Whether you are buying or selling real estate, it is critical that you have the property inspected and that you disclose any issues that are required by law to disclose. For example, you may be legally required to disclose lead, asbestos or other toxins in the home. Failure to do these things can result in fines or other issues. However, it isn't always easy for real estate buyers and sellers to know what they need to do. Hi, my name is Mary. I have been investing in real estate since the week after I left uni. I love it, and I have learned a lot along the way. I want to help and inform others so I decided to make this blog. I hope you find it useful.
If you are applying for a mortgage to buy a motel, it is important to factor in all the associated costs. This will help you determine an accurate sum of money that you need from the lender. When buying a motel, a common mistake made by buyers is accounting for the price of the property alone. They forget about other charges associated with acquiring a business of such nature. You should be aware of other costs to determine whether you have money to cater for them, or include them in your mortgage application. Here are a few additional costs you will incur:
The legal fees
When applying for a mortgage, the lender agrees to loan you a certain amount of money to acquire property. The lender has a property charge over what you are acquiring, and you will own it exclusively once you have repaid the debt in full. Under these terms, both of you have a contractual obligation where you are required to repay the loan on the condition that the lender will grant you full ownership once the debt fully repaid. When making these contractual agreements, a legally recognized officer such as a commissioner of oaths has to oversee. Therefore, you will pay legal fees separate from the price of the property.
The license fee
Since you are buying the motel from another person, the local authorities will charge a fee for allowing you to take over the ownership of a motel that is already running. This is because they need to grant a new license to a person fit to own, run, or manage a motel based on considerations such as criminal records. In addition, licensing is also required if you are making any modification to the nature of the business.
For purposes of taxation, the value of the motel must be established. This is because tax agencies must know of any property you own to determine the amount tax you should remit to the government every year. The cost of hiring a valuer is separate from the price of the property.
Business owners treat goodwill differently. Some sellers will automatically include it in the price of the property while others compute it and require you to pay for it separately. In brief, goodwill refers to the strategic advantage that a business has developed over the years. It could be a business or brand name, good location, or guaranteed customers. When selling a motel, some owners estimate the value of the strategic advantage and sell it to you separately.
You need to be ready to cater for all these additional costs to avoid delaying your operations.Share
23 February 2016