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The myriad steps to close a commercial real estate deal – Press Telegram

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Today I focus on the closing process for commercial real estate transactions. After all, it was foresight because I wrote this post before Labor Day weekend.

Regardless of whether you as an investor or resident depend on the rent earned or the ancillary costs of your business, you go through a similar process in order to become an owner. Let’s dive.

We search, select candidates to buy and start negotiations. With the clarification of the purchase conditions between buyer and seller, the contact purchase contract is concluded. This part is relatively easy. Now the fun begins. Buyer and seller now need to complete the transaction. What happens after a document is signed is the subject of this column.

Purchase and sale contracts, whether standard or proprietary, provide a roadmap for how to proceed. Pricing, financing, due diligence if any, trustees, ownership companies, start-up deposits, post-contingency security deposits and notice periods are all in a niche.

Price. It’s pretty simple, but it’s usually a combination of cash and debt. The seller receives all revenue unless he offers a loan. After entering the certificate, there are fewer closing costs. Can this amount deviate from the agreed amount? Yes sir. See due diligence.

Financing. Many of the transactions we see these days have been funded but do not require approval from the lender. confusing? Yes sir. But this seller market that we are plagued with created that fold. The seller can say, “Sure, buyer, I’ll take out the loan. However, if you don’t qualify, you won’t be able to quit. And if the lender is late – tacos. “

In a more general approach, the buyer seeks credit income combined with their cash injection to make a purchase. If she cannot get the loan, she will leave and her deposit will be refunded.

Crooked. Generally, California trusts are information centers for contract acceptance and symphony conducting. This is also known as running a transaction. Deposits, documents, and closing instructions are all neatly incorporated into the escrow owner’s job.

Title. Most title companies also have an escrow department, but in many cases these two functions are separate. The title clerk prepares a preliminary title report at the beginning of the transaction. This shows loans, easements, liens, property tax payments, legal statements and other “exceptions” that the seller must repay. A commitment is made to guarantee a clean title. If there is a problem, it will be covered after closing it.

Down payment to open the escrow account. There are no actual standards in trade. It’s everything buyers and sellers negotiate. However, these usually bear around 3% of the purchase price. In most cases the deposit will be refunded if the buyer does not continue with the purchase and decides before the event is exempt.

due diligence. It is also known as an “unforeseen event” and lasts between 15 and 90 days, with a lot of work to be done. Securing funding, approving property exemptions, performing building inspections (roofs, electricity, HVAC, etc.), preparing deeds of ownership, analyzing tenant financial aspects (if any), environmental hygiene needs to be diagnosed. Ouch! Within each of the main categories of admission there is a checkpoint that guides us at the end.

Financing includes, for example, buyers, tenant loans, assessments, environmental reports, and lender approval. There are many things to do in a short period of time. What if something is not approved? Dear Readers, that is the subject of another column.

Deposits after release from contingent liabilities. You travel the gauntlet of unforeseen circumstances and move forward at full speed. Next, add a “skin” with an increased amount to the escrow account. By the way, purchases generally require down payments. However, if you nod, the deposit will not be refunded. Can you still cancel? Of course. But it’s not free.

close. A chord dissonance completes the transaction. Like a group photo at a family reunion, everyone has to look at the camera and smile before taking the picture. The lender finances the loan and the buyer adds additional dollars, deposits and posts the certificate, and assigns the money. The seller gets it, the buyer gets the title, the lender gets the trust deed, and the broker gets the commission. Boom!

Allen C. Buchanan of SIOR is a director of Orange Lee & Associates Commercial Real Estate Services. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

The countless steps to concluding a commercial real estate deal – press telegram source link The countless steps to concluding a commercial real estate deal – press telegram

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Unflattering audit of San Diego real estate deals prompts push-back from city attorney

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A July report by the San Diego auditor investigating the city’s Ash Street lease and other real estate transactions appears to have driven a wedge between the elected city attorney and the appointed auditor.

