When it’s time to on a commercial real estate transaction the process can seem overwhelming.
This definitive guide series will walk you through every step in the commercial real estate closing process. You will see where the commercial process is similar to the residential process, and where things are different. You will also discover the places you need to be cautious and where your due diligence efforts are most important. Commercial real estate has fewer protections for buyers, but also gives parties more room to be creative with deal making.
There are four major steps to closing a commercial real estate deal. Some of these steps are ongoing and others overlap. Every transaction will go through escrow, signing authority verification, due diligence, and signing and processing title and closing documents.
Part 1: Escrow
Just like when you purchase a home, escrow is an important part of the commercial real estate closing process. In escrow a neutral third party will hold funds in an account until either all of the requirements of the escrow agreement have been met, or until one party pulls out of the deal in accordance with the terms of the escrow agreement. Escrow is designed to solve the problem of trust between two parties. Nobody gets paid or receives title to the property until both parties have had their agreed upon conditions met.
Full article recommended by Joseph Kennedy Owner/President at Crystal Investment Property, LLC