Thinking About Buying A Commercial Property For The First Time?
February 12, 2018
The idea of purchasing a commercial property can be quite a daunting thought, especially if you are a first time buyer. Here at Ryder & Dutton we have a specialised Commercial Agency team who are friendly, approachable and experienced. We are able to offer advice on what you need to do before embarking on your search for the perfect property, here are some points to consider to help you get started:-
1. What do I need to do to find a suitable property?
Whilst you can input your search criteria online through a number of different portals including Rightmove Commercial, it is advisable to also speak to a member of our commercial team so that your requirement can be specifically tailored using specialist in house software to help source the right property for your business needs. We would also be able to book in any viewings of your choice and a staff member would be in attendance to run through any questions that you may have whilst at the property or following on from a viewing in the coming days.
2. What kind of commercial property do you deal with?
The most common types of commercial properties that we are instructed to sell are offices, shops, industrial units: warehouses/workshops, restaurants, pubs and churches, however we deal in any and all kinds of commercial property.
3. Is there a good time to consider purchasing a commercial property?
It’s always a good time to take that first step onto the commercial property ladder, however, we would always suggest looking at the trends in the local and national commercial property market, as well as speaking to us directly so that we can advise on local market conditions. Several things to consider would be, the value of commercial property, supply of commercial property and availability of commercial mortgages if you are not in a position to make a cash purchase.
4. When working out the costs involved to purchase a commercial property, what do I need to take into account?
· A deposit is required when contracts are exchanged to buy a commercial property, the outstanding amount is then paid when the transaction completes and monies would be transferred across to your solicitor in readiness for legal completion.
· If you require finance typically commercial mortgages are at a lower loan to value rate than residential.
· You will need assistance from a commercial estate agent, lender and obtaining solicitor quotes for the conveyancing.
· Stamp Duty Land Tax still applies if you buy a commercial property valued at more than £150,000, which is the current threshold in England & Wales
· Make enquires in the first instance as to whether the purchase is subject to VAT from the outset as this can have a bearing on the offer you put forward, particularly if you are not VAT registered.
· Fees involved with organising a commercial mortgage if required
· Decorating and refurbishing the commercial property
· Buying and fitting out the space with any furniture and equipment
· Hiring a removal firm to help transport furniture and equipment
· Setting up facilities, including establishing IT
· Establishing whether there are any business rates payable by making enquiries with the local authority
5. Once I have found the right property and been along to a viewing what do I need to do next?
Speak to the marketing agent and make a verbal or written offer. If your offer is accepted you will need to provide proof of funds to the agent as evidence that you are in a position to proceed.
If the vendor refuses the offer it is usually down to the fact that they will have a number of different things to consider. If this is the case it is worth making an offer and trying to negotiate, which the agent can do on your behalf to reach a mutually acceptable figure for both parties.
6. What happens once my offer is accepted?
You will need to obtain quotes and instruct a solicitor of your choice to undertake the legal work for you. The estate agent will drawn up the memorandum of sale which is then circulated to the vendor, buyer and both sets of solicitors, this document details the main points of the sale agreed including how the purchase will be financed, any special conditions and idea on timescales.
Contracts will be exchanged when both parties are happy with the contract and you are also happy with the condition of the commercial property. You will also need to make sure that the finance to do the deal has been raised and will be available in time for completion.
If you would like to discuss your commercial requirement in more detail or would like any further information in relation to any of the subject matters we have discussed throughout this blog, then please contact our commercial department on 0161 925 3232.