What Can I Expect During the Commercial Buying and Selling Process?

The basic steps in the commercial property buying and selling process can be summed up as follows: preparation; marketing, identification, and origination; underwriting; due diligence; and closing. No matter what side of the bargaining table you happen to be on, if you’re going to be successful in the commercial real estate business, you’ll need to become familiar with each stage. So, let’s discuss each one in a bit more depth.

Preparation

Whether buying or selling, you’ll need to prepare for the process. On the buying side, this will entail getting approved for a loan and determining what you need and want in a commercial property. If you’re selling your commercial property, you’ll want to prepare by getting an appraisal, taking care of repairs and cosmetic upgrades, setting a price, and finding a real estate team to market the property.

Marketing, Identification, and Origination

This next stage begins with the seller and their real estate team. They will use a commercial property MLS, newspaper and other advertisements, and their networks to put the property in front of potential buyers.

Buyers come into the process at the identification stage, which involves just what one would infer from the word: researching and finding commercial properties for sale that one is interested in buying. If you’re planning to buy, you’ll want to be sure you are looking at all the properties for sale that meet your criteria. There are plenty of criteria to search by, such as Class A buildings only. A real estate agent can help you learn more about the different criteria and find the best property for your needs.

Underwriting

Underwriting brings the buyer and the seller together. This stage involves taking a specific commercial property’s past and current statistical data and using it to project future performance. The buyer and seller will then negotiate the purchase price and terms. If those negotiations are fruitful, a purchase agreement will be drawn up, and the buyer will usually put down a deposit with the title and escrow company as a good faith token.

Due Diligence

At this stage, the property will be inspected to ensure it’s being sold as advertised and that there aren’t any hidden or underlying issues with it. The buyer should find a reputable appraiser and engineer to assess the property’s condition and address any maintenance concerns with the seller. This stage usually takes between 30 and 60 days, but this can vary. While the buyer typically has the option of backing out of a sale at this point, they will most likely lose the deposit if they do.

Closing

Finally comes the closing stage. While closing usually doesn’t take much time, it does require a laser-sharp focus on the details. The buyer and seller will sign the closing agreement, and funds are transferred from the buyer to the seller. Meanwhile, the seller will ensure that all keys and access codes are given to the buyer.

Need Help? Give Us a Call!

Recckio Real Estate & Development, Inc. has been helping people throughout Western New York with commercial property transactions for almost 35 years. Our team is experienced in buying and selling all types of commercial properties, including retail spaces, medical offices, and industrial facilities. Commercial property transactions are complex and multifaceted, but we’re here to help you get through the process and protect your interests during the sale.