Closing process commercial property
I am kindly asking this community if they could explain the closing process in important factors to note.

I am currently under contract with commercial property that I have examined and have decided the integrity will suffice. I would like to move forward but as a first time commercial real estate buyer I am nervous and unsure how to move forward. I have the option of hiring an attorney for $1,200 but my experience with attorneys in the past has been they don't do as much work as the money they charge.

I understand I need to get a title search
are there any other issues that I may come in contact with?
[{"id": "fiogyrx", "text": "I don't know the scope of your deal, but I will always hire an attorney to handle the purchase agreement.  They can be complex and you need an attorney on your side for it.  I use the same attorney to assist me in the due diligence phase as well.  You have dozens of leases to review for instance; need to make sure as buyer you understand the leases.  Make sure no unusual clauses, maybe a termination clause to examine.  Need to review all the existing vendor contracts too.  Make sure you not stuck with a crummy contract post close.  Estoppel certificates are needed as well.  Nice to have attorney draft those.  You could probably do this stuff yourself mind you, but again does not hurt to consult attorney they have been crucial to me to get through many deals.", "replies": [{"id": "fiokjth", "text": "Thanks for the good answer mate. I used one for the purchase agreement .. but when he explained what his role would be in the due diligence phase I was turned off.. I do not want to hire an attorney for no reason ..\n\nAs long as the deed is clean without liens, vendor contracts, etc I should be okay?\n\nThe property has been looked over physically and I want to move forward", "replies": [], "depth": 2}], "depth": 1}, {"id": "fioh4xk", "text": "$1200 for a proper attorney is a steal. I couldn't usually get a proper lawyer to do a lease deal for double that.\n\nI think from the sounds of it you're underestimating your due diligence. I'd recommend spending the right amount of money to get an experienced lawyer or a broker in your corner, especially if this is your first commercial deal. The proper due diligence checklist for a commercial property can easily be 100 long.", "replies": [{"id": "fioksne", "text": "What would a lawyer's role be in the due diligence process?\n\nI used a lawyer for the purchase agreement portion and when I asked my lawyer what he will do for the due diligence portion he explained he would monitor the the dates and he also said that Hewitt he would recommend me that certain things make sure the phase one make sure to get a phase 1 inspection..\n\nSo I was a little disheartened and now I'm at the closing phase I'd say and I don't want to waste any money but I also don't want to be foolish and save $1,000 to have a disaster happen\n\nMy question is as long as the deed or the title is clean without lead liens or any problems I should be okay yes?", "replies": [{"id": "fiomnl9", "text": "I would find a lawyer that's very experienced with real estate transactions. Look for a senior partner that just focuses on real estate - not some notary like conveyancing lawyer. Your lawyer, if used right, should be putting up more roadblocks than necessary in terms of pointing out due diligence holes and possible risks. Just don't let them scuttle a good deal.\n\n&amp;#x200B;\n\nAlternatively, hire a broker who's competent and honest.\n\n&amp;#x200B;\n\nBut from the sounds of it you might have already entered into a binding agreement. In which case your options are probably limited. But in any case you should be having your own lawyer review any paperwork that's coming from the seller's lawyer rather than believe the vendor's lawyer somehow has your best interests at heart (they don't).", "replies": [], "depth": 3}, {"id": "fipax6v", "text": "Attorneys don't just help you review what is in the contract. They have the expertise to realize what may NOT be in it that needs to be. Or maybe the seller shifted various things that are typically an obligation of the seller to an obligation of the buyer.\n\nWhen the bank tells you that they want you to sign an environmental indemnity that is in force for 5 years after your loan is repaid, is that a market request? Or is the bank trying to stick you?\n\nBorrowers counsel for $1200 is a steal. Know that if the loan is big enough you also pay for the banks attorneys\n\nI could sit here all night rattling off questions you would want an experienced attorney to help you answer.\n\nHow much money are we talking about?", "replies": [{"id": "fipc69v", "text": "Got an Amazon loan and paying cash ... No commercial mortgage. Thank Jesus Christ and the holy spirit (. \u275b \u1d17 \u275b.)", "replies": [{"id": "fipcatc", "text": "An Amazon loan? Never heard of this. Also the size of the deal will influence the amount of lawyer involvement", "replies": [{"id": "fiq4d8z", "text": "Half mill", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fioh9cr", "text": "Get an attorney who does commercial real estate transactions. \n\nThings you and your attorney will want to do:\n\n\\- Phase I environmental (at a minimum) \n\n\\- Tank sweep\n\n\\- FOIA/OPRA request to the township/city for open permits and code/zoning violations\n\n\\- Title rundown\n\n&amp;#x200B;\n\nThere will be state specific requirements that your attorney will help you with. NJ has a bulk sales requirement where a certain amount of money must go into escrow until the state figures out if any of the entities involved in the sale owe money to the state for any reason. A good attorney is worth the money but don't just grab anyone out of the phone book. Get someone who does real estate law.", "replies": [{"id": "fiol6pp", "text": "Thanks for the reply the foia and opra request seem interesting but the phase one in tank sweep I'm not interested in because my property that I'm purchasing is very small and I just don't feel it's a it's a problem and there's never been any kind of hazardous waste dumping from my knowledge from the previous tenants\n\nSo it seems