Within the overall process of buying or selling Commercial Real Estate, you won’t find aspects more critical — or more critically connected — than Inspecting, Negotiating and Closing. You could say they are the Three Musketeers of a successful transaction.
Both Buyer and Seller have responsibilities that are mutually essential for the benefit of either. At the onset of any prospective deal, it is understood that Closing will occur only after both parties are “satisfied.” That means that certain events have successfully happened: The Seller disclosed, the Buyer is either comfortable or may have asked permission to order Inspections, productive Negotiations happened and, when agreement was achieved, the parties proceeded to Closing. Simple as that!
Well, maybe not simple, but it’s the general path for the three relevant parties (Commercial Realtor, Seller, Buyer) when it has been established that a listed Commercial property is in play. If a prospective transaction reaches the stage of Inspections and Negotiation, it can fairly be assumed that the Buyer has found a property that seems to meet most of their needs, and is sufficiently interested in the property to move forward.
On the Seller’s side of the matter, full and accurate Disclosure serves the transaction best; however, it’s reasonable to accept the fact that a prospective Buyer may want Inspections, and is willing to pay for such reports. Contracts vary, and it’s also possible that Buyer and Seller would share the cost of agreed-upon Inspection reports. Who pays is Negotiable.
Purely from the standpoint of ethical standards, a Seller should disclose everything they know about the property, including existing problems. Avoiding disclosure of known or potentially troublesome condition(s) might successfully get through Closing without detection; however, such withholding could result in retroactive legal problems even long after the sale. Your Commercial realtor should assist in making sure, to the best of their ability, that a Seller’s Disclosures are accurate and inclusive.
Inspection reports are ordinarily done by experts in the relevant field such as Septic and Well, Termite, etc. Licensed General Contractors can do Inspections for all aspects of the structure including electric, plumbing, termite, dry rot, etc. When trouble spots are discovered, full reports may also include estimates for remedies.
When certain conditions exist that get in the way of a clean and efficient Closing, the Seller and prospective Buyer may choose to Negotiate the costs of the fixes. Your Commercial real estate agent is experienced in helping with any aspects of a buy or sell where Negotiation will serve the deal and move it along to Closing.
Unfortunately, if a sale is approaching Closing, and it is discovered that a serious condition was not disclosed, of course Negotiation could settle the matter. However, it could be a deal breaker, just on general principles!
Buying or Selling, the “best case” scenario consists of two reasonable parties willing to disclose even the most serious of circumstances, and negotiate. Remember: Your experienced Commercial real estate agent knows the property in question, has the relevant answers and can facilitate negotiations toward the needed solutions.
Not only does the specific success of each of these aspects depend on the integrity of the other two, it would be difficult to imagine a successful sale or buy without each executing its role thoroughly and authentically.
Jim Magliulo is a Lake County commercial real estate agent and can be contacted at 707-263-5729 or jim@countryair.com. You can also view his website at www.countryaircommercial.com
