How is a commercial real estate deal done and what is the process?
Online, May 8, 2014 (Newswire.com) - Commercial real estate is quickly becoming the apple of the eye for budding and existing investors. The profitability of the properties and greater value than residential spaces is bringing in a lot of attention to this part of the real estate world. For anyone interested in making an investment, doing it right is important to make it profitable.
As each step of the purchase process is important, following are few things to look for when making a purchase and the mortgage professionals at CRE-Finance LLC wants to expand on them for you:
1. Following the Basic Steps
How is a commercial real estate deal done? The process involves few basic steps that are followed in a sequence. A buyer hunts for properties and make an offer for any property he/she finds feasible. If the seller accepts the offer, it is executed. The buyer then opens an escrow with an attorney or an escrow company to deposit the earnest money. Loans papers are submitted by the buyer to his lender, such as CRE-Finance LLC, to begin the loan process. An inspection of the property is conducted. A contract is drawn up, the title is reviewed, contingencies are worked upon and with the consent of both parties, and the contract is signed. The lender gives the buyer a loan commitment and a closing statement is prepared for the deal. When documents are signed by the buyer and the seller, the buyer makes the payment of his funds and the deed gets recorded. The buyer can then take possession of the property.
2. Undergoing the Escrow Process
To transfer the property in a smooth and effective manner an escrow is essential for serving the interests of both sides in an impartial manner. Hiring an escrow officer from an escrow company is essential and the officer performs a number of duties including obtaining the title insurance, title search, title report examination, liens clearance, preparation and issuance of closing statements, handling loan documents, disbursement of finances and recording the deed.
3. Doing a Final Analysis
Before finalizing the deal, Todd Tretsky of CRE-Finance LLC suggests that you make sure you do a final analysis to be confident about doing it right. Think back on your reasons for acquiring the property, does it serve the purpose? Check out the number estimates, is the deal profitable? Consult your tax advisor to see if you are meeting your tax goals. Review your exit strategies and the exit timeline you have planned on to see if it still works out and that the profit is attainable. Also, see if your loan terms are worked out with your lender. Adequate thought and research would save you from regretting later on.
4. Review the Closing Statement
Don't take anything for granted. Review the closing statement about 48 hours before signing. Look for errors and make necessary amendments in due time. Few things to look out for include the loan document having the correct figures, repairs should be completed by the seller, are there any credits that should be given to you? Are the names and dates correctly mentioned? If there are any defects in the title, they should be cleared and everything inserted is as agreed.
5. Closing it Officially
After scrutinizing through each aspect thoroughly, you can close the deal officially. With the escrow officer doing his/her job right, the payment is paid, the deed is recorded and you can finally take possession of the property.
If you have any questions regarding commercial real estate or are seeking financing, then contact Richard Tretsky or Todd Tretsky at 855-515-5585 or visit us at www.cre-finance.com