5 Common Terms on Purchase Contracts - Episode 19

Thanks for following us! This is Episode 19 of ComReal’s Industrial Real Estate Podcast.  Bringing you market information along with valuable information on the Industrial Real Estate Sector in South Florida, and across the country. Visit our website for more info and our listings. https://www.warehousesmarket.com Buying a building for the business can be a great strategy and winning long term investment. There are many terms involved in the purchase process and sometimes it can get complicated. Here we explain 5 of the most common terms found on purchase contracts. Effective Date: Date the contract is executed, and deposits are made. Clock starts for inspections and financing. Due DiligenceBuyer gets to inspect property and make sure it fits for business. From building to zoning. If anything is not satisfactory, Buyer can cancel contract and get escrow deposit back. Use this period to find out anything, not before making an offer. Many Buyer lose properties because they spend too much time doing Due Diligence items before having control of property. Financing Contingency           During this period, Buyer can obtain financing (SBA, Conventional), if applicable, for the purchase of the property. . Can run at same time as Due Diligence. Escrow DepositGood faith deposit with Escrow agent. Done at contract execution and after contingencies. Common practice is to deposit it at Buyer’s attorney escrow account. Third party escrow agent could be used too. Assignment: Many buyers assign the contract to a related entity. Very standard. Owners a lot of time want to separate the business entity from the property entity.   Featured Property: We have a client looking to Purchase 60,000 – 90,000SF Industrial Building in South Florida.   Industrial Tip: Consider Releasing escrow after inspections and financing contingencies. Helps Seller show you are committed to building.   Thanks for watching us. Hope this is helpful. Please subscribe and leave us your comments. You can find more about us at: www.WarehousesMarket.com   Follow us on social media at: Instagram: @edisonindustrial   Twitter: @edisoncre   LinkedIn: Edison Vasquez PA.