Dealing in commercial real estate can be a lucrative endeavor, but a chunk of your profits could be lost if you do not have the right clauses in your purchase agreement. The following is a brief overview of certain clauses you will want to have in your purchase agreement.
Contingencies are conditions placed on a purchase agreement saying that the buyer can walk out of the deal if certain conditions are not met.
Most commercial real estate purchasers are not prepared to buy the entire property with cash. They generally need to take out a loan to do so. You can make a purchase offer contingent on your obtaining financing at a certain interest rate. You can also include a seller assist clause if you want the seller to take on some of the closing costs.
It may be tempting in today’s hot real estate market to skip a property inspection. However, property inspections can uncover significant structural problems. If you have an inspection contingency, you can walk away from a purchase if the inspection uncovered a major flaw in the property.
Purchase real estate prudently
It is important to be prudent when purchasing commercial real estate. It can be exciting to get wrapped in the dream of what your desired property could become, but you must be realistic in a purchase agreement. By including financing and inspection contingencies you can ensure you will not be on the losing side of the deal in a commercial property sale.