When purchasing a property, whether residential or commercial, the process is the same: Decide on must-haves, begin searching, choose a property, budget for the cost, arrange financing, place an offer/counter offer as necessary, seek the advice of the best and top real estate lawyers and professionals and finally, once everything is in place you may purchase the property. Upon selecting a commercial or residential property, the negotiation and closing process begins. For those who have not been through the property buying procedures, allow us to take a closer look at the closing portion of this transaction.
Closing is the last in a long line of steps for property purchase. To begin this process, the buyer and sellers must agree to the purchase price and all pertinent documents including proof of title, mortgage insurance, inspection reports, and contract are competed and collected.
Earnest money is money provided by a potential buyer to show they are serious about their interest in the particular Winnipeg, MB property and may be paid in cash or check.
Check the Title
A title agency or closing agent is chosen to verify the title of the property being purchased. The agent will confirm that the seller has legal rights to sell the property as well as ensure that all necessary taxes are current.
The buyer will have to enlist a home inspector to report the status of vital components of the property. Based on the inspection report, the buyers have the right to request corrections before continuing with the purchase or to back out altogether. Buyers need to do a final walkthrough of the property during the last 24 hours prior to closing to ensure it is as the buyer promised.
Unless you are purchasing the property in full with cash, you will require financing. In order for a lender to determine a fair loan value, the property must be appraised. If the lending institution is satisfied with the appraisal, they may speed up the closing process.
The property appraisal is a vital part of the lenders decision to approve a home loan. Once everything falls into place and the loan is approved, the title company will receive all relevant lending documents. The seller must settle all loans related to the property before the owner may sign these documents and an escrow account is opened for more streamlined transactions.
Now it’s time to sign all of the documents for the lender, the seller and the title. Depending on the state, the seller will either sign at the same time as the buyer, or prior to the closing date. This is the only part of the process that is slightly different for commercial properties. Since commercial real estate is considered an investment and these properties are usually owned by entities rather than individuals, more care must be taken to formally investigate all buyers. Due to the high risk involved, a diligence period is determined in which all documents – leases, etc. – are agreed upon by both the buyer and the seller.
All real estate transactions require care and caution so it is suggested to appoint a real estate lawyer to aid in expeditious and efficient closing proceedings by avoiding errors in the proceedings.