Commercial Purchase

The closing process for a commercial property purchase in Mississippi is significantly more complex than residential, involving extensive due diligence and financing. While a title company or attorney still serves as the settlement agent, the scope of work and risk assessment is much broader.

1. Contract & Expanded Due Diligence

Customized Contract: The purchase agreement (often called the Letter of Intent or LOI, followed by a formal Purchase and Sale Agreement) is highly customized and specific to the asset type (e.g., office, retail, industrial).
Extended Due Diligence Period: A commercial contract includes a much longer due diligence period (often 30–90 days). During this time, the buyer investigates all aspects of the property:
Financials: Reviewing rent rolls, operating statements, vendor contracts, and leases.
Property Condition: Phase I Environmental Site Assessments (ESAs), comprehensive structural inspections, and engineering reports.
Zoning & Permitting: Verifying local zoning laws and ensuring all current use permits are valid.
Title and Survey: The title search is often deeper, and a detailed ALTA/NSPS Land Title Survey is typically required to accurately identify all easements, boundary lines, and improvements.

2. Financing and Entity Formation

Complex Financing: Commercial loans involve non-recourse or recourse debt, specific collateral requirements, and often take longer to underwrite than residential mortgages.
Entity Documents: Commercial buyers often close under an LLC or corporation. The closing agent must review the organizational documents (e.g., operating agreements, corporate resolutions) to verify the authority of the signers.

3. Closing Preparation and Risk Mitigation

Prorations: The settlement agent meticulously calculates complex prorations for items like existing rents, tenant security deposits, common area maintenance (CAM) fees, property taxes, and utility costs.
Title Endorsements: The title insurance policy will include numerous endorsements tailored to the specific commercial risks, such as access to the property, utility coverage, and zoning compliance.
Closing Disclosure / Settlement Statement: A Settlement Statement (often the HUD-1 format or a specific commercial statement) details all costs, which can include significant fees for legal counsel, environmental reviews, and large title policy premiums.

4. The Commercial Closing

Execution: The closing occurs at the title company or attorney’s office. Due to the volume and complexity, documents often require specific corporate resolutions authorizing the signatory to bind the entity.
Transfer: The Warranty Deed transfers ownership, and the Promissory Note/Security Instrument secures the loan.
Post-Closing: The settlement agent records the deed and security instrument. Following closing, there is often a post-closing reconciliation period to finalize any adjustments or prorations that could not be determined before settlement.

5. The key difference lies in the magnitude of financial risk, the depth of due diligence, and the complex legal documentation involved with entity-owned properties and specialized financing.