A commercial real estate purchase agreement, once signed, finalizes the sale of a commercial property from one party to another in exchange for an agreed-upon sum. The document contains details of the property being sold, each party’s obligations to one another, and what must occur in order to close the deal. Commercial property is often defined as any real estate intended for the generation of profit in some form. This includes:
- Retail stores & malls;
- Office buildings;
- Multi-family buildings;
- Industrial buildings / warehouses; and
- Agricultural land.
What is a Commercial Purchase Agreement?
A commercial purchase agreement is a legal document that is written once the seller and buyer have agreed on a purchase price and wish to move forward with the transaction. The first draft of the contract will often be written by the seller of the property (or their attorney), who will then send the document to the buyer or the buyer’s attorney. If the buyer finds anything they wish to alter in the contract, they will send back any requested changes. This back-and-forth process will continue until both parties agree on the provisions included in the form
Overview of the Selling Process
While the exact process will differ depending on whether or not a broker was used and the terms negotiated, the following is a general outline of the process one undertakes when selling property.
- The decision to sell the property is made;
- Owner gets into contact with a broker (optional, but recommended);
- A listing agreement is completed signed (if using a broker);
- The property is listed on selling platforms (handled by broker, if using one);
- Negotiation begins (upon finding a potential buyer);
- A purchase agreement is completed + signed;
- The buyer is given time to conduct due diligence;
- The parties close on the deal (money is exchanged and commissions are paid);
- The new owner records the deed.