The importance of preapproval in commercial property deals

Only 30 percent of commercial real estate purchases around the country are made in cash according to the 2017 Commercial Real Estate Lending Trends Survey. As a general rule, it is important that buyers have financing in place before making an offer on a Missouri property. This is because a seller will feel more confident about completing a deal with someone who is more likely to follow through with the purchase.

Getting preapproved for a loan generally means going through a thorough vetting process. Those who are going to own or manage at least 20 percent of the property will have to divulge information such as their net worth and income. A lender will also look at a buyer or manager’s ownership history and personal credit score. If a group is buying a property, each person in that group will need to pass muster. In some cases, a person may need to be removed from a group to help it obtain financing.

Once a seller knows that a buyer can afford to purchase the property, the seller’s representatives will divulge more information about it. This will help the broker determine if financing should be extended and which lender will take the deal. Assuming that the buyer provided accurate information, the final step in approving the deal is a physical inspection of the property.

Individuals or groups of people who are looking to buy a commercial property will generally need to submit a variety of documents to do so. These documents may include tax, credit and other personal information. An attorney can often gather those documents and review them in advance of their submission. This may help the loan process move in a timely manner, which may play a role in the deal being completed.

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Our condo association was faced with monumental construction issues thanks to the original developer of our complex. We were cash poor and in no position to get legal representation without a contingency fee arrangement. Luckily for us, Scott Long and Burke Robinson were willing to take us on as clients. Their work ethic, professionalism and knowledge of condominium construction served our association very well. Any association would be well served in hiring these gentlemen to represent them.

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