Commercial Real Estate Documents Checklist

Commercial Real Estate Documents Checklist
Purchasing commercial real estate can be tricky, but having a checklist beforehand can be really helpful, so that you don’t forget anything. There are some documents that are not necessary, but are still beneficial to the buyer and the seller. Carry a checklist with you beforehand to ensure that everything is put together properly and is in order.

 Due Diligence Checklist For Commercial Property Closing Checklist for a Real Estate Agent

Precontract
Precontracts are a smart choice for both residential and commercial real estate. A precontract is simply a description of a contractual agreement that is not yet in place. In a way, a precontract is like a plan of action, as well as a promise for an agreement before the agreement has actually been implemented. A precontract ensures that the buyer (or investor) has everything on track and that they will see a return on their investment. The precontract outlines the promise of the agreement before the agreement has actually taken place. This is especially beneficial to someone who is putting down earnest money or who is promising verbally to go through with a purchase, but has not actually filed out the paperwork. For example, a seller may have three interested buyers, but may decide on one individual because she is paying a higher price than the other two. The precontract is put into place to say that the buyer is promising to make the purchase within a certain amount of time for a certain amount of money. That way, the seller has some assurance that the deal will go through.

Prepared Affidavit and Memorandum Agreement
The Affidavit and Memorandum Agreement is usually a simple statement that the involved parties have entered a written agreement over the property. It can be a blank form that is filled in by hand. The form is an extra step, but it is helpful in case the actual agreement or document is lost. It can also be used to outline all of the paperwork that was filled out and agreed upon by all parties. The Affidavit and Memorandum Agreement usually lists the state and county that the agreement will take place in and discusses the commercial purchase and sale of the property andor related business or supplies. The agreement is a short agreement and is signed and dated by all parties. An affidavit should be signed by a notary, which means all involved parties and the witness should meet at the notary’s office, bringing their identification cards. There may be a small fee for getting the document notarized.

Prepared Earnest Money Escrow Agreement
If earnest money is being put down, an agreement should be drawn up beforehand. Earnest money is an agreed-upon amount of money that the buyer will give to the seller (usually put into an escrow account until the sale is completed). If the agreement is not concluded satisfactorily, the seller usually has the right to keep the earnest money. The best way to describe earnest money is that it is a good faith deposit. An Earnest Money Escrow Agreement outlines how much earnest money is being put down, why and how the money is to be used.

Commercial Real EstateBusiness Agreement
Finally, put the entire agreement in writing in a formal purchase agreement. This is the final agreement (on paper) that the buyer and seller enter into and which will seal the deal and make the purchase final. After this paperwork has been completed and payment has been made in full, the buyer can take over the business property and the seller has completed the sale. If making a commercial real estate purchase which includes some type of business or materials, make sure that the purchase agreement lists all assets that are part of the sale. That way, you will not find yourself in the position of expecting to buy, for example, a complete motorcycle repair shop with all current business contacts, equipment and stock and end up owning only an empty building. The business agreement will vary according to what the buyer and seller agree on, but should be looked over by a real estate lawyer or experienced broker.

source: Beth Lytle

A Legal Description of Property Documents

Real property, as distinguished from personal property, can be loosely defined as land. Real property encompasses the surface and everything attached (that is, buildings), everything below the surface (such as minerals) and the airspace above the surface up to a certain altitude. Maintaining accurate property records and conveyances requires a uniform methodology for physically describing real property across different jurisdictions.


Metes and Bounds
Documents describing, transferring or conveying real property often contain a legal description of the land. This description is often referred to as a metes and bounds description, or a bounded by description.

Uses
A legal description of real property appears in instruments such as sale contracts, deeds and other agreements relating to the property. A legal description in a property document is usually included as a separate schedule, appendix or attachment.

Boundaries
A legal description of real property uses physical features and geographical references to identify and describe the property's dimensions. The legal description will typically begin in one corner of a lot and identify the exact location of that corner. The description will then trace out and identify the length, path and corner formed by each boundary line, eventually returning to the first corner.

Importance
Any variations or inaccuracies in the legal descriptions in property documents could affect the validity of the title transfer between parties. The legal description is also helpful in identifying property boundaries when making alterations or improvements, so a proper description is essential in preventing or deciding boundary disputes between neighboring property owners.

Lot and Block System
The lot and block system is one of the simplest methods of legally describing property. Typically, this system begins with a subdivision plat or map. That plat or map is divided into smaller blocks, with individual lots demarcated within the blocks. Real property will often be referred to by its Section, Block and Lot numbers. This system is commonly used by municipalities and their building departments and tax assessors.

source: Mike Caruso

What Documents Are in Real Estate Closing Package

A real estate closing is the point where you actually borrow money to buy property, requiring a large number of documents. Closure is also where you sign and give you guarantee to repay the loan.

Closing Checklist for a Real Estate Agent How to Prepare for Closing Real Estate

Truth in Lending Statement
This paper is important to check and then check again. It contains information about the interest rate being paid, the annual percentage rate, the amount financed and the total amount to be paid over the life of the loan.

The details of the amount financed
This statement summarizes the financial costs, such as points, that the buyer may pay.

Monthly Payment Letter
This document shows a breakdown of the monthly fee, which includes payment for principal, interest, insurance, taxes and currency Escrow Account.

Mortgage
This is the actual document that places a lien on the property as collateral. It is a document that allows foreclosure by the bank if the loan is not paid.

HUD Form 1 or DisclosureSettlement Statement
Another very important document, this document contains information about the actual settlement costs. Carefully check this paper for errors as the closing agent reviews the form.

