By Rohit Kothare on May 6, 2020 5:27:35 PM
If you are planning to put your lifetime investment in property purchase, it’s better to be thorough with the process. A checklist for buying a Commercial Property will be helpful to make an appropriate buying decision. Read each point patiently, and soon your curiosity will turn into knowledge.
1. Identify your Commercial Property Interest
What kind of commercial property suits you depends on your area of interest.
There are three main types of Commercial Properties- Retail, Industrial and Commercial Offices.
After you select the kind of Commercial Property you want to buy, your Return on Investment and the risks involved with it follow. This decision helps you take the next necessary steps involved in the purchase process.
2. Location Research
The condition of the neighbourhood should be verified at the initial level. Location is the most basic and mandatory checkpoint, as the entire purchase decision revolves around the property location.
Factoring plans like renovation and expansion ensures your purchase satisfaction. While buying a commercial real estate, it is important to keep in mind all the environmental regulations. Most of the property investors find this as a safe method to save future expensive cleanup. So it’s better to avoid the burden.
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3. Background Check of the Property
Start knowing the basic details like the age of the commercial property.
Identify the reason to know why the owner wants to sell the property.
Request the building approval plan from the property owner.
Also enquire about the list of all permits, tax statements for the last few years, existing insurance papers and pending claims against the property. If there were any tenants before the purchase, then verify the security deposits and agreements.
4. Complete the Site Visit
No decision about buying the property can be made without a site visit. Ensure that your business goals can be accomplished by the property space.
In case some vehicles are coming to your property constantly, the condition of the road connecting the site should be a concern to you.
In addition to this, two different commercial properties of your interest might be in the same area or nearby location. But the one boasting better quality specifications will always be given the first preference.
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5. Property and Building Specifications
It is also equally important to understand the Operational details of your future commercial property while you are checking the building specifications.
Before finalising the deal, ask who did the Interior fit-outs of the property. Check if the flooring, wiring, plumbing, ceiling, air conditioning is in good condition. Confirm if the electricity system has the claimed capacity.
A commercial property space can have a major concern of adequate parking for the required usage, so check that in person. Other physical conditions of the property should also be thoroughly checked instead of discovering them while you are enjoying your post-purchase.
6. Commercial Property Valuation and Prices
The market value of the property is the price at which the property could be purchased at the open market. Stamp duty is payable on the market value or the valuation of the property whichever is higher, and stamp duty is collected by the Government.
The registration of transfer or Sales deed differs from State to State, where the property is situated. Check the set forms of registration rules of your required State.
7. Documents to Check before Buying Commercial Property
You don’t want to leave any stone uncovered; due diligence is the critical stage in any property acquisition.
Utilise most of your time in reviewing all the records, financial information and documents. Verify the legal description of the property. Check the copy of construction Blueprints and the most recent ‘title policy’ of the property.
A sales deed has to be mandatorily registered; it is the core document which is the proof of the sale and transfer of the property. If the property has had various owners, mother deed known as the parent documents traces the ownership of the property from the start.
One should refer to the records of the registrar office in case of a missing sequence. If one holds a Power of Attorney, verify it as it allows property transfers on the owner’s behalf.
Related Post - List of Legal documents you require when buying a Property
8. Financial Assistance
What you can afford depends on your current financial situation. How much money you can afford to pay off the loan and how much you can do the downpayment as to be considered. It is wise to line up your financial options in advance.
A commercial property loan can be availed by any self-employed individuals and professionals. Interest rates are fluctuating, and the Commercial Property loan is different from a House Loan.
Get in touch with the banks providing this facility for detailed information and help. Expert legal and technical assistance is provided, which also eases the hassle-free documentation process. Monthly instalments are done in a flexible tenure period by the banks. Be sure you compare interest rates and repayment terms from the best finance options available to you.
9. Partner with the Right Team to Make the Offer
To ensure the success of the investment, get a hold of wise experts. When a problematic situation arises, it’s easier to know whom to turn up and get into details to simplify the deal.
Get in touch with accountants, tax attorneys, Commercial Real Estate Attorney, Lenders or Mortgage Brokers if required. Get the ‘purchase offer’ reviewed by your attorney.
In the end..
Arm yourself with plentiful questions to get a clear picture to make the purchase decision. If you find it complex, do not hesitate to consult a legal trusted Real estate attorney. Give a thought about the legal advice before making any hasty decision of negotiation. And good luck with your purchase.
By the way, Kohinoor Developers has some great commercial projects in Pune. Visit: https://www.kohinoorpune.com/commercial-projects-in-pune to know more about them.