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The Anatomy of Local Commercial Deals



By Nancy Landmark

Commercial transactions are fundamentally different from residential transactions in two key respects:  the amount of risk being assumed and the demands of the customers. It is important to remember that while the lure of a big payday is tempting, it must be tempered with a solid understanding of what is involved in commercial transactions. 

Often, real estate is only tangential to the “real” transaction that the parties are focused on. As a result, title considerations are often delayed and must be addressed with rapid fire response, based on a solid understanding of the title policy and endorsement coverage available. Unlike residential transactions, there is a great deal of negotiation involved in providing title insurance and settlement services in a commercial transaction. Details of both cost and coverage are subject to minute review.

Commercial transactions may have a “shelf-life” in your office of as little as a few days, or it may be closer to a decade. As a result, making an impression in the commercial title insurance marketplace takes more than a pricing strategy, it requires careful thought about staffing and resources, as well as ongoing research and education—bout the product we sell, the services we offer and real estate title law in the jurisdiction where the property is located. 

The key to success lies in building the best team for your foray into commercial transactions and equipping them with the tools and other resources to succeed. Your team should consist of a closer who is used to, and comfortable with, complex transactions; an examiner who is competent with full title examination skills and understands the criteria that must be used when examining title to various interests in real estate, including easements and leases; someone with solid knowledge and underwriting experience with respect to endorsements and policy coverage; and (if you are an agent), a strong partner at your title insurer to provide guidance, clarity and necessary approvals for your transactions.

Nancy Landmark is Senior Title Counsel for Commercial Partners Title, LLC. She can be reached at nancyl@cptitle.com. Landmark will speak more in depth about this topic during a session titled "The Anatomy of Local Commercial Deals" during ALTA's Annual Convention. Click here to register.


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