Why is it necessary to have a separate real estate purchase contract, when escrow instructions usually seem to be enough?
• What should be in a real estate purchase contract? • Does “as is” mean “as is”? • If I am buying real property for my business, do I need to get an environmental site assessment? • What is a 1031 exchange and why do I care? Q: What exactly is commercial real estate? A: Broadly defined, the term “commercial real estate” can be used to refer to any dealing with real property in a business context. It could involve leasing out office space, owning an apartment complex, or selling real property along with and as part of the sale of a business. It might be industrial or agricultural property. It could even involve residential properties like apartment complexes or rental houses being held for business or income-producing purposes. It can even involve working with the government. Unless the property is a residence where the homeowner is living, you are probably dealing with commercial real estate. Return to index . . . Q: Are there really that many differences between a commercial real est
Amazingly enough, it is perhaps all too common for parties to close a commercial deal without having a formal real estate purchase contract in place. They can shake hands on a deal, show up at an escrow company and tell an escrow officer what they want to do. The escrow officer can then draft instructions for the parties to sign and they can proceed to close the deal. But it can become painfully clear that relying solely on escrow instructions is never the best way to do a deal. Among the things to take into account are: • Escrow instructions are prepared primarily for the benefit of the escrow holder and not any of the parties to the transaction. They typically contain language that tries to absolve the escrow company of any liability. If something goes wrong, it’s pretty hard to hold the escrow company responsible. • Conditions that may excuse performance by one party or the other aren’t likely to be spelled out clearly. A dispute is more likely to arise if problems come up with resp
