When you purchase commercial real estate, it is a major investment. Not only are you forking over a large sum of cash, the future of your business enterprise also hangs in the balance. That means that is very important to get it right the first time.
You know better than to take a seller at their word — no matter how amiable and honest they may seem, but there are some other common mistakes that can adversely affect your commercial real estate closing.
The property is out of compliance with codes or statutes
Running afoul of local or state codes or laws or the federal Americans with Disabilities Act (ADA) can get you into some legal hot water. Before agreeing to purchase the property, make sure the property is compliant with all the laws, codes and statutes that matter so you can avoid costly renovations (or litigation).
Failing to exercise due diligence
Is your property zoned for the right commercial usage? Is the title clear (and protected by title insurance)? Are there any potential restrictions on your use of the property? All this must be determined before you agree to buy the property.
Researching your competition
Are there non-compete clauses involved that could affect your business? Can the market absorb another dental clinic, dog grooming business or nail salon? Is the area already saturated? A location is only great when it will support your business.
Don’t wander blindly through the wilderness of commercial real estate
The larger your investment, the more vital it is to take the time to do it right, cross all the T’s and dot the I’s. Choosing the right time to help you get it right can mean the difference between success and failure.