Florida business owners often ask how commercial real estate closings differ from residential ones. One stark difference that you’ll come to notice quite quickly is that the former is far less regulated than the latter. One of several reasons that Melbourne commercial real estate closings get delayed is because there’s no set standard form or procedures that must be followed as part of this process.
The funds that a bank lends a business owner are often higher than what they’d offer a homeowner and with far fewer protections on their investment. Since their risk is higher, they often request documents from their borrowers up until late in the game. Their review of this information can result in a delayed closing.
When a titling company is brought in, they may find that the title is encumbered or has some other issues. While some buyers may walk away from a problem property, others may remain interested. Clearing liens and other titling issues can take time to resolve, pushing back a closing beyond the standard 45 to 60 days.
Appraisal issues can also result in a delayed closing. Oftentimes, it may reveal that a property has damages that have to be fixed before a purchase can go through. A property may also be appraised for less than the contracted amount. Both parties may need to return to the negotiation table to reach an agreement about these repairs or a new sales price.
It’s often during a final walk through that buyers will discover that the property’s owner failed to make requested repairs or that they made substandard ones. They may discover issues with the building’s major systems such as the heating and air, electrical or plumbing. Both parties may find themselves needing to go back and negotiate for a later closing, additional repairs or for concessions to be made.
While most property closings take place within 60 days of an offer having been made, there are many variables, including issues with the seller, bank, buyer, title company, property and others that can cause a significant delay. If you want to keep things moving as smoothly as possible, then an attorney can advise you of why it’s better to work with a lawyer over a title company.
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