A new memo from auditor Andy Hanau states that prosecutor Mara Elliott rejected several invitations to participate in the month-long review of real estate transactions and then criticized Hanau for not interviewing her before his report was published.

“We met at least seven times with representatives of the public prosecutor’s office during the examination,” Hanau wrote in the message last Thursday. “No one in the prosecution stated that we had a reason to question the city attorney, or that the city attorney wanted an interview.”

The auditor’s memo was in response to Elliott’s official rebuttal of the audit published two months ago, which harshly criticized the way city officials have handled a number of real estate transactions in recent years.

In her refutation of the August 31st audit, Elliott reiterated her criticism of the July 22nd audit as an incomplete review. She said the legal conclusions were wrong and the assessment was based on speculation rather than fact.

“I spent nearly two decades of my legal career advising state auditors and audit boards on their roles and responsibilities in the San Diego County and City of San Diego,” Elliott wrote. “This failure to obtain complete information resulted in inaccuracies in the audit report.”

The prosecution issued a similar response to the exam when it was first published.

The city council’s audit committee is due to look into Elliott’s rebuttal along with a subsequent response from Mayor Todd Gloria at its Wednesday meeting on the audit.

Gloria’s rebuttal suggested that the mayor’s office would implement any recommendations made by the auditor under his control, although implementation will take several months or even until 2023.

“The department intends to create a robust and enduring policy that will regulate real estate transactions of many types,” wrote Chief Operating Officer Jay Goldstone to Hanau on September 7th. “The revised guideline will serve as a guideline and instrument for the city council and city administration to comply with, even if no concrete transactions are envisaged today.”

Hanau’s July 22 report found that former Mayor Kevin Faulconer and his staff withheld information and misrepresented some facts when they approved the council for the 20-year lease for the former Sempra Energy headquarters at 101 Ash in 2016 St.

“The former city administration has limited the supervisory capacity of the city council in large property purchases by not providing complete and accurate information,” the audit said.

The auditors also criticized other real estate investments made under the Faulconer administration, including a failed indoor skydiving facility that the city bought for $ 7 million without a valuation and a repair yard that was $ 8 million more than expected had improved.

Elliott, who is now trying to suspend the Ash Street lease and an earlier contract for the nearby Civic Center Plaza, said the Court of Auditors’ office mistakenly blamed her for the prosecutor’s legal work prior to her 2016 election.

Her rebuttal also criticized the audit for saying it was her office’s failure to spot “red flags” on the Ash Street transaction that cost the city at least $ 60 million for a 19-story skyscraper. that cannot be safely occupied due to asbestos and other topics.

“We have to rely on experts. And those with expertise report to a different branch of government – the executive, ”wrote Elliott. “The lawyers have to rely on facts presented by the city officials.”

The dispute over the auditor’s audit is not the first dispute between the audit office and the city’s public prosecutor’s office.

Last year, then-acting city auditor Kyle Elser applied for permission to hire an independent attorney for his office. Sometimes there are conflicts of interest between city auditors and city attorneys, he said at the time.

Elliott has resisted the request, which relies on both the prosecutor’s office and the mayor’s human resources department to move forward.

The proposal is expected to be reintroduced by the city’s audit office later this year.

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Real estate agent appreciates mentors

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Sep 26 – In Beckley’s real estate sector, Carol Pugh is known for her dedication to clients and her knowledge and expertise.

Pugh is the agent at Sigmund-McLean & Associates on Prince Street. In 2010, she and broker Don Martin entered into a five-year buy-in plan and became co-owners of the agency.

Many in Beckley live in properties that Pugh listed, sold, co-developed, and in some cases re-listed and resold.

“I’ve got so many stories, houses I’ve sold two or three times, families I’ve met along the way,” Pugh said. “There was a lot of property.”

In the late 1970s, Pugh was the mother of two young children. She enrolled in a real estate course at Beckley College taught by local real estate agent Jim Lilly.

