When engaging in a transaction involving commercial real estate, it is important to have a well-drafted purchase contract that safeguards the interests of both parties.
The document should be comprehensive and address important considerations.
1. Property description
The purchase contract must begin with a precise and detailed description of the property. This includes the legal description, address and a statement of the property’s current condition. A clear property description is necessary to prevent any future disputes or confusion about the selling of the asset.
2. Purchase price and payment terms
Explicitly outline the purchase price, the method of payment and any deposit requirements. A purchase contract should also specify the timeframe within which to make payments, as well as any penalties or conditions for late payments.
3. Contingencies
Contingencies protect the buyer’s interests by requiring the seller to meet specific conditions before the sale can proceed. Common contingencies may include financing approval, environmental assessments or zoning approvals.
4. Inspection and due diligence
The contract should specify the timeframe for conducting inspections and due diligence on the property. This provision enables the buyer to thoroughly assess the property’s condition, review documents and address any concerns or potential issues before finalizing the deal.
5. Closing date and possession
The contract should clearly define the closing date and outline possession terms. This ensures that both the buyer and seller are on the same page regarding when ownership changes hands and the previous owner vacates the property.
With Salt Lake City recently reaching seventh place as one of the fastest-growing areas in America, it is an ideal time to consider investing in commercial real estate. Before making a deal, addressing these aspects of the deal can help you minimize disputes and ensure a more secure investment.