You found the right commercial property in the Triangle from which to operate your business. Negotiations have taken place and you’re looking forward to moving in and getting your operations underway. There may be some obstacles to overcome, though. The following are the leading factors that often delay commercial closings.
Appraisal Concerns
Funding to buy commercial properties may come from various sources independent of or in addition to lenders. In doing their own due diligence, each party slated to contribute to the purchase of the real estate may perform their own appraisals. If the numbers don’t add up, parties to the deal may end up back at the negotiation table trying to broker a new deal, which may delay the commercial real estate deal going through.
Funds Verifications
When you search for the difference between commercial and residential closings, one obvious difference is the amount of money exchanged. Commercial real estate transactions in North Carolina often involve much more money being exchanged hands than residential deals do. While the commercial real estate sector is subject to far less government oversight compared to the residential one, this means that parties involved in the former have to perform their own due diligence, which extends to ensuring their buyer has the necessary means to make a purchase.
Requests for additional financial documents if a buyer is self-funded may occur. Additionally, if a buyer is relying on a lender to help fund their purchase of NC commercial real estate, it’s not uncommon for them to ask for more financial documents than would typically be necessary when buying a home to ensure they cover their own bases.
Inspection Issues
Much like what happens in the residential real estate industry, it’s not unheard of for commercial closings to get pushed back because repairs are needed. These may be discovered when a buyer is having an inspection performed on the property or during a final walkthrough, and provided the purchase contract requires the seller to address these issues before the transition of ownership, it may be necessary for them to be tackled before the closing can occur. Delays in obtaining a survey or in addressing lender requirements may occur.
Titling Issues
When it comes to the residential real estate industry, land rights issues, such as easements, or encumbrances, like liens placed against a home for non-payment of taxes, can be issues that delay closings or cause buyers to pull out of agreements. These can also be issues that impact whether a commercial buyer ultimately moves forward in purchasing a property.
Zoning Concerns
Zoning issues can also be a concern, as if a company plans to operate a manufacturing plant, for example, from a non-industrial zone, they may be unable to do so. While such an obstacle should be identified before a party ever signs a commercial purchase agreement during the due diligence process, this sometimes doesn’t occur, leading to a delayed closing while they await to explore their options or ultimately having to pull out of a closing down the road.
Getting Help in Navigating the NC Commercial Real Estate Process
Whether you’re currently planning to acquire the first piece of real estate for your business in Raleigh or you’re seasoned at commercial property acquisitions, having a law firm like Anderson Jones, PLLC advocating for your best interests is best. Our firm’s attorneys have extensive experience in handling real estate closings and, if necessary, commercial litigation. So, we can certainly provide you with assistance with commercial real estate acquisition from start to finish — no matter what obstacles may arise. Contact us now for prompt assistance.