How Do Residential Closings Differ from Commercial Closings?

Home > Real Estate Law Blog > How Do Residential Closings Differ from Commercial Closings?

Real estate closings are a complex but necessary part of any real estate transaction, whether the property being sold is residential or commercial property. However, residential closings differ from commercial closings in a few significant ways.

How Do Residential Closings Differ from Commercial Closings?

  • Number of People Involved – Residential closings are usually attended by the buyer, seller, real estate agents, a title company representative, and the closing attorney. The number of people involved increases with commercial closings, which may be attended by investors, business partners, attorneys, inspectors, and lenders, in addition to the buyers and sellers.
  • How They Are Financed – Where residential transactions are usually financed by one mortgage company, commercial real estate buyers might have multiple sources of financing, such as investors, commercial lenders, or even their personal finances.
  • Federal Regulation – Residential closings are more regulated than commercial closings. In fact, the residential buying process is regulated by the Real Estate Settlement Procedures Act (RESPA), while commercial closings are not regulated by this federal law.
  • Title Search vs. Due Diligence – Residential closings involve a title search performed by a title search company, which looks for any issues regarding the deed of a home. Commercial closings involve due diligence instead. It’s a more comprehensive search and the buyer’s responsibility to identify liabilities and other issues.

If you are selling or purchasing a residential or commercial property, you can turn to Bright Law, PLLC. Your attorney will ensure your closing goes smoothly and offer the assistance you need throughout the process.