Many investors are turning to real estate in today’s economy in hopes that they will see a better return in the long run. Unfortunately, when it comes to commercial real estate transactions, things don’t always go as smoothly as everyone hopes. Here are some of the most common problems that investors encounter.
Building Inspection Mishaps
Buyers have inspections done on a prospective property with the hopes that any problems will be discovered before the property has changed hands. Based on the findings of the building inspector, the buyer determines whether they will be able to afford the upkeep and repairs needed in the upcoming years. Unfortunately, building inspectors are prone to human error and sometimes things get missed. As a result, what might have at first seemed like a sound building could have errors that the new owner may not be able to afford.
Sometimes, it will seem like everything is in order, only to have the bank handling the loan process suddenly make a change slow the process, or even bring it to a grinding halt. The change can sometimes extend the closing date by several months, creating problems for the buyer who isn’t able to move forward with their business plans.
There are times when the appraisal for the commercial building ends up being lower than the contract price. The good news is that this generally isn’t a difficult matter to resolve. The best ways to correct the issues include:
- Reducing the contract price
- Increasing the down payment
Just because you’ve closed on your new commercial property, it doesn’t mean you’re ready to get things up and running. You still have to get the city to approve your permits and that often takes time. The trick to making sure you can open for business as soon as you close on the property, is getting the paperwork in order while you wait for the change of property ownership to be completed.
Before you have closed on your new commercial property you need to perform due diligence on the property. Sometimes this due diligence results in an unexpected problem. At this point you have to decide if you want to cancel the transaction or explore other options.
In a study conducted by the Commercial Buildings Energy Consumption Survey in 2012, it was discovered there are approximately 5.6 million commercial properties in the United States, which is a 14% increase in commercial properties since 2003. At any given time, several of these properties are for sale.
If you’re interested in purchasing a commercial property, you will benefit from the services of New York real estate lawyers. Not only will the New York real estate lawyers help you negotiate with the lenders, owners, and property brokers, they will also help ensure that any permits you need in order to conduct business have been properly filed.
The most important thing the New York real estate lawyers do when assisting clients with the purchase and sale of commercial real estate is making sure that there aren’t any unnecessary delays with contractors, lenders, and tenants, so you can move into the new property right away.
The best time to contact us for assistance with the purchase of commercial real estate is before you have submitted your offer.