Commercial real estate closings run on a whole different operating system from residential deals. It’s not a longer version of a home closing. It’s its own animal, and if you're stepping into the arena, it helps to know what kind of game you're playing. We’re here to make sure you show up ready.
Due Diligence Is a Deep Dive
Residential buyers do some poking around (inspection, appraisal, maybe some lender-required documentation) and that’s usually enough. Commercial deals go deeper. Much deeper.
On top of the usual title and environmental checks, commercial due diligence brings in lease audits if there are tenants, income and expense reviews, zoning compliance, building code checks, and environmental reports (Phase I, sometimes Phase II). Miss one of these and you could inherit a tenant who stopped paying rent six months ago—or a zoning issue that kills your intended use. Best practice: Build a checklist and make sure every document you get answers a financial, legal, or operational question. If it doesn’t, ask why it’s there—or why it isn’t.
Financing Has Quirks
Residential buyers get mortgages. Fixed rates, 30 years, predictable terms. Most banks hand you a neat, templated process.
Commercial deals don’t care about your personal credit score as much as your property’s ability to produce income. Lenders dig into cash flow projections, rent rolls, and DSCR (debt service coverage ratio). Financing might include private equity, partnership contributions, or multiple institutional lenders. Everyone wants to know if the property pays for itself—and then some. Keep your numbers clean and your assumptions defensible.
Contract Negotiations
A residential purchase contract is usually a standard form. Fill in a few blanks, sign on the dotted line.
Commercial purchase and sale agreements don’t follow templates. They’re built from scratch and negotiated down to the punctuation. You’ll see language about representations and warranties, indemnities, and contingencies that hinge on environmental reports or lease estoppel certificates. These terms decide who’s responsible when something goes sideways.
Who’s at the Table?
Residential closings feel cozy: buyer, seller, a couple of agents, a lender, and someone from the title company.
Commercial closings include a bigger crowd. Attorneys are always involved. You may also need environmental consultants, surveyors, zoning advisors, CPAs, or property managers. Everyone has a piece of the puzzle, and everyone has questions. The key is coordination. Keep a contact sheet with roles and responsibilities. Don’t assume someone else is handling it.
Zoning Isn’t a Given
Residential properties usually have straightforward zoning rules—what you see is what you get. That’s not the case with commercial.
Before you close, you need to verify that your intended business use is allowed. It might require a conditional use permit or a zoning variance. And it’s not enough to ask the seller—they may not even know. Always confirm with the local municipality in writing. If your use isn't permitted, you're buying a lawsuit or a money pit.
Title and Ownership
In residential real estate, the buyer is usually a person. Done and done.
LLCs or corporations often own commercial properties, and the new buyer sets up a new entity. That adds layers—operating agreements, resolutions, corporate documentation. The title company needs all of it. Want to close on time? Make sure the entity is set up correctly, and that the people signing documents have the authority to do so. No paperwork? No closing.
Ready to Close Like a Pro?
Commercial deals come with more paperwork, more players, and higher stakes, but they’re also where the real opportunities live. Spectrum Title Services, LLC handles commercial closings across Florida with the same energy you bring to your deals. Call 954-727-3347 and let’s get it closed.