24 Jan 20 by Joanne High
What Is Property Acquisition?
Commercial property accounts for an estimated 13% of buildings in the United Kingdom. Commercial properties are constantly changing hands through the process of acquisition.
Property acquisition refers to the process of gaining ownership or rights over a real estate property. The rules of acquisition of any given property may vary from country to country, however, most follow a standard process.
Let’s have a gander at what this process looks like.
The Search & Discovery
The very first step to property acquisition is finding the right property. Most people start off with a set of requirements they have and then choose to look for a property that matches these requirements, or finds a commercial agent / surveyor to do it for them.
An agent is often better equipped at finding the right property due to their experience and connections within the market. Once you select a given property, you are now ready for the next step.
Completing Your Due Diligence
Due diligence is one of the most important parts of the acquisition process. It involves a thorough examination of every aspect of the property. This includes verification of rental income and whether the property is over or under let. What future capital expenses are likely, the strength of the covenant and more.
An analysis of all environmental issues must also be completed, along with the corresponding clean up cost of any issues that may be found during the process. Additionally, there should be a building survey undertaken to ensure there are no issues with the building fabric.
Other important steps in the due diligence process involve title verification, legal evaluation, and searches. As a buyer, it is important to be fully informed about the property you intend to acquire.
Appraisal & Making A Written Offer
Once you are satisfied with the results acquired through the due diligence, it is time to make a written offer to the actual owners of the property. It is likely that you will have made an offer prior to completing all of your due diligence, and your offer will be subject to finalising the due diligence. This is because you don’t want to waste time and money if the offer is not acceptable. Before making the offer, be sure to conduct a property valuation (or appraisal), and decide on the amount you are willing to offer.
If you are working with an agent, the offer will go through them, on your behalf.
Negotiations Between Parties & Agreements
Once you’ve made your offer, the seller may agree to a negotiation. During this time, the agent will act on your behalf to agree the lowest price possible. If the parties are able to reach an agreement, a decision will be made. Alternatively, if the negotiations do not go well, and neither party is willing to meet the other halfway, the acquisition will not move forward.
Finding A Commercial Agent
As a tenant or buyer, finding the right commercial agent / surveyor is essential to the process of property acquisition. With over 30 years worth of experience, we have both the credibility and expertise to oversee the entire acquisition process.
Get in touch with us for a FREE consultation on all your real estate needs, and we’ll help you find what you’re looking for.