“It was just something I did,” she said. “I knew I liked real estate, and it was a course I took without thinking that I would actually get a real estate license.”

But in the summer of 1989 her children – she had three children now – were of school age.

“I just thought, you know, I’d like to get into the real estate business,” she said.

She enrolled in a real estate course taught by Mike Tyree.

She spent the day in class every Saturday and Sunday for the next six weeks. Next she was licensed.

“The first company I thought of that I wanted to work with was a male-dominated company,” she recalls. “Sigmund McLean Hunt and Payne.

“I’ve always respected them. They were family friends. Good, honest business people.”

Pugh said she never treated real estate as a part-time business. She went to the office every day.

The owners were great mentors, she recalls.

“They were in the office every day in a coat and tie, and I would come into the office every day and try to get their knowledge of them.”

The trio developed three sub-divisions in Beckley: Woodcrest, The Landmark and Old Mill Village, she reported.

“I loved hearing about it,” she said.

The story goes on

The agency was still selling lots on Woodcrest when Pugh joined the agency, and Pugh saw an opportunity. She teamed up with a local contractor, Howie Lambert, who was building houses in upscale Woodcrest.

“We worked together,” she said.

“I would sell him a lot. He was going to build a house and Howie would let me sell his house.

“So I learned building development.

“Woodcrest’s development was a real learning experience, watching Bill (Sigmund) and Bob (McLean) develop and even pave the roads and bring the utilities to the properties.

“I had just learned so much in development by watching builders build their homes,” she said.

“Sometimes realtors have the wrong idea what real estate agents are doing and they step in and fail to realize the work that needs to be invested and the time,” she added.

“You have to spend time with experienced real estate agents to learn the business because what you learn in your real estate course doesn’t have much to do with the real world of real estate.”

Pugh said real estate was a full-time job for her from the start.

“I was very fortunate that my family were great supporters,” she said. “My children were still in school, but I was still able to pick them up from school.

“My husband supported me a lot back then. He helped with the children.

“There was a lot of night work and weekends. That’s how I got into it.

“I’ve worked hard and the rewards have been wonderful.”

Pugh is a two-time winner of the Beckley Board of Realtors (BBR) “Realtor of the Year” (1999 and 2005) and was nominated for West Virginia for “Realtor of the Year”.

She has served as secretary to the West Virginia Real Estate Commission and twice as BBR president.

She is consistently a top producer of real estate sales in the Beckley market and is widely respected by sellers, buyers, and other real estate agents.

Her advice to others is to always be honest with customers. She said it was one of the most important things in business.

A supportive family is a help to success, Pugh added.

“There are many ups and downs,” she advised. “There is a lot of heartache.

“I’ve had some deals that I just cried about when they fell apart, buyers regretted, sellers regretted.

“If a deal fails, I live with them.”

Most of the deals were successful, however.

Pugh said she could drive through Beckley, view a property, and remember a deal.

“I do it all the time,” she said. “I wish I could go back and see everything I sold. It went quickly.

One of her mentors did the same.

“Bob McLean used to walk around town calling the homes from the original owners … by the owner’s name even though they had sold it two or three times,” she added.

Pugh’s favorite aspect of business isn’t necessarily making a big profit on an expensive property.

“I’ve sold a lot of commercial properties over my years and I love the challenge,” she said.

“But I have to say, my favorites are my first-time home buyers.

“I feel best about all of the people I’ve helped get into houses.

“They are most grateful to have their home.”

Sigmund-McLean & Associates’ business gives Pugh a sense of achievement.

“I am very proud of my company,” she said. “I am a proud owner here.

“A lot of real estate has been bought and sold in this corner of Beckley.”

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BREVARD REAL ESTATE REPORT: Listings Increase for Single-Family Homes, Median Sales Price Up 21.0% to $325,000

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new listings for condominiums are down over 2.8%

The Brevard housing market reported higher median prices, more new offers and a year-over-year increase in cash sales in August. The average sales price for Brevard single-family homes is up + 21.0% to $ 325,000, compared to $ 268,500 a year ago.

