If you have previously rented office accommodation in a city centre location, you may have been reasonably happy with this arrangement up until now. However, you want to expand your operation and may also want to take control of your expenses, so you may be looking to buy a piece of property instead. This will allow you to sublet part of the building while using a prime portion for your operation, and you may even be able to 'name' the building for your own branding purposes. Still, you've never been involved in a commercial transaction like this before, so what do you need to know?
This type of transaction can be quite complex depending on the configuration of the building, zoning restriction, access issues and other matters. For this reason, it's important to work with a property conveyancing expert to ensure that you do not make any missteps.
This type of transaction will typically go through several different phases. Once you have agreed to the basic terms with the seller, you will then need to draw up a provisional contract of sale. This will include all the details of the property, the price agreed, any warranties in place and a variety of different terms and conditions. Both sides will need to negotiate some of the details before the contract can be signed, and once it has been exchanged, you will need to pay a deposit.
Check to see whether your state or territory allows you to enjoy a 'cooling off' period here, as some do but others don't. If you do have this amount of time to reflect, then you may be able to withdraw from the contract but may need to pay a small percentage of the purchase price as a penalty.
It's not unusual for a variety of different conditions to be attached to a sales contract and for the contract to be void unless those conditions are addressed. The next phase will typically involve due diligence and a search of local records to see if a property is as described, is not encumbered and is zoned for your type of operation. If any issues are found at this stage, then you are under no obligation to proceed.
Finance in Place
While all this is going on, you can finalise your details with a bank or lender, subject to a successful search. They may want to do their own analysis as well to determine if the property is worth the purchase price so that their funds are not at risk.
A specific date and time will be set aside for the act of settlement, where buyer, seller and lender come together to exchange documents. The balance of the purchase price will be paid, the fees will be settled and the insurance risk will then pass from the seller to the buyer.
It is highly likely that the seller will retain a competent attorney on their side, and you will need to get a professional in property conveyancing to help you.Share