Trying to figure out how to buy commercial property can be a tricky process, to say the least. The paperwork alone can be a drawn-out experience if you don’t know what you’re doing. Even if you do know what you’re doing, there is still a rigorous process to go through that takes a certain amount of time and effort. By the time you get done, you will have wondered why no one has written the book “How to Buy Commercial Property” yet.
The good new is: it’s not a hard process, but it can be tricky. We’ve put together these few tips for navigating the waters of how to buy commercial property.
1. Do Your Homework. The first rule of any purchase more involved than lunch is to do your homework to make sure you know everything there is to know about your purchase. Check records for taxes, past construction, property values, and anything else you can find. If information about that land exists, you should know it. This may seem obvious, but when you’re swept up in the excitement of buying, small details might slip your mind.
2. Ask Questions. If information is not readily available, try to find it. Your real estate agent is your first stop. Then, be sure to turn to local economic development department and the internet. In the age of digital information, it’s worth the few clicks to do some research if you have any questions. Throughout the buying process, ask questions as they come up. Write them down. Whatever you do, get them answered.
3. Know What’s in the Box. When you buy property, know exactly what it is that you’re buying. If there’s water on the property, for example, you should know if you have rights to that water. If there’s an existing structure, you should know if you’re getting the building as is, with everything in it. Fixtures, appliances, and any furniture in the building can be a blessing or a curse. Industrial appliances can be costly to repair or even to remove.
4. There’s No Receipt. When the transaction is complete, you’re the new owner of that property. Signing the paperwork for that property is acknowledging that you’re aware of all its quirks and particularities. In other words, know what’s wrong with it before you buy it to avoid surprises down the road. Keep in mind that fixer-uppers often allow you room to negotiate price, but know that you can’t return it once you buy it.
5. Plan Ahead. When you purchase any land or a building, it’s going to work out better if you know what you want to do with it. Prepare for codes and regulations. Take your plans to the appropriate local government office and loop them in so they can let you know if you face any serious red tape. This one also falls under avoiding unpleasant surprises.
6. Bring Your Lawyer Friend. The legal part of buying commercial real estate can be a little tough to understand. If you’re not completely certain you understand all the ins and outs of the contract, it’s a good idea to have a lawyer with you or at least look over the paperwork. The residential buying process is not quite the same as how to buy commercial property and there are different laws governing both. It never hurts to have a second set of eyes and you want to know what it is you’re signing.
Knowing how to buy commercial property is the job of the real estate agent. As a buyer, your job is to know what you want and make sure you get it. Researching accurate property values will give you leverage in negotiations. Along the way just remember to pay attention to make sure that no details are missed and you don’t let the fine print get the best of you.