Commercial real estate involves considerations that residential property buyers typically do not consider. Stiff competition and high dollar values can make emotions run hot and lead to blunders, especially in booming markets like Florida, where people want to move quickly.
Buyers and sellers need to head into commercial real estate deals, preparing to avoid common mistakes.
1. Relying on emotions to make decisions
Good business comes down to having the right numbers and doing what makes sense. Commercial real estate transactions should not have the emotional element that purchasing a home does. Parties should view the property as an investment and not allow feelings to cloud judgment.
2. Not putting everything in writing
Crystal clear agreements keep communication and relationships in good standing. The contract protects everyone and can clear up misunderstandings later.
3. Not investigating why the owner is selling
Buyers must remember that a seller wants to present the property in the most favorable light. A buyer should discover as much as possible about why the owner is moving on from the location and what challenges could lie ahead.
4. Talking about a deal before signing the contract
The commercial market is exceptionally competitive. Sharing information before a deal closes can lead to someone else swooping in and compromising the transaction with a better offer.
5. Closing before zoning approval
If a buyer’s diligence does not include zoning, the individual could end up with a very expensive mistake. Parties should discuss how an owner can use the property, and the buyer should secure documentation to establish the spot is ready for the intended use.
Even experienced buyers and sellers can make these mistakes and others. Diligent attention to the detail can save a person many headaches during a commercial real estate deal.