Five things to do before buying property


It’s a seller’s market these days — or so it seems if you read the headlines.

It’s easy to get swept up in the fever, but don’t race to purchase without including terms in a contract that allow you to conduct investigations of the property before you buy. A common-sense approach, combined with asking the right questions at the right time, will ensure you are getting what you are paying for and that you’ll be positioned to get your investment in the property back when you’re ready to sell.

Titles, surveys and more

There are five areas in the acquisition process that require extra attention to ensure you have asked the right questions and done the right due diligence so you will not be saddled with a bad piece of property.

1. Title: You must check the title, particularly when you are buying a piece of commercial property, to ensure you are indeed buying what you think you are buying. Sounds straightforward, right? Not so fast. As companies grow, property can become part of a corporate portfolio, renamed, transferred between inter-company entities or parked in a single-purpose LLC. So while the leadership of Company ABC thinks it owns Property XYZ, it may no longer be the actual owner. If you decide to skip the title work, you might find yourself with a deed to the wrong property — or buying something with liens or restrictions that will interrupt your intended use.

2. Survey: See mowing lines in the property you want to purchase and think, hey, that looks about right? Wrong. How a piece of property is currently being used may not have much to do with its actual legal boundaries. For this, you need a licensed surveyor to confirm what you are actually purchasing.

3. Inspections: If you skip the inspection, you could wind up with a money pit of problems. There are two sets of physical inspections you should complete. The first is the design-construction inspection, where you have a licensed inspector or experienced contractor or other construction expert examine the mechanical, electrical, plumbing and other improvements to determine if all are in good working condition. The second is an environmental inspection. Michigan has strict liability rules for environmental contamination. If contamination is discovered, unless you establish a baseline environmental condition of the property, you could be buying a nightmare of conditions that you’ll be on the hook to remediate.

4. Government: It’s worth your time to pay a visit to the municipality that has jurisdiction over the property you want to buy. Does the property have a certificate of occupancy, or is it under a temporary occupancy that could require you to make substantial improvements before moving in? What’s the zoning? What’s the master plan for the area, and will your intended use of the property be allowed? You will be able to learn an incredible amount of information and save yourself potential heartache and dollars at the same time.

5. Unique issues: The final category covers all the special things about a piece of property. Is it near water? If so, it may be subject to additional regulations. Is it part of a condominium association? If so, there may be special restrictions on what you can — and cannot — do with the property.

The purchase price for any property is based on certain assumptions about the property. Don’t make the mistake of failing to confirm your assumptions are accurate.

Do the necessary legwork, and ask the right questions to make sure you’re buying what you think you’re buying.

Melissa Collar is a real estate broker and partner at Warner Norcross & Judd LLP, where she concentrates her practice on real estate and construction law. She can be reached at

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