Commercial land is any type of land, which is intended to be used for commercial purposes. Such lands might be used for official use, for establishing your own business, for giving on rent, for constructing buildings, which are intended to be used for opening shops, showrooms, markets, etc. These lands can be used for malls, multiplexes, hotels, restaurants, apartments, etc.
Boom in Prices of Commercial Lands Due to the boom in the commercial property sector, commercial lands are being transacted at unbelievable prices. The prices of commercial lands in IT spaces have gone up three to four times in last two to three years.
According to a research, thousands of commercial projects are coming up in different parts of India. About 18 million square feet of commercial buildings were constructed in the year 2004-05 and it is likely to touch the 50 million mark by 2009. The places where major investments are being done in commercial lands are Bangalore, Mumbai, Hyderabad, Chennai, Gurgaon. The other cities, like Pune in the west, Jaipur and Chandigarh in the north, and Kolkata in the east are also witnessing boom in commercial land prices.
Some Points to Consider Before Purchasing
- The most decisive question before purchasing a commercial land is that whether you can build on it or not. It is important to note that if the land can't support a foundation or it has no access to a sewage system, then it may not have development potential.
- You should research the soil quality and topography. In case if the soil is damp or moist, it can significantly increase your building costs. Also development on hilly-lands or steep slopes can be much more expensive.
- Road accessibility to your land is a must. For commercial use the accessibility of public is essential as it decodes the fate of your business.
- Buying a commercial land is a serious investment and regardless of your own probing and examining it is always a good idea to consult a property broker or financial advisor before deciding any investment.
Hiring a Commercial Property Broker If you are buying lands for commercial purposes, then it will be better to take the services of a qualified broker. You should hire the broker at least one year prior to your goal of buying. Buying a commercial property requires negotiations, the services of appraisers and contractors, municipality building and safety, marketing research, environmental concerns, etc. With the priceless services of a professional broker, your each step becomes easier. A property broker possesses a deep market knowledge and better market information. So he will definitely save your time and money. Here are some useful points provided to you about the types of brokers, payment conditions, calculating the commission, etc.
- Types: Commercial brokers usually are of two types: Full service brokers and Buyer-only representatives. Full service brokers serve as agents for both sellers and buyers, while buyer-only representatives serve only for buyers that means you.
- Payment: Brokers are not paid upon the failure of transaction, whatever the reason. They are paid only if the transaction is complete.
- Commission: The commission of broker are calculated in two ways. Either a percentage of the total sales price or a flat fee, which is decided prior to the agreement with the broker.
- Agreement: You must put your agreement with your broker in writing and it must include the right to end the agreement within five to ten days written notice. It will protect your interests in case your broker is not doing an outstanding job for you and you want to terminate your relationship with him.
- Dual Agent: If one agent works for two opposing parties in the same transaction i.e. for the seller as well as for the buyer then dual agency occurs. Any such case must be disclosed and both sides must agree to accept the dual agency scenario.