CHAPTER 18 Terms to Get Familiar With amiliar With
There is a large vocabulary you need to be familiar with when buying commercial real estate, before and during your property search. Some of these terms are about the property search, to help you navigate the process. Negotiations and closing procedures have their own set of terms you need to know. Knowing these common terms in commercial real estate lets you go through the stages of the property search and communication with owners without depending on your broker to return the call. All of these terms are phrases and abbreviations you will run into at some point during or after your search. Even if you already know a handful of commercial real estate lingo, you don’t want to go into any process uninformed. Here are the key commercial real estate terms to know when buying a property.
LETTER OF INTENT F INTENT
This is what the potential buyer sends to the building’s owner when they want to submit a formal offer. It will ask for final specifics on upfront money, the timeline of the deal, and other aspects of the property. Usually, the offer is included in this letter. This can come before or after negotiations. If before, it lets the owner know you are a serious candidate and can start negotiations at that number. Owners can receive more than one letter of intent and choose the buyer that offers the most money or gets the best financing. You 106
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