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Once you decide to buy commercial real estate, it’s important to assemble a solid team who can provide you with the knowledge and experience needed to help make a smooth transaction. For a successful purchase, a tentative buyer should find a broker, attorney, accountant and loan officer they trust and can work well with from the get-go. Why are all four players key? Let’s explore the responsibilities of each.
An experienced broker will do more than find a building that fits your needs and budget. A top-of-the-line broker will provide buyers with a property and market analysis, including the detailed measurements, uses, zoning and condition of the property, and properties in the area, to determine a fair purchase price. The broker will also facilitate all business-point negotiations between buyers and sellers, and provide a tentative buyer with business plan documents, including current leases of a potential property and the income they provide. A dedicated broker will also research costs associated with the property, including operating expenses such as utilities and tax information, gather old environmental studies and appraisals, and work with the lender to order new ones.
Release the wolves with an experienced real estate attorney and you’ll see clearly what has the potential to be negotiated – far more than just price per square foot. Further, your attorney will take the lead on drafting intent-to-purchase, purchase and closing documents, and will handle legal negotiations and risk allocation between seller and buyer. Your attorney can review applicable zoning laws and ordinances, determine the need for easements or other arrangements based on intended use, and will make sense of environmental and title reports and surveys. Finally, your attorney can work with your lender to finalize loan terms and documentation which is fair and reasonable.
With any substantial purchase, such as the purchase of property, seeking advice from a trusted accountant is key to a successful investment. A good accountant will provide the buyer with additional tax considerations and finance options available. Accountants also review past financials and specifics of the property to provide financial projections for a buyer, including new real estate costs and mortgage payments. Further, lenders typically require a CPA to prepare the buyers financial statements.
In general, a loan officer evaluates and recommends approval of loan applications for buyers. When “shopping for a loan”, it’s important the buyer reviews all different type of loans available to them from a variety of institutions. Once the buyer chooses a loan officer and product they are comfortable with, request a “good faith estimate” and have an attorney review the costs the bank is charging to finance the loan.