You are ready to buy a commercial property!
Where do you begin?
How do you know if you are seeing all of the available commercial inventory?
What area of Las Vegas will best serve your commercial needs?
LasVegasRealEstate.com asked Jack Woodcock with The Woodcock Real Estate Group, one of Berkshire Hathaway HomeServices – NV Properties largest and most successful commercial teams to provide us with some insight into their commercial buying success. Jack outlined the following thoughts for LasVegasRealEstate.com readers:
The first step to buying a commercial property is to clearly define your search says, Jack Woodcock. We advise our clients to really think about their specific needs to include the amount of space required, budget factors, desired location(s), parking requirements and the type of setting that will work best for their business.
Buying commercial real estate is a complex matter with many factors to consider since no two properties or transactions are alike, says Jack Woodcock. Moreover, with all the unique opportunities and potential pitfalls of the current market, it’s more important than ever to contact an experienced Commercial Realtor once you’ve decided to buy.
When choosing a Commercial Realtor to guide you through the property search, financing, negotiation, and transaction processes, you should consider their service record, integrity, market knowledge, and expertise.
This is where it gets a bit difficult for a commercial buyer going it alone and without a Commercial Realtor. There simply aren’t many free commercial search sites that show a complete inventory of available commercial properties, says Jack Woodcock. At any given moment, the free commercial search engines are displaying to the public only about half of the active inventory in any market, including Las Vegas.
An experienced Commercial Realtor, using premium commercial search sites not available to the general public, can often times find additional suitable opportunities that meet the pricing and space requirements for a client.
The next step, says Jack Woodcock, is to run up to date demographic and traffic pattern reports, and research city planning initiatives and approvals. No surprises, that’s our motto, says Jack Woodcock.
The key to the commercial search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”, says Jack Woodcock.
However, it’s also important to view commercial properties in person. While the property details may seem similar online, commercial properties can be very different in terms of layout, design, workmanship and other aspects.
Once you’ve identified the target commercial property do more research. Who owns it? When did they buy it and for how much? Is the property in an “Opportunity Zone” where 1031 exchange opportunities are available? Are traffic and demographic patterns improving or declining? Start your due diligence before you go into contract. Again, no surprises, that’s our motto, says Jack Woodcock.
Once you’ve found the commercial property you’d like to buy, it’s time to make an offer. Various commercial contracts are available or one can be drafted by a qualified real estate lawyer. These contracts enable you to specify a purchase price and also allow the inclusion of clauses specifying various terms of purchase, such as the closing and possession dates, your deposit amount, and other conditions.
You should carefully review these clauses to be sure that they accurately express your intended offer says, Jack Woodcock.
Once you’ve written the offer, you will present it to the seller and/or the seller’s representative. At that point, the process will vary somewhat depending on the market you’re in. Generally speaking, the seller can accept your offer, reject it, or counter it to initiate the negotiation process.
Successive counter-offers, with deadlines for responding and meeting conditions, may be exchanged between you and the seller until a mutual pending agreement is reached or the negotiations break down.
Once you have a pending agreement, it’s time to return to your chosen lender to finalize mortgage details in order to close the deal. This means finalizing your down payment, interest rate, regular payment schedule and all other financial conditions associated with the closing.
As the saying goes, ‘let the buyer beware’ says Jack Woodcock. Unfortunately, too many buyers suffer negative consequences from not fully understanding their financing decisions. Thus, it’s crucial for you to work with people you trust. In this regard, a good commercial real estate professional can become a true friend for life.
If you’ve efficiently taken care of everything connected with purchasing your new commercial property, taking ownership should be one of your proudest life moments and there should be no surprises says, Jack Woodcock. Key steps to the closing also referred to as the “escrow” or “settlement”, include:
Getting a title search – you will need a historical review of all legal documents relating to ownership of the property – to ensure that there are no claims against the title of the property says, Jack Woodcock. It’s also necessary to purchase Title Insurance for protection in the event of errors in the records or mistakes in the review process.
The final walkthrough – you will be given the chance to look at the commercial property one last time to make sure it’s in the same condition as when you signed the sale agreement.
The settlement – typically, on the Closing Date you’ll meet with an escrow agent to verify and sign all the paperwork required to complete the transaction. The settlement will include paying your closing costs, property adjustments, and prorated expenses. At that point, you’ll receive the property title and copies of all documentation pertaining to the purchase.
Oh, and one more thing – you’ll get the keys to your commercial property!