a title search is prudent is there anything else or real estate lawyer can assist me with I used one in the purchase agreement and I just don't want to hemorrhage anymore money", "replies": [{"id": "fiq9w7w", "text": "It's obviously up to you but I would never buy a commercial property without environmental due diligence. It's a massive risk. We went under contract for a small commercial building in 2018. It was owned by an antique book dealer. He had been storing old books in it for 35+ years. We brought in our environmental engineer and he did a Phase I. Turns out original use was a chemical laboratory for a mining company. Site walk-through found pipes throughout that led outside. Turns out most of the chemicals were poured down drains that went to a dry well outside. Some borings revealed tons of VOCs, PCB, etc. Really bad stuff. Remediation was estimated at $500k-$1M. We were under contract for $500k. We walked when owner said he wouldn't remediate. I have also found a leaky tank AFTER a purchase. $250k cleanup of soil contaminated with heating oil.\n\nDue diligence and legal fees are part of the deal in commercial real estate. If you can't afford the property with those things included, you probably can't afford the property.", "replies": [{"id": "fiqylbq", "text": "Thanks", "replies": [], "depth": 4}, {"id": "fj2d0vx", "text": "Right, you never know.  Here in Florida, former orange groves can be contaminated with a certain agricultural chemical that literally never goes away.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fj2cxcm", "text": "Dude, you need to think about not just your ownership of the property but how you would eventually sell it.  In my area, you can get a Phase 1 environmental for under $2000, very cheap insurance. if you want to sell the property 20 years down the road and the buyer discovers contamination, you could be stuck.  \n\nI didn't read all of the other comments, but you also need a survey.  If the seller had the property surveyed in the last several years, you can possibly get an update from the same surveyor inexpensively.  Without a survey, you will not know what you truly own and how your property is accessed.  I have seen properties with frontage on a main road that did not have legal access from that road.  Also, adjacent property owners could have easements across that land you are unaware of.\n\nThe other thing to look at is ZONING, no matter what the current or past land use is or surrounding land uses.  I could tell a lot of stories about land purchasers and landowners getting screwed up over zoning.  Contact the planning office of the municipality and request a letter confirming the current zoning and comprehensive plan designation.  You will pay a small fee, but well worth it. Also get a copy of the regulations for those zoning and comp plan designations.  You say the property is small.  If it is vacant, it's possible that it is too small to be buildable for the setbacks greatly limit the size of structure that may be placed there.\n\nI also encourage you to find a cost effective but sharp commercial real estate attorney, perhaps a small or solo practice.  If you're spending a few hundred thou on a commercial property, a couple thousand in legal fees is well worth it.", "replies": [{"id": "fj2w2d4", "text": "Great answer thank you so much", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fiokhwb", "text": "I can't think of a single real estate transaction for which it would be prudent to not use an attorney.\n\nWhat have your negative experiences been with attorneys if you're a first time buyer?\n\nAre you currently negotiating the PSA against the sellers attorneys by yourself?\n\nSome commercial DD that needs to be performed:\n\n* order title insurance\n* negotiate exceptions with seller, title agent\n* order survey\n* clear loan commitment conditions\n* final inspection", "replies": [], "depth": 1}, {"id": "fiol3ly", "text": "Use a broker! I do work on an advisory basis. My rate ranges from $400 - 500 an hour. You shouldn't be nervous about closing as all material items that could have financial implications should have been sorted out and determined during your due diligence (example - if you do an Esa and determine remidiation is required u try to reduce the price accordingly). DM me n we can set up a call to discuss if you're interested.", "replies": [{"id": "fipb338", "text": "/s? You can hire a CRE attorney with 30 years experience for that rate (non gateway markets)", "replies": [{"id": "fipejgs", "text": "Brokerage and law exist as 2 separate industries for a reason. A lawyer can tell u what is typical /how to deal w documentation etc from a legal perspective. \n\nA broker will give u the ability to negotiate better deal terms / current market comps for similar product /current market caps / what u can push on etc etc based on experience and their knowledge about what the current market dictates.. If it's too late in the process to use my services in you negotiation and compensate me via the transaction I can still add value after the fact. I am def worth it.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fipcoj7", "text": "Are you getting a loan for the property? The closing process is totally different if another party (especially a bank) is involved. \n\nEither way, a prudent investor will still go through some of the bank required steps even if a bank isn\u2019t involved. Why? A property with some inherent defect only acceptable to cash buyers severely limits the property\u2019s future sale potential.", "replies": [{"id": "fiq4f8z", "text": "Thank you for the good reply this is not being financed through bank but I will do my on research on Bank financed commercial property deals to investigate", "replies": [], "depth": 2}], "depth": 1}, {"id": "fiwbqz1", "text": "Absolutely get a Phase I.  You can get fucked big time down the road if something ever comes up.\n\nLike 50 years from now they could determine that this property had some sort of environmental spill from a gas truck and you\u2019ll be found as a responsible party that has liability for clean up and damages.  Spend the $2,500 for the clean phase I.", "replies": [], "depth": 1}]