Once your pre-acquisition planning is in place and you’ve identified the right commercial property, it’s time to move into the offer, negotiation and contract phases. This is where deals are won (or lost) depending on how carefully the paperwork is crafted and negotiated.

Here’s what to expect as you close in on a commercial investment property in Florida.

Submit a Letter of Intent (LOI)

The process usually starts with a Letter of Intent, or LOI. This is a non-binding document that outlines the key terms of the proposed deal. Think of it as a handshake in writing. The LOI sets the stage for negotiations and includes details such as the proposed purchase price, due diligence period, closing timeline, financing terms (if applicable) and any other preliminary deal points. 

While it’s not legally binding, the LOI helps both parties understand expectations and can accelerate formal negotiations.

Negotiate and Sign the Purchase & Sale Agreement (PSA)

Next comes the Purchase and Sale Agreement (PSA). This document is the binding legal contract that governs the transaction. Everything critical to the deal should be clearly outlined here. It is also where you protect yourself legally – don’t skip attorney review! 

Here are key elements to include in a PSA:

  • Due diligence period – This is your opportunity to inspect the property, review financials, investigate zoning, confirm tenant leases and more. Make sure the PSA gives you enough time to conduct a thorough review and the right to cancel if issues arise.
  • Contingencies – A strong PSA will include protections such as financing, inspection and title contingencies. These will allow you to back out or renegotiate if issues or obstacles arise.
  • Prorations – The contract should specify how rents, property taxes, utilities and other income/expenses will be prorated as of the closing date. This ensures both parties only pay their fair share.
Complete the Escrow Deposit

An earnest money deposit is typically required once the contract is signed. This shows good faith and is held in escrow until closing or release under specific contract terms.

Have Any Closing (Pardon the Pun) Questions? Contact Us at Sirulnik Law

If you plan to invest in commercial property in Florida, don’t go it alone. An experienced real estate attorney can flag unfavorable terms in a Purchase and Sale Agreement, customize the contract to your goals and protect against post-closing surprises or liability. Our attorneys at the Law Offices of Alex D. Sirulnik, P.A. and ADS Title Services, Inc. are here to guide you through every stage of your purchase – from LOI to closing. Contact us today to schedule a consultation.