Buying commercial property is often a complex and stressful process. One of the things that makes commercial property purchases so stressful is the number of fees a buyer is required to pay before finalizing the agreement.

When buying commercial property in Maryland, you will need to pay several fees for various services before an agreement can be finalized. Most of these costs will be included in your closing costs, but could be high depending on the services needed. Some fees will be for reports while other will go to processing services.

Speak with our Maryland commercial litigation attorneys at Heyman Law Firm today at (410) 305-9287 to learn what fees you might need to pay when buying commercial property.

What Fees Will I Need to Pay When Buying Commercial Property in Maryland?

Buying commercial property is often a lengthy and complex process that involves several fees that must be paid. Failure to pay even one of the required fees could mean trouble down the road and possibly jeopardize your ownership rights to the property. Many of the fees you must pay will come due at closing. Closing costs serve as the bulk of a buyer’s fees and can be significant for commercial property transactions. Our Baltimore commercial property attorneys can help you identify the services you will need when purchasing the property and the likely costs due at closing.

While most of the fees you will pay will be part of your closing costs, you might have other expenses. These additional fees usually come in the form of conducting due diligence. Sellers are held to less strict legal requirements when selling commercial property and do not need to disclose every issue a commercial property might have. The burden is on the buyer to investigate their potential purchase to uncover issues before agreeing to buy. For instance, you will typically need to hire a company to evaluate the property for environmental hazards that could impact your uses for the property.

In many commercial real estate cases, these fees can be hefty. Working with our Maryland commercial property attorneys can help ensure that you are paying only what your situation requires and that the property is suited to your needs.

Closing Costs for Flat-Fee Commercial Property

Several closing costs are associated with buying commercial property in Maryland. The most straightforward sales are for flat-fee sales of commercial property. These fees tend to be standard across transactions, so you can expect to pay these fees at closing time. Most of these fees go to investigating the property, including title searches, environmental reports, and appraisals, among several other costs. The amount of each fee will depend on your particular circumstances and the property being purchased. Our Columbia, MD commercial property attorneys can help you prepare the necessary documentation and ensure you have accounted for all the costs due at closing.

Title Search and Title Insurance Fees

One of the first steps to finalizing a purchase of a commercial property will be to hire a title company to conduct a title search. This is to determine whether the property’s title is clear from ownership disputes. They will usually insure that title disputes will not arise in the future, which can be an extremely devasting development after a sale is completed. The costs for a title search and the insurance it will provide can cost anywhere from $2,500 to $15,000 depending on the property.

Appraisal Cost Fees

In most cases, you will need a qualified third-party company to appraise the property being sold. Federal law requires a valuation be done on the commercial property being sold for the lenders in the transaction. This will help determine the true market value for the property in question. The cost of an appraisal will depend on several factors, including the property’s location, the type of property, size, and whether multiple properties are being appraised. However, they tend to range between $1,000 and $10,000.

Environmental Report Fees

Environmental reports are important to determine the state of the land the property sits on and whether the property causes any environmental concerns. Buyers can expect to pay between $2,000 and $6,000 for an initial environmental report. If it is determined that additional reports will be needed, the price could be significantly higher.

Processing and Underwriting Fees

If you are using a bank to help finance the purchase of commercial property, you will have lenders working on your transaction. As such, you will be required to pay processing an underwriting fees for the time the lenders spent working on your loan. These fees should be clearly laid out by the lender and usually costs from $500 to $2,500.

Credit Check Fees

In the sale of most commercial property, credit checks will need to be done for all major stakeholders that are a part of the organization. If a company has several investors with equity in the property, the costs of  the credit checks will be higher. It is not uncommon for credit checks to cost over $1,000. Our Maryland commercial property attorneys can help you get the services you need so that you successfully close the sale.

Closing Costs for Value and Size-Based Commercial Property

Some commercial property sales are based on the value and size of the property being sold. These commercial transactions can be much more complex, making the fees harder to determine. In these types of sales, lenders will make their profit on origin point fees. If the loan is at “par,” fees will be paid to a lender from the interest charged on the loan at a certain percentage. Origination fees can range from 0.25 and 0.5%.

If you end up using a commercial mortgage broker or commercial loan marketplace, you might need to pay mortgage broker fees. Mortgage brokers can help you secure financing, and while not required, might be worth paying for to expand your options. Fees for a mortgage broker could be up to 2% but might not costs anything depending on the loan you secured.

Lastly, you will have inspection costs so that the condition of the property can be determined. Inspection costs will depend on the size of the property as the fees are based on the square footage of the location being inspected. Our Maryland commercial property attorneys can help you along every step of the buying process so that your purchase goes smoothly.

Our Maryland Commercial Property Attorneys Can Help

Our Towson, MD commercial property attorneys at Heyman Law Firm can provide you with a case consultation today by calling us at (410) 305-9287.