Steps Involved in Buying a Commercial Property
The property market may have had its up and downs, but it is still a stable industry to invest in. Many businesses, even start-ups want to own a property for commercial use. In fact, around eight of all properties across the UK are commercial. This accounts for a total value of £683bn.
If you are in the market to buy a commercial property, how do you go about the process seamlessly?
Finding the right property to buy
Finding the right property means proper timing. There are times when property prices are high, and it is not ideal to consider buying a commercial property when the market is at its peak. You need to keep track of the trends that affect property prices. If possible, hire a property consultant firm to help navigate through these complexities.
Working out the cost of buying a property
The primary consideration when buying a commercial property is to make sure that you have a sufficient deposit allotted. In addition to this, you also need to take into consideration additional costs which may include the following:
- Stamp duty and land tax
- If applicable, you may need to pay VAT on the property
- Fees charged for a commercial mortgage arrangement
- Refurbishment and repairs
- Facilities, equipment, and furniture
Once you have bought the property, additional costs will also accrue which are not limited to maintenance and utilities.
Securing a business loan
The most common financing option to acquire a commercial property is to apply for a commercial mortgage. Since the market has already stabilised, borrowers have a variety of lending sources that are capable of funding a commercial mortgage. You can either go to a bank or look for alternative financing.
Putting in an offer on a commercial property for sale
After you have found the property you want to purchase, the next step is to put in an offer to the estate agent handling the sale. In instances when you receive an initial decline, you can always proceed with negotiation to reach agreeable terms. If your offer has been accepted, don’t forget to request the estate agent to remove the property from listings to prevent possible counteroffers from other interested parties.
Completing the sale by exchanging contracts
The final step to acquiring a commercial property is to proceed with finalising the details of the contract. You may need the services of a solicitor to smoothen out all the possible concerns which may arise in the agreement. You may ask the solicitor to include an exclusivity agreement. It pertains to a lock-out period where the seller is not allowed to further negotiate with other buyers.
One of the final steps before contracts are exchanged and signed is to conduct a survey of the property to ensure that there are no hidden problems or concerns which may not have been accounted for in the contract.
When both parties are satisfied with the contract, the sale can proceed and be finalised. After this step, the sale of the commercial property can be legally recognised.