5d • General discussion
TIMING IN COMMERCIAL REAL ESTATE
Just a few things that are different in Commercial Real Estate.
- Scheduling property inspections. If the property is occupied by a tenant we have to arrange a day and time that works for the Inspector and the parties attending the inspection. Sometimes the Listing Agent shows up, sometimes the Seller themselves will show up. We also have to make sure that the Listing Agent is given enough notice so that they can notify tenants that we will be entering their space (usually a 24-hour notice). We always want to confirm that tenants have been notified. When we are at the properties we are NEVER the ones to tell them that the building is being sold or under contract. If they ask what we are doing we just let them know that we are there to look at the condition of the property. If they ask more you can always say "I don't know, the owner just wanted us to come look at the condition of the property" or "We are just seeing what work is going to need to be done". Sellers love to default to telling the Tenants that we are with the Insurance Company. That's fine - except I did have a Tenant one time start asking me about insurance and I don't know enough about insurance to keep that conversation going too long!
2.Lending and Appraisals. We don't have pre-approval letters. The lender will be reviewing the property just as much as the Buyer, if not more. And so they start their process once they are under contract in solidifying what lender they will be using, getting terms from the lender, getting a commitment letter from the lender, and then the lender ordering the appraisal. Depending on the lender and the size of the loan, they take the underwtiting through committee before approvals, etc. The appraisals right now have about a three week turn around time. So it's always important to check 4 weeks prior to close and make sure they are on track for the appraisal to be ordered and returned in time for closing.
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TIMING IN COMMERCIAL REAL ESTATE
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