Purchasing commercial property is quite different than residential property. Some real estate agents specialize in this type of transaction after becoming trained in the various characteristics that are inherent in commercial transactions. One of the most important facets of the commercial property purchase is performing due diligence.
Due diligence is a fact-gathering process intended to ascertain if a property is truly suited not only to its intended use but that there are no adverse conditions that would affect its value. Below are a few of the items that would be part of a due diligence investigation and clues on how to go about getting the information.
Sales & Ownership Data - Information can be obtained by the tax assessor regarding current ownership and historical information. It can be helpful to review the previous sales transaction on the property.
Utility Information - Utility information is necessary when looking to buy development land to ascertain if the public services are sufficient to support a development. Maps can be obtained showing everything from manhole covers to hydrants.
Zoning - Another important aspect when considering a property for development since zoning regulations will dictate what can and cannot be built on a site. Zoning can sometimes be changed but this can be a lengthy and expensive endeavor. The zoning office will be glad to provide the information you need.
Proposed Infrastructure - Check with the planning department regarding any proposed plans that may affect the property. Better to find out you will lose 20 feet to a new highway in 5 years while in due diligence than to find out after you own the property. These are just a few of the considerations for performing due diligence. It is a complex process that must be done carefully yet timely as contract are written with a set period of time in which to be able to cancel due to an issue that comes up during due diligence.