New commercial real estate investors have much to learn. It’s not necessarily and impossible feat to accomplish and it delivers wonderful rewards in ROI. But, there are some complexities involved. Although, as you begin to get into the process and learn it, you’ll become more and more comfortable. One decision you’ll make as a commercial real estate investor is how to facilitate the closing. More particular, closing with an attorney and closing with a title company. What’s the difference and what should you know?
About Commercial Real Estate Closings
Let’s first just touch on what a real estate closing entails. This is just a process of wrapping all the working parts up into one package, so-to-speak. Most people know, closings are filled with numerous parts, such as a title search, insurance, valuation, fees, and more. Commercial real estate closings are generally more complex than their residential counter parts.
Closing with a Title Company
Generally speaking, a title company is an insurance entity which offers indemnity policies. Most title companies either have an attorney on staff or on retainer and are run by real estate professionals. These individuals know the process well.
Simply put, a closing is the final performance of all of the agreements you made with the seller and your lender for the purchase and financing of your new home. If you are buying solely with your own cash, no lender will be involved. If you are financing your purchase, however your loan will close at the same time and place as your purchase. —Nolo.com
However, there’s an important point here. When you close on any property with a title company, you are using a third-party. And, this is very critical because the title company only represents itself and not you as the investor. (Though they will do their best, it doesn’t necessarily benefit you.)
Closing with a Real Estate Attorney
Closing with a real estate attorney is not really different, as far as the nuts-and-bolts process goes. But, when you hire a real estate attorney for your commercial property investment, he or she works for you. In other words, the attorney is there to represent and protect your interests. This is due the fact your attorney has an ethical and legal duty to you. They must abide by their fiduciary duty which means they’ll more closely examine the deal since they work directly for you.
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