legal entities instead – limiting liability and increasing tax advantages for the entity.
- Asks for signing authority – When buying a property, a corporation cannot sign the transaction. Instead, one person will have signing authority on behalf of the corporation and act as a representative throughout the deal. It involves more paperwork and authorization from the board of directors to execute the purchase.
- Concerns surrounding zoning – Since commercial properties are intended for a specific use, most buyers need reassurance that the property is properly zoned for their intended use before closing. You would want a full report on the zoning search and possibly letters from local officials from the area.
These details are crucial for buyers to know before purchasing a specific property. Without that knowledge, you may end up with the wrong property or location for your company.
One way to help balance the legal complexities of a commercial real estate transaction is to hire an experienced attorney. O’Brien Legal works diligently to listen to clients and act swiftly to accomplish their goals.