Commercial real estate can be pretty complex whether you’re taking the next step in your business or investing in a new property to create passive income. However, with the right advice, there are many roadblocks and unnecessary headaches that can be avoided. One of the most significant aspects of investing in commercial real estate is having a good quality contract.
Often this process creates a lot of questions that leave buyers and owners looking to find answers. We’ve created a shortlist of 3 common questions and answers about commercial real estate contracts that will help you better navigate the road ahead; read on to learn more!
1. What Are the Different Types of Real Estate Contracts?
Did you know that there are different types of real estate contracts? If you are going to be investing your hard-earned money into the new property, this is one part of the process you should be well versed in. These contracts help to protect your investments, minimize liability and protect your best interest throughout the transaction.
A purchase agreement, also known as a sales contract, is one of the most common contracts used in commercial real estate. This contract includes a lot of different aspects that are typically found in a contract that lays out the details of the agreement between buyer and seller.
Real Estate Assignment Contract
Real estate assignment contracts are very similar to purchase agreements. However, they tend to have added verbiage to provide more flexibility to the final property owner. The assigned aspect of this contract allows the property owner to pass along the property to another person if they wish.
Lease agreements might have to be one of the better-known contracts used. These contracts are used when a landlord agrees to offer a tenant their property at a fixed monthly rate. These contracts outline monthly payments, security deposits, and much more.
Power of Attorney
Power of attorney documents is not exclusively used for commercial real estate properties. These documents allow another person to sign a real estate contract on your behalf, and they can be beneficial when dealing with unique situations, for example:
- Being the owner of many investment properties
- Not being physically present at the time of signing
- Mentally disabled
- Elderly and may not be able to sign themselves
2. What Must be Included in a Real Estate Contract?
For many people looking into questions and answers about real estate contracts this is often at the top of their list. Any commercial real estate agreement should include most of the terms and conditions for the sale. All of the information presented within this lengthy document should be valid and correct before each party signs the final agreement. Here are a few things that should always be included, such as:
- Names and mailing addresses for buyer and seller
- The legal description of the property
- Purchase price of the property
- A detailed description of how the buyer will pay for the property
- Amount of earnest money due at closing
- Type of deed that will be used to transfer the property
- Additional conditions
- The state law that will govern the agreement
- Expiration date
- Signatures of all parties
3. Do I Need a Lawyer When Buying Commercial Real Estate?
Buying and selling commercial real estate can be a complex and lengthy process. From negotiating purchase price to protecting the interests of both the buyer and seller, having a knowledgeable lawyer on your side is the best investment, you could make. Here is a breakdown of some of the few advantages you may have when hiring a real estate attorney.
Many people who purchase commercial real estate often are business owners who have a lot of essential daily activities to focus on. Although making this process a top priority can be tricky, it is crucial to ensure that everything goes smoothly. Hiring an attorney allows you to focus on your business while allowing them to handle the legalities of buying or selling the commercial property at hand.
Protect Your Interests
Investing in a commercial property poses a lot of potential room for unexpected risks. Real estate lawyers know how to minimize these risks and protect your interests throughout the process.
Ensure a Valid Deal
If a deal is too good to be true, there may be some hidden issues behind the transaction that might end up costing you in the long run. Examples of this would be tax debt or liens in which you would be left dealing with after the purchase. The right lawyer can research the property to ensure you avoid these problems to make the right decision.
Other Laws and Regulations
There are many laws and regulations that go into commercial real estate. For the average person who may not be versed in these laws, it can create more complications and trouble addressing issues that may arise.
For Port Orange individuals and businesses entering into real estate transactions, facing land use and zoning issues, or dealing with other real estate issues, there is nothing more important than working with an experienced, trusted team of lawyers. At Cobb Cole, our real estate lawyers are ready to help you navigate through all aspects of commercial real estate. Contact us today to schedule a consultation.