Pro-level agreements
This document describes how items such as property taxes and school taxes will be pro-rated by the new owner and the previous month for the property acquired.

Search or Abstract Title
This document can be very long as it provides the history of the property. Any documents that are recorded on the property listed in the abstract.

Deed
It is a piece of paper that actually transferring ownership of real estate from the seller to the buyer. It also contains the legal description of the property.

Insurance
Proof of insurance is required at closing on the property. This can include flood and hazard insurance, depending on the location of the property.

Additional Documents
Depending on the type of transaction and the country in which the sale occurs, there may be additional documents. Some documents Certificate of Occupancy stating the property in accordance with the building and zoning codes, an Affidavit Judgment authorizing both the buyer and seller have a judgment against them, statement assumption if the mortgage is being assumed by the buyer and the Federal and State Estate Tax Affidavit if the previous owner had died.

Sources: Diane Stevens

Forms for Real Estate Sales

A contract to purchase is in a standard form real estate transactions.
While some real estate sales involve no more than a handshake, there are forms that are commonly used to make the sale of real estate transactions law. Some documents are standard forms used by real estate agents, while others relate to the mortgage bank and the private sector, policy title and home warranty information. It is also common for Member Organizations to require real estate agents to use the standard form.

Property Disclosure Form and List
In the transaction of real estate agents, property inspected and all deficiencies Noted in the property disclosure form. Form of disclosure of property the make potential buyers aware of the structural and water damage, repairs are deferred and Whether the property is located near hazardous materials.

Realtors also have to prepare an agreement for each property that they list. The agreement lists to Determine the relationship between the agent and the seller. Seller agrees to pay the listing agent a percentage of each listing that sells.

Funding Form
When buyers the make an offer, it is common for the seller or real estate agent to ask for proof that the funds available to make the purchase. Lender-generated pre-qualification letter specifies requirements for home loans and borrowers have to PROVE through, or are in the course, complete the mortgage underwriting process. Some agencies refused to work with buyers who are not pre-approved at the time the offer is made.

Offer to Purchase and Contract Documents
Most real estate sales Including written offer. Usually offers are specified in the form of a single or series of documents, was first settled by the buyer. Sellers either reject the offer or to submit counteroffers. All sales are recorded on the form offered. If the offer is accepted, any sales recorded in the purchase contract. A contract of purchase Including the sale price, seller concessions, financing basic information, warranty information and projected closing date.

Private financing Form
It is common, especially among buyers who are unable to secure financing from banks, private financing for the document to replace the documents the lender. For these transactions, land contracts, lease-to-own and private mortgage documents accompany the sales contract. Some forms of private financing raised in the list of office actions, such as bank financing information is recorded in legal documents that the seller is in the first lien position to be repaid ..

Sources: Jim Hagerty

Real Estate Lawyers That Get Real Results

if you have purchased or are thinking about purchasing a real estate property, whether it is a house, commercial building or land, you may want to consult a real estate attorney in order to protect themselves from any unexpected liabilities that may be attached to the property. Here are some of the different areas of focus that a real estate lawyer can handle.

Commercial Real Estate

Commercial real estate law is the law of real estate categories which set the standard for commercial leases and purchase and sale of commercial real estate. Commercial lease lawyer familiar with the term commercial lease can help you review potential lease and avoid future pitfalls.

Condominium and Cooperative

Both condominiums and cooperatives are types of "common-interest" communities. In the case of condominiums, the owner is usually governed by CC & R, (condition, Abbey, & Restrictions) document. Violators can be fined, and defense against charges of infringement may find it worthwhile to speak with a lawyer CC & R practice.

Construction Dispute

Construction disputes are common in the construction industry, and many of them revolve around construction delays. Due to delay debate can become tense and time consuming, construction dispute mediation can be a great alternative, inexpensive to litigation. Real estate attorney can serve where mediation has failed.

Owner and Tenant

Landlord and tenant law is at the foundation of many real estate transactions, including evictions, lease signing, rent, and more. It's hard to be a successful landlord in any situation, but familiarizing yourself with the real estate laws provide firm ground to stand on should a dispute arise. A good grip of the law is important for renters as well. Tenants should review our "What Every Tenant Needs to Know" article to get started.

Mortgages

The mortgage is a lien placed on your property by a bank or financial institution, usually in exchange for a large loan. There are several types of mortgages currently available to homeowners, and choosing the right one for your situation is one way to avoid foreclosure can take place at a later date. Talking to a real estate attorney is the first step to staying on top of your mortgage.

Purchase and Sale of Residence

Purchase and sale of a residence or home can be done completely on your own, but more often done through a broker or agent who is experienced. While brokers can make selling your home easier, it also brings the contract and commission into the mix. If you decide to sell through agents, real estate attorney can review your contract with them before signing.

Title and Boundary Disputes

The title and boundary disputes central issue of property ownership: who owns the property and where the boundaries of the property? Lawyers agreed limit can help you if a public record of your property boundaries differ from the limits agreed upon with your neighbors. In fact, if you treat specified as boundary lines for long enough, can legally be the property boundary line under the approval to legislation perimeter.

Zoning, Planning and Land Use

Zoning, planning and land use law gives local governments control over the way in which land is usually with the goal of creating a uniform environment and area. Zoning laws can be very complex, and many types of existing zoning to regulate the building. Violations of zoning laws may be an offense (and expensive) are serious, and they are accused of violating zoning laws should talk with a local real estate attorney in their area

source : Mike Caruso