How Does a Commercial Real Estate Loan Work?
Financing your commercial real estate purchase can be daunting, but it doesn’t have to be. At NonBank Lender we educate our clients to ensure they understand the process from start to finish. Knowledge takes the guesswork and uncertainty out of the process of obtaining a commercial real estate loan. Below is a quick review of the major topics NonBank Lender covers when schooling our clients about How a Commercial Real Estate Loan works:
1. Find a Commercial Real Estate Broker
A Commercial Real Estate Broker is a vital ally in developing an accurate picture of the property that will best suit your needs. Additionally, they are your advocate and expert in the local commercial real estate market. As you will learn by reading further, it takes a community to properly navigate the steps involved in purchasing and financing commercial real estate. If you do not have a good Commercial Real Estate Broker, give us a call and we will make a recommendation.
2. Locate a property that fits your needs
This is where a good Commercial Real Estate Broker makes a huge difference. A good broker will be able to listen to what you are looking for, and provide great options until you find a property that you can call a home for you business. It is very important to be both selective and critical at this stage. There are often many options so it is not necessary to select the first property that fits your needs.
3. Go into contract on the property
After you and your broker have found the right property, make an offer. Your Commercial Real Estate Broker will take care of drafting the Offer and ensure that within it any special conditions like contingencies for Financing, Environmental Review, Appraisal Review are sufficiently provided for before any deposit becomes non-refundable. Once your offer is accepted and the Purchase and Sale Contract is executed the clock begins and you need to get to work. Typically, there is 45 to 60 days provided for you to complete the steps involved in obtaining a Commercial Real Estate Loan before any deposit is at risk.
4. Get approved financing with your lender
Even thought is step is listed as number 4 it is important to be working with NonBank Lender throughout the process of finding that perfect property. By working in this parallel fashion you provide the greatest amount of time possible to complete the Commercial Real Estate Loan Process. In most cases, NonBankLender can obtain a full approval within 72 hours of receiving a complete credit file. Many borrowers have worked with NonBank Lender to get preapproved so that they can strengthen their offers on properties by including that preapproval. It makes sense that Seller’s would appreciate the fact that the proposed buyer already has financing in place. At NonBank Lender we love Borrower’s who take control of their project and truly take the guesswork and uncertainty out of the process.
5. Close on the property, and get your keys
Your lender will work with the chosen Escrow and Title Company to coordinate the closing process. All you have to do is show up with your down payment, and sign the loan documents. Recording usually takes place within 24 hours of your confirmed deposit. Once Recording is confirmed the building belongs to you. Congratulations you have the joined the ranks of commercial real estate owners and have successfully navigated the Commercial Real Estate Loan Process.