3 Tips for a Successful Residential Real Estate Closing Process

Whether you’re buying or selling a home, closing day is the most important day in the process. It’s the day you’ll take or relinquish ownership of the property. To ensure a successful closing day, you’ll want to handle the closing processwith care.

You can expect your real estate closing to take approximately two hours. You can also expect multiple parties to be involved, including a closing agent, your lender and your realtor (if applicable). To ensure a smooth closing process, here are some tips.

1. Do Your Due Diligence

If you’re a buyer, make sure you understand what you’re purchasing. Conduct a final walkthrough of your property to confirm there are no repairs still required or additional property issues. Look over your purchase agreement to ensure everything is as promised.

If you’re a seller, complete all necessary repairs as far in advance of closing as possible and make sure you’ve prepared the home well for its new owners.

2. Prepare Documentation & Payment in Advance

You’ll need some documentation on the day of your closing, including a photo ID and any outstanding forms for the title company or loan officer. You’ll also need the payment for your closing costs depending on your financial responsibility. 

In most cases, you can use a cashier’s check made payable to the closing company. Prepare your closing documents and payment in advance to ensure a faster closing process.

3. Consider Hiring a Real Estate Attorney

Although Texas doesn’t require you to have a real estate attorney when buying or selling property, real estate transactions are often complex. And sometimes disputes can arise during the closing process. An attorney can act on your behalf in the event of these disputes. 

For example, there might be something in the purchase agreement that wasn’t there before. You’ll want an attorney by your side to ensure your rights are protected as a buyer or seller.

Buying or Selling a Home? Reach Out to Lonergan Law Today.

Are you ready to buy or sell a home? Or are you worried about the closing process? The team at The Lonergan Law Firm, P.L.L.C. can help. To learn more about the closing process or to schedule a consult, give us a call at 214-760-6768 or send us a message.

Commercial Real Estate: 5 Red Flags to Look for Before You Sign a Lease

Signing a commercial real estate lease marks an exciting time for your business, as it shows growth and greater opportunities for the future. Before you sign on that dotted line, however, it’s important to read your commercial lease in its entirety. Ensure you understand your rights and responsibilities, as well as the landlord’s rights and responsibilities.

5 Red Flags to Watch Out for in a Commercial Property Lease

If you sign an undesirable lease, it’s nearly impossible to exit without suffering some form of loss. As you read through your draft lease, watch out for these red flags.

1. Automatic Rent Increase

An automatic rent increase clause allows the landlord to increase the rate of rent automatically after a chosen period of time, often in yearly increments. For start-up businesses or small to medium-sized businesses, an automatic rent increase can cause unexpected financial struggle. Your lease should clearly explain any automatic rent increases or renewal terms, if applicable.

2. Broad Renewal Clause

Your lease should include a renewal clause that explains your options should you need to renew your lease. Make sure the renewal clause defines terms with great specificities, such as covering how much notice you need to provide to renew, how may renewal terms you have available to you and much more.

3. Unexpected Fees

Avoid a lease that mentions “occasional” or “unexpected” fees. With this wording, some landlords may attempt to charge your business fees that are not listed in your contract. If you have any concerns with the wording regarding fees, require the landlord to state each one outright in the lease itself. You don’t want unforeseen financial issues cropping up mid-lease.

4. Unfair Relocation Clause

Your landlord may try to work in a clause that says it may choose to move your business to another storefront or floor at any time. While relocation clauses are common in commercial property leases, you can ask for certain terms to be included. For example, you can ask to include contingencies that require the landlord to help pay for relocation and allow you to pay the original rent amount. If you cannot remove the clause or add in such contingencies, you may want to think twice about signing on the dotted line.

5. References to Spoken Promises

Any promise made by your landlord should be outlined in writing within your lease. Even if you know your landlord personally, a written agreement solidifies your relationship, protecting both your business and the landlord’s property. Make sure to include all verbal agreements within the written lease before both parties sign.

Does Your Commercial Lease Show any of These Red Flags?

If you have concerns about any of the clauses included in your draft commercial property lease, reach out to a professional commercial property attorney for help.

Commercial Real Estate Mistakes To Avoid

If you’re new to the commercial real estate world or are looking at your first investment property, here are some points to consider before signing on the dotted line. 

Whose Name Goes on the Commercial Real Estate Paperwork?

In most cases, your business should purchase commercial property in the business’s name, not your own name. You’ll protect yourself from liability should there be an accident on the property or a problem with the title. It’s best to speak with an attorney who is familiar with commercial real estate matters before making a final determination on whether your name or your business’s name should appear on the purchase agreement. 

What Was the Commercial Property Used for in the Past?

It’s extremely important to know the property’s history. What may look like a hip, tiny restaurant now may have been a gas station or environmentally-regulated, hazardous waste site. Perhaps the prior sale happened decades ago before certain regulations took effect, or the property was inherited, repurposed and reopened on top of a chemical hazard before current regulations were in place. An experienced attorney can help investigate the history and the title and clear the way for sale and financing.

Commercial Zoning and Licensing

Evaluate and investigate the permissible land use for a property. If you plan to keep any structures that are present on the property, you must understand if you are legally allowed to operate your type of business on this particular property. The zoning laws governing the property determine the proper use and occupancy.

Additionally, you can’t always just move your business into an empty building on the property after the closing. You may need a new occupancy license or permit to operate. 

Commercial Loan Applications and Underwriting

Even before you start your search, explore lending options with several lenders. It’s important to understand what your lender will require before applying for a loan to purchase your property. You should also know what amount you’ll qualify for, if the lender will restrict the kind or location of the property you buy, or impose other restrictions on the loan qualification process. 

You should also understand your short- and long-term expectations for a property. Create a budget and plan for your move up to a year ahead of time. Investigate your up-front and closing costs, monthly expenses, mortgage expenses and what you need to generate in income each month to cover these expenses. 

Location, Location, Location

This is the cardinal rule in any real estate purchase. Choosing the wrong location can spell disaster for your business if there is no traffic or for resale in the future. Your broker can help you analyze the factors that are important to your business to see if a specific property makes financial sense for you. Don’t buy on emotion. You should also consider the intangibles like: 

• Employee security and commuting distances
• Traffic patterns and neighborhood demographics
• Will customers come if they perceive that the neighborhood is not safe

Rely on Attorneys With Commercial Real Estate Experience

The most important thing you can do throughout the purchase process is to perform your due diligence on the entire transaction. Your broker or agent is knowledgeable, but not objective and independent from the sale or purchase. 

Work with an attorney with a history of commercial real estate experience for dedicated help. If you’re in Texas, we welcome you to reach out to us. Contact us as soon as possible to review your property’s details, title and history.