Common Commercial Real Estate Contract Contingencies

Just like residential real estate contracts, Dallas commercial real estate contracts have their share of contingencies. In short, contingencies are found in most real estate contracts and are essentially escape clauses for both the buyer and the seller.

Each party wants to make sure they are protected in the real estate contract, so real estate contingencies are a common occurrence. They often make the contract much easier to handle for both the buyer and the seller, as it provides them with an opportunity to back out of the contract for a number of reasons.

Although both residential and Dallas commercial real estate contracts both have contingencies, the contingencies themselves are quite a bit different. The following list details some of the common contingencies found in Dallas commercial real estate contracts:

When purchasing a parcel of land for Dallas commercial real estate, the contract may be subject to the approval of the buyers attorney. Because Dallas commercial real estate contracts may be decidedly more in depth than residential real estate contracts, waiting on the approval of your attorney when buying Dallas commercial real estate is quite common. It is also common to have a contingency that is based on a business professionals partner or investor, as it is important to get approval from everyone involved before the contract is finalized.

Many commercial real estate contracts include contingencies that are based on financing approval for the buyer. For tracts of land, this contingency may include approval of a legal survey, if one has not already been done. In addition, a buyer will likely want to include in the purchase agreement some language about obtaining necessary permits and zoning for the commercial property.

When speaking of commercial tracts of land, there may be a contingency with verbiage regarding liens on the property. In particular, the purchase of the land will be contingent on no environmental cleanup liens.

It is common to have a contingency based on: the buyer achieving a loan of at least 75 percent of the purchase price of the Dallas commercial real estate property; the buyer being satisfied with the inspectors report; and the buyer being satisfied that the property can be remodeled or renovated to his or her satisfaction. In other words, the buyer will likely include a series of contingencies based on the use of the commercial property and how it can and cannot be used.

The use of a realtor qualified in commercial real estate is crucial, as he or she will be able to guide you when making a commercial real estate transaction. Real estate companies, like VIP Realty, have a plethora of highly qualified and experienced realtors who have extensive experience in dealing with commercial real estate contracts. It is important to never enter into any type of real estate purchase agreement, whether residential or commercial, without advice from a trusted realtor and real estate attorney, as they will be able to best protect your interest in the real estate transaction.

Real Estate 101: Common Real Estate Terms

Finding a new luxury homes in AZis no easy task. With the industry becoming more in tune with its market and real estate agents getting hasty over the buy and sell business, it's a must to keep oneself familiar with the common words used in the trade.

If the sign "House for Sale in South Arizona" catches your attention, your next step is probably to turn to a real estate broker. Of course, you don't want to appear clueless and confused when your agent starts to spew out words like "claim," "closing costs," "Escrow," or even "ingress" and "egress" in the middle of a money-property negotiation. Being informed is the least thing that you can do to successfully beat the deal.

Dorn Homes, one of the leading new home builders in AZ, lists some of the most commonly used terms in the real estate industry:

Amortization. It is the process of paying off a loan or an existing debt by making regular partial payments of principal and interest rate over an agreed period of time.
Annual Percentage Rate (APR). In mortgage loan, it refers to the interest rate incurred for a whole year. It is calculated based on a government formula and expressed in percentage.
Balloon Payment. The final large sum of payment due at the end of a mortgage.
Certificate of Title. A document executed by an attorney stipulating the status and description of personal or real property. It serves as an evidence of one's ownership of a property.
Down Payment. Type of partial payment (in cash) that the buyer gives during the onset of a purchase of a good, service or property.
Equity. The current market value of a home minus the outstanding mortgage balance. Home equity is essentially the amount of ownership that has been built up by the holder of the mortgage through payments and appreciation. (www.investorwords.com)
FHA Loan. Type of federal assistance insured by the Federal Housing Administration and made by an approved lender. (www.homeclosing101.com)
Fixed-rate Mortgage. A loan that has a fixed interest rate and remains constant throughout the life of the loan.
Ingress. Right or permission to enter a place or property.
Tenant. One who holds possession of a land or a real estate; a person or a dweller who pays the rent of a house or an apartment.

While this article is intended to provide matter-of-fact and simplified definition of each term, this page may not be sufficient or 100 percent applicable in all jurisdictions. Dorn Homes provides these definitions for general purposes only to help prospective clients in searching for new custom homes in Arizona.

As the most recognized among Arizona custom home builders, Dorn builds only stylish, comfortable, convenient, and energy efficient homes that satisfy and even exceed clients' expectations.