Are you in the market to sell commercial real estate in Wisconsin? The goal is always a successful closing experience for you and the purchaser. There are challenges and circumstances specific to commercial property, however, that can make commercial real estate transactions end in disarray and disappointment. The transactions, after all, involve sales prices that are much higher than residential real estate, so the stakes are higher. Much more local, city, and state information must also be researched and analyzed. It's a longer, more intricate process.
At Heritage Law Office, our commercial real estate lawyer based in Wisconsin handles all types of commercial real estate transactions. Making the closing experience a good one for all parties is always our goal. We are proactive. We are thorough. And we have the skills. Contact us at 414-253-8500 or fill out our online form to schedule a free consultation and learn more about selling commercial property in Wisconsin.
Selling Commercial Real Estate in Wisconsin
Commercial Real Estate (CRE) is property used for business rather than residential purposes. Selling CRE is a process that requires diligence and consistency. The following are six basic action items most states require for a successful commercial real estate transaction.
Determine the Selling Amount
Determining the amount the seller is willing to take for their property may take some work. There are numerous considerations, such as any lien amounts that will need to be paid off at or before closing, as well as the value of the property. If the property is being sold along with a business, the value of the business must also be determined. Finally, the listing price should leave some room for negotiation.
Enter into a Purchase Agreement
Once the seller and purchaser agree on the terms of the sale, a purchase agreement will be executed. This agreement should spell out all the terms of the agreement reached by the parties, including the obligations each party must carry out in order for the closing to run smoothly. Having a commercial real estate attorney prepare the agreement is greatly beneficial. It is best if each side retains its own lawyer.
Comply with Purchaser Obligations
There may be certain requirements the purchaser must comply with to obtain the financing they need to purchase the property. This may include property inspections and appraisals. The seller will need to be considerate of these requests and comply with them so that the purchaser can meet their obligations under the purchase agreement.
Sign the Deed and Other Closing Documents
For the closing on the property to be complete, there are certain documents the seller will need to execute. This includes the deed and closing statement, as well as other documentation that may be required by the specific jurisdiction, including national, state, municipal, and local requirements. It is in the best interest of the seller to have their own attorney review these documents to ensure they know exactly to what they are, and are not, agreeing.
Payoff Existing Liens
Although paying off the actual lien is a matter that may be handled by the closing agent, the seller needs to be certain the agreed-upon selling price is enough to pay any liens on the property as well as any other fees, like the amount owed to the real estate agents, the closing agent, and the attorney.
Hand-Over Property to Purchaser
Once all documents have been signed, and the money has changed hands, it is time for the seller to hand over the property to the purchaser. This includes the actual keys, security and alarm codes, and any other information the purchaser needs to get full use of the commercial property.
Documents You Need to Sell Commercial Property in Wisconsin
States vary as to what documents a seller must provide. Some of the more commonly required documents include:
- Deeds. The deed is the legal document that transfers ownership of a property from the seller to the purchaser. Every state has requirements regarding the proper way a deed should be executed to be valid.
- Assignments of Rights. In some situations, the business located on or in the CRE is also set to be transferred. When this happens, an assignment of rights is needed to spell out exactly what the seller is transferring to the purchaser.
- Disclosure Statements. Although not required in every state, a disclosure statement is the seller's way of legally disclosing to the purchaser any defects the property has.
- Property Access. Although not an actual document, the seller may be required to give the purchaser and their agents access to the property prior to the purchase in order to comply with the terms of the purchase agreement.
Obtaining an experienced real estate attorney to help identify the documents needed is very helpful for all parties involved.
Seller's Rights and Obligations in Commercial Real Estate Transactions
A seller's rights and obligations vary according to the state where the property is located. Even so, most sellers have certain rights regardless of where they are, including:
- The right to have an attorney represent them throughout the process
- The right to negotiate the terms of the purchase agreement
- The right to enter into new leases and contracts
The seller may also have general obligations, such as disclosing material defects of the property to the purchaser, or ensuring that they believe the title to the property is clear.
How a Real Estate Lawyer Can Benefit a Commercial Property Sale
There are many reasons to hire a real estate lawyer for a commercial property sale. At Heritage Law Office, our real estate attorney handles complicated commercial real estate matters and understands the ins and outs of commercial financing, buying, selling, and developing commercial properties. We also assist with issues related to:
- Land use and development
- Property liens
- Title insurance
- Environmental compliance
We also assist with negotiations of sales prices, contracts, and more. In addition, we will review, draft, and/or analyze real estate sales agreements and any other contracts necessary for the sale.
Contact a Commercial Real Estate Attorney in Wisconsin Today
Selling commercial real estate in Wisconsin is a complex process. So much time, effort, and other resources are put into it that you want to get it right. Delays or mistakes can lead to problems, and problems can lead to a breakdown in the negotiation and closing process.
At Heritage Law Office, our real estate lawyer based in Wisconsin provides legal counsel to individuals and businesses in commercial real estate transactions. Whether you are an experienced real estate developer or a first-time buyer, we will protect your rights and represent your interests. Contact us today by filling out our online form or calling us at 414-253-8500 to schedule a free consultation.
Frequently Asked Questions (FAQ)
1. What is commercial real estate?
Commercial real estate, often abbreviated as CRE, refers to any property used primarily for business purposes, as opposed to residential use. This can include retail buildings, office spaces, warehouses, and more. It's crucial to understand that selling or buying commercial real estate often involves higher stakes due to higher prices and more complex legal and financial considerations.
2. How can I determine the selling price for my commercial property?
Determining the selling price for a commercial property takes into consideration several factors such as the property's value, the existence of any liens that need to be settled before or at closing, and the value of any associated business. It's often advisable to leave some room for negotiation when setting the listing price. You may want to engage the services of a real estate professional or appraiser to get an accurate property valuation.
3. What is a purchase agreement in commercial real estate transactions?
A purchase agreement in commercial real estate is a legal document that outlines the terms and conditions agreed upon by the seller and buyer. It includes details such as the property price, closing date, contingencies, and obligations that each party must fulfill. It's highly recommended that each party has its own lawyer to prepare and review the agreement.
4. What are the seller's obligations at closing?
The seller is usually required to execute certain documents to complete the closing process. These include the deed and closing statement, as well as any other documentation required by the jurisdiction, such as national, state, municipal, and local requirements. It's advisable for sellers to have their attorney review these documents to ensure they fully understand their implications.
5. How are existing liens handled in commercial real estate transactions?
Paying off existing liens is a critical part of the closing process. Although the closing agent typically handles the actual payoff, the seller must ensure that the agreed-upon selling price covers any liens on the property, as well as any other associated fees. These may include amounts owed to real estate agents, the closing agent, and even taxes.