Expediting the Contract Process in Commercial Real Estate Transactions
Commercial Real Estate (CRE) used for business purposes and Residential Real Estate (RRE) used for dwelling purposes are the two real estate property categories. Commercial Real Estate is further divided into other classes depending on the use of the property, e.g., office space; industrial; multi-family rentals, retail, and hospitality. The main benefit enjoyed by owners of Commercial Real Estate is a good and steady income. In contrast, the main disadvantages are costly acquisitions, complex processes, and numerous regulations that make it time and labor-intensive.
The Commercial Real Estate Transactions process comprises of the pre-contract, contract, and contract completion period, respectively. The pre-contract period involves due diligence by the parties, the preferred property is identified, parties engage in negotiations (correspondence, bidding, and buyer’s interviews that result in a deal award), investigation of title through analyzing title documents, property visits, and acquiring relevant approvals.
The contract process is relatively straightforward if the intention of the parties does not waiver. It involves drafting, perusals, and amendments, and the main document is the purchase and sale agreement signed by the parties. It is, however, essential to note that the contract stage is dependent on the pre-contract stage; therefore, the pre-contract stage must be expedited first.
This may be done by reducing the aforenamed costs, processes, regulations, and technicalities and making any resources needed to expedite the process readily available, e.g., relevant information such as market research, flexible financing, and qualified stakeholders such as skilled attorneys. We are, however, alive to the fact that industry has salient features necessitating regulations; it generates revenue to the tune of trillions. Reducing the technicalities will be inadequate; the primary solution will be through the effective use of technology for time efficiency and output quality. Human error will be significantly averted.
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