The median sales price for townhouses and condos is up 17.6% to $ 261,868, compared to last year’s $ 222,750.

BREVARD COUNTY, FLORIDA – The Brevard housing market reported higher average prices, more new listings and a year-over-year increase in cash sales in August.

“The latest data shows that the number of new offers for single-family homes here on the Space Coast continues to rise,” said Jennifer McCoy of McCoy Freeman Real Estate, which looks after the entire Space Coast of Florida.

“However, the new entries for condominiums fell by over 2.8% and the active portfolio by over 36%. This means that we are still very deep in the seller’s market area and there is still a long way to go back to a balanced market. “

The average contract term for single-family houses is 8 days, 61.9% less than in the previous year.

Single family home closed sales were up 7.9% year over year, which is impressive given the rate of home sales at that time over the past year.

However, the condominium and townhouse market remains the hotter market for now. In August, sales in this property category rose by over 11 percent compared to the previous year.

A brief summary of Brevard County’s single-family report for August 2021.

Summary of Brevard County’s Single Family Report for August 2021

■ Closed sales increased 7.9% in August 2021, with the number of closed units being 1,069 compared to 991 in August 2020, with cash sales increasing + 61.9%.

■ New pending sales increased + 3.2% and new offers increased + 23.5%.

■ The average sales price for Brevard single-family homes is up + 21.0% to $ 325,000, compared to $ 268,500 a year ago.

■ Monthly inventory levels are down -38.9% to 1.1 months, down from 1.8 months in August 2020.

■ Traditional sales are up 8.4%, with an average selling price of $ 325,000.

■ Foreclosure / REO Sales are down -33.3%, with 8 closed sales and an average sale price of $ 245,080.

■ Short sales are 0.0% with 2 closed sales in August 2021 and 2 closed sales in August 2020.

A brief summary of the Brevard County Townhouses & Condos Report for August 2021.

Summary of the Brevard County Townhouses & Condos Report for August 2021

■ Closed sales increased + 11.1% in August 2021, with the number of closed units being 300 compared to 270 in August 2020, with cash sales increasing + 21.4%.

■ New pending sales down -10.7% and new offers down -2.8%.

■ The median sales price for townhouses and condos is up 17.6% to $ 261,868, compared to $ 222,750 a year ago.

■ The supply of inventory in months decreased by -48.1% from 2.7 months in August 2020 to 1.4 months in August 2021.

■ Traditional sales are up + 10.8%, with an average selling price of $ 263,660.

■ Foreclosure / REO Sales are N / A, with 1 closed sale and an average sale price of $ 170,000.

■ Short sales are 0.0% with 1 closed sale in August 2021 and 1 closed sale in August 2020.

ABOUT THE AUTHOR

Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together, they have over 40 years of extensive experience in all aspects of the real estate industry, have sold over $ 420 million, and are among the top 1% of all Florida real estate agents.

Bobby Freeman, a lifelong resident of Brevard County, has been a top real estate agent in the area for over two decades. In his first year as an agent, Freeman received a Rising Star Award from his brokers. Since then, he has received numerous sales awards from some of the largest real estate companies in the world.

Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together, they have over 40 years of extensive experience in all aspects of the real estate industry, have sold over $ 420 million, and are among the top 1% of all Florida real estate agents.

McCoy-Freeman Group’s achievements include Certified Luxury Home Marketing Specialist (CLHMS), Certified Distressed Property Experts (CDPE), Accredited Buyer Representative (ABR), and Brevard County’s Best Real Estate Agent. The group has been featured in many news publications including CNN Money Magazine, CNNMoney.com, WFTV 9 News, News 13, WKMG News 6, Coastal Condo Living Magazine, Hot Retirement Towns Magazine, and SpaceCoastDaily.com.

CLICK HERE FOR THE LATEST NEWS FROM BREVARD COUNTY

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