If you are thinking about buying or selling a larger building, say in the one to five million dollar range, prepare yourself for what could become a very trying experience.
In 2011, I represented the sellers of two larger buildings in the Sandy Hill neighbourhood of Ottawa.
One sale took about four months from time of acceptance of a conditional offer until all of the buyer’s conditions were met. The second building took about eight months through start and stop negotiations and meeting of conditions.
These sellers were probably the most organized sellers of this type of building that I have dealt with. It was a husband and wife team with a clear division of responsibilities for the buildings; they were very smart, educated, generous in negotiation, and realistic throughout the process.
Even though the buyers started with significant down payments, their lending institutions wanted more.
I know these buildings would require Phase One Environmental Inspections. However they morphed into a mold inspection for both surface and air borne. Then there was the asbestos inspection.
It was a very bad day to go through 21 units of an old building that was not air conditioned on one of Ottawa’s hottest, most humid days, watching technicians take multiple samples from every apartment and common area, but I digress.
We’re not done yet, and then came the building inspection, damn; the banks were back again, wanting more money.
Now here comes CMHC, they decided to fly one of their people down from Toronto to inspect the building, separate from the buyer’s personal building inspector.
This nice young lady arrived a day ahead of time, reviews a few units, cannot access the roof or attic as she is not equipped with a ladder and flies out again faster than an MP on a Friday afternoon.
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I could go on with ever gruesome details but I would need to re-enter therapy and start medication again.
The moral of the story is that if these sellers did not display the patience they did, the building would not have sold.
Keep that and an emotional/ego detachment in mind if you plan to play in this market. In the process, all parties may believe that all due diligence has been completed and that the transaction is about to conclude.
However institutions outside of the buyer and seller and Realtor’s control can become involved and extend the process to test everyone’s patience.