A commercial closing shares the same backbone as a home purchase, clear title, escrow, and recording, but the moving parts are different and there are more of them. Let me lay out how a commercial deal in Virginia actually runs.
Written by Adam L. Engel, Esq., Principal and real estate attorney at Prime Title & Escrow
I close both homes and commercial property across Virginia and West Virginia, and people are often surprised by how different the two feel once you are past the contract. You still confirm the title is clean, move the money through escrow, and record the deed. What changes is the number of pieces in motion and the fact that almost nothing runs on a standard form.
A commercial closing clears title, moves money through escrow, and records the deed, the same backbone as a home. What changes is that it runs on a negotiated contract, has a due diligence period, usually an entity buyer, an ALTA survey, and broader title coverage. There are more parts, and almost nothing is a standard form.
The contract sets the rules, not a standard form
A residential purchase usually runs on a standard association contract that most parties have seen many times. A commercial deal runs on a negotiated purchase and sale agreement that the two sides and their lawyers write to fit the property. That agreement controls the deadlines, the contingencies, the deposits, and who pays for what.
Because the contract controls so much, the closing timeline is only as clear as the contract is. The first thing I do on a new commercial file is read the agreement closely and build the closing around its dates.
Due diligence is the heart of the deal
Most commercial contracts give the buyer a due diligence period, sometimes called a feasibility or study period, to investigate the property before the deposit is fully at risk. A lot happens in that window. The buyer inspects the building, often orders a Phase I environmental site assessment, checks zoning and permitted use, reviews any existing leases, and orders the survey and the title work.
On a leased property the buyer usually collects estoppel certificates from tenants and, where a lender is involved, subordination, non-disturbance, and attornment agreements. My job is to drive the title and survey side of that review and to flag anything in the public records that could affect the buyer’s plans.
The due diligence period is a deadline, not a suggestion. If it passes without the buyer acting, the deposit often goes hard, meaning it is no longer refundable. I track that date for you so it never slips by accident.
The buyer is usually an entity, not a person
Most commercial buyers take title in a limited liability company, a corporation, or a partnership rather than in their own name. That means before I can insure and record, I have to confirm the entity exists, is in good standing, and that the person signing has the authority to bind it.
Gathering and correcting those authority documents is the single most common avoidable delay I see, so I ask for them early. I walk through exactly what the title company needs in my guide to closing as an entity.
Title insurance is broader, with endorsements
A commercial deal still uses an owner’s policy to protect the buyer’s equity and a lender’s policy to protect the lender’s lien. The difference is the set of endorsements that get added to tailor the coverage to the property, for matters like zoning, access to a public street, and the survey. The current policy forms are the 2021 American Land Title Association forms, which took effect on July 1, 2021 and replaced the 2006 forms, according to the American Land Title Association.
I cover the policies and the common endorsements in my guide to commercial title insurance.
The survey carries more weight
On a commercial purchase the lender almost always requires an ALTA/NSPS Land Title Survey, a detailed survey built to a national standard that ties directly to the title commitment. It locates the building, the easements, any encroachments, the access points, and the flood status, and it lets the title company remove the standard survey exception from the policy.
I explain how the commitment and the survey work together in my guide to the commercial title commitment and the ALTA survey, so you can read your own commitment with confidence.
The escrow and the deposits are larger
Earnest money on a commercial deal is bigger and is often paid in stages, with an initial deposit at signing and an additional deposit when the due diligence period ends. The contract and a separate escrow agreement spell out when the money is refundable and when it is not, which I cover in commercial earnest money and escrow.
Because the dollar figures are large, these deposits are a favorite target for wire fraud. I verify every set of wiring instructions and I will never send you a change of instructions by email out of the blue.
Closing costs and recording work a little differently
The taxes that the clerk charges to record scale with the numbers in your deal. The recordation tax on the deed is based on the price, and the separate tax on the deed of trust is based on the loan amount, so both are larger on a commercial transaction. In Virginia the seller also pays the grantor’s tax. You can read how each one is calculated in my guides to the Virginia recordation tax and the Virginia grantor’s tax.
One consumer rule that does not usually apply on the commercial side is the three business day Closing Disclosure rule. That federal protection covers most consumer mortgage loans, not business purpose loans, so a commercial borrower generally does not receive a Closing Disclosure or the matching waiting period.
How I keep a commercial closing on track
A commercial file has more parties than a home purchase, the lender, the surveyor, the environmental consultant, the existing lender being paid off, the entity’s lawyers, and sometimes tenants. I act as the single point of contact who orders the title early, reviews every requirement and exception, coordinates the survey and the payoff, and confirms the entity’s authority before the signing date. You can see the full scope of what I handle on my commercial real estate services page.
Whether your property sits in Virginia or in West Virginia, the goal is the same. No surprises at the table, your funds protected, and a clean recorded deed at the end.
Send me your property and your timeline and I will lay out the title and settlement costs and walk you through the closing.
Get Your Free Quoteor call (703) 552-4155Frequently asked questions
How is a commercial closing different from a home purchase in Virginia?
A commercial closing rests on the same foundation, clear title, escrow, and recording, but it runs on a negotiated contract rather than a standard form, includes a due diligence period, usually has an entity buyer, requires an ALTA survey, and carries broader title coverage with endorsements. There are simply more moving parts.
Do commercial loans have the three business day Closing Disclosure rule?
Usually not. The Closing Disclosure and its three business day waiting period are a federal consumer protection that applies to most consumer mortgage loans. A business purpose commercial loan generally does not receive a Closing Disclosure or the matching waiting period.
Can a person buy commercial property, or does it have to be an entity?
Either is possible, but most commercial buyers take title in a limited liability company, a corporation, or a partnership. If you buy in an entity, the title company has to confirm the entity is in good standing and that the signer has authority before it can insure and record.
Do I need an ALTA survey for a commercial purchase?
On most commercial purchases the lender requires an ALTA/NSPS Land Title Survey, and many buyers want one even with cash. It locates the improvements, easements, encroachments, and access, and it lets the title company remove the standard survey exception from your policy.
How long does a commercial closing take?
It depends almost entirely on the contract, especially the length of the due diligence period and how quickly the survey, environmental review, and entity documents come together. Many commercial deals run several weeks to a few months from contract to closing. Ordering the title and survey early is the best way to protect the date.
Can you close a commercial deal in both Virginia and West Virginia?
Yes. I handle commercial closings on both sides of the line. The core steps are the same, with each state’s recording rules and transfer taxes applied where the property sits.
This article is general information about commercial real estate closings in Virginia and West Virginia. It is not legal advice for your specific transaction, and your costs and requirements depend on your deal. Please confirm the details with me directly.