CHAPTER 23 Escrow
After you’ve made an agreement and signed the deal, there is still plenty of work to do. It’s a long process that can feel like a full- time job. That’s why you have to have an agent. That is going to show during the closing period. Closing can take anywhere from a few weeks to a few months. It can get very overwhelming. Commercial real estate offers fewer protections for buyers than residential, and closing usually takes longer as well. Just as when someone buys a residential home, escrow takes place after the deal is agreed on. Escrow means a neutral third party holds the payment in a neutral account until each of the agreements of the escrow terms are met. If not, one party could pull out of the deal. This period was created to solve the trust problem between two parties. The money won’t get to the other side of the deal until both sides have filled their obligations. Many residential sales also have an informal escrow period or process. But in commercial real estate, the amount of money changing hands is much much bigger. Naturally, the escrow is controlled more tightly and done formally. Plus, the money can come from a few different sources, making this period more important. Sometimes commercial deals are less regulated than residential deals, so in this period the buyer has to do deep due diligence to protect their investment. Paperwork is very detailed and very 140
Powered by FlippingBook