To get a better idea of the closing process, here is an example of a general checklist for a commercial real estate closing:
- Review the Purchase Agreement: Make sure you have all the necessary documents and review the purchase agreement carefully. These may include the letter of intent, purchase and sale agreement, and any other legal documents related to the transaction.
- Title Search and Title Insurance: Ensure that a title search has been conducted and that you have purchased title insurance to protect you from any title defects or issues that may arise.
- Property Inspection: Ensure that a final inspection of the property has been conducted to ensure that all necessary repairs have been completed and that the property is in good condition.
- Obtain Commercial Property Insurance: Before the closing, obtain commercial property insurance to protect your investment and satisfy any lender requirements.
- Financing: If you are obtaining financing for the property, make sure all loan documents are in order and that you have received a loan commitment letter.
- Closing Costs: Obtain an estimate of closing costs from your lender and ensure that you have the necessary funds to cover these costs, including the down payment and any prepaid taxes or insurance.
- Closing Statement: Review the closing statement, which outlines all the costs associated with the transaction, and ensure that everything is accurate.
- Sign Documents: Sign all necessary documents, including the deed, mortgage, and other closing documents.
- Finalize Payment: Make any necessary payment to the seller, and ensure that all funds are disbursed to the appropriate parties, including the seller, real estate agents, and lenders.
- Transfer of Ownership: Once all documents have been signed and funds have been disbursed, the transfer of ownership will be recorded, and you will become the new owner of the commercial property.
- Tenant Leases: If the property has tenants, make sure all tenant leases are transferred to the new owner and that any security deposits are properly accounted for.
- Licenses and Permits: If the property requires any licenses or permits, make sure that they are transferred to the new owner.
- Property Management: If you plan to hire a property management company, make sure they are notified of the closing and that all necessary documents are transferred to them.
- Post-Closing Tasks: Make sure to complete any post-closing tasks, such as recording the deed, updating insurance policies, and notifying tenants and vendors of the change in ownership.
