Buying or selling a business in Texas?
A commercial real estate transaction involves a property exclusively used for business purposes. This includes properties like restaurants, warehouses, office buildings, multifamily rentals, strip malls, and hotels. A seller and a buyer are the key parties to a commercial real estate transaction. However, many more parties typically get involved throughout the contract negotiation, drafting, and closing processes.
Specific business and legal professionals can help the real estate transaction process go smoothly. Whether you’re looking to buy an existing business or a business owner who wants to sell one, here’s who can help you.
Professionals to Call On When Buying or Selling a Business
Realtors
A realtor is a licensed agent who represents either the buyer or the seller.
A seller’s realtor (or a listing agent):
- Markets the seller’s property
- Helps the seller find a suitable buyer for the property
- Makes an offer to a potential buyer
On the other hand, a buyer’s realtor helps the buyer find the right property to invest in, and they negotiate with the seller’s realtor.
Title Insurance Company
A title insurance company mutually represents both the buyer and the seller and ensures that the property is clear to sell.
This type of insurance provider performs a few different functions:
- Conducts a title search of public records on the property
- Examines the survey
- Discloses any title defects such as undisclosed liens, unpaid taxes, erroneous public records, or easements
Additionally, the title insurance company provides policies to protect the lender’s financial interest in the property (lender’s insurance) or the buyer’s purchase price (buyer’s insurance). This type of insurance provides coverage for any defects that may be discovered and become an issue for the insurance holder in the future.
A title insurance company also handles the escrow accounts and manages deposits and withdrawals, including honest money, escrow fees, realtor or broker fees, taxes, and the final payment to the seller at the closing.
Property Surveyor
The title insurance company often requires a recent survey from the seller as part of the business sale. Suppose the seller does not have one that’s acceptable to the title insurance company. In that case, a property surveyor may be hired by either the seller or the buyer, depending on the terms of the commercial real estate purchase contract.
A surveyor visits the property, maps out the property boundaries, verifies structures within and near the boundaries, and prepares a survey.
Lenders
Buyers often need to finance their commercial real estate purchases. The lenders in these situations typically require certain things before approving a loan to the buyer. These things include a copy of the commercial real estate contract executed by the seller and the buyer. Other documents may also be required, such as internal documents approving the purchase of the property, if the buyer is an entity.
Commercial Real Estate Attorneys
A commercial real estate contract is complex and includes many essential terms and conditions. An attorney can add value to your commercial real estate transaction in various ways.
Protecting Your Interests
A seller’s attorney can protect the seller’s interests by drafting a commercial real estate purchase and sale agreement with terms favorable to the seller. Alternatively, a buyer’s attorney can protect the buyer’s interests by thoroughly reviewing the terms of the sale agreement drafted by the seller’s attorney. They’ll also help you, as the buyer, understand your rights and obligations under the contract. The seller’s and buyer’s attorneys will also negotiate fair and favorable terms for their respective clients.
Preparing Required Documents
In addition to the commercial real estate contract, there are many other documents that the seller, the lender, and the title insurance company will require. These documents may include:
- Certificate of corporate resolution authorizing the sale of property
- Special warranty deed, shareholder’s or board of director’s resolution
- Seller’s affidavit
- Certificates of incumbency
An attorney can prepare such documents and thoroughly review the documents prepared by the opposing counsel to ensure all terms are favorable and legally sound according to Texas commercial real estate law.
Buying or Selling a Business in Texas? Contact a Commercial Real Estate Attorney Today
Are you buying or selling a business? In that case, you need to ensure that every document and transaction is done legally (to prevent future losses and headaches) and with terms that benefit your interests. Contact a Dallas commercial real estate lawyer today to ensure your commercial real estate transaction goes off without a hitch.