BUYING, SELLING OR REFINANCING?
Miami Real Estate Attorneys:
As title agents of Old Republic National Title Insurance Company, the lawyers offer a wide range of Title Insurance Services including but not limited to examinations of title, title opinions, title insurance commitments and title insurance policies for both owners and mortgagees or investors.
How is an Apartment Building Inspected?
If the inspector is allowed access into individual units, there will be more information on the inspection report. This can lead to more complicated negotiations between the buyer and seller. The buyer will want to have repairs made or negotiate an appropriate reduction in the purchase price to cover the cost of repairs. The seller will want to negotiate the number of repairs that must be made and the cost of performing those repairs. A real estate attorney can help either buyer or seller negotiate repairs in order to prevent the sale from falling through.
How is an Apartment Building Appraised?
An apartment building inspection can be either more or less detailed than an inspection of a single-family property. If the building is occupied and the landlord has not requested access from the tenants, then your inspector will not be permitted to enter individual units to perform an inspection. The inspection will thus be limited to exterior and common areas. In this case, a buyer runs the risk of having to make unknown repairs in the units, and the seller will have an even more important duty to disclose any issues he or she is aware of in the individual units.
An apartment building is usually classified as a commercial building. (Some small duplexes and triplexes are not classified as commercial, but the majority of apartment buildings are.) This means that the building will be valued by an appraiser who has experience with commercial buildings. If either buyer or seller want to challenge this valuation, it will be helpful to have the advice of an attorney who has experience in apartment building sales and commercial real estate.
It is also important to understand the different methods of valuing a commercial building. Many investors calculate capitalization rates to determine how much cash flow they can expect or how long it will take to see a return on investment. While this is helpful for investment purposes, it is not the method used by commercial appraisers. When you seek financing for a commercial building, the lender will want an appraisal to be sure the property is worth at least the amount that is being loaned. The appraiser will, therefore, come up with a single number to value the building. In the event that either the buyer or the seller wishes to challenge the appraisal, this is the figure that must be understood.