Texas Commercial Closing Checklist + Red Flags

A practical checklist for buyers and sellers in Texas commercial real estate transactions

Prepared by Prasla Law Firm PLLC · Greater Houston, Texas

How to use this checklist

This checklist walks through the typical milestones of a Texas commercial real estate closing, in the order they usually occur, and flags the issues that most often cause delays, surprises, or disputes. It is written for small and mid-market deals — office, retail, industrial, mixed-use, and small multifamily — rather than institutional transactions.

Every transaction has its own facts. Contract language and site-specific issues control over generic guidance. Use this as a framework to organize your thinking and your document collection, not as a substitute for legal review.

Section 1 — Before signing the purchase contract

[ ] Confirm who is buying. Will the buyer be you personally, an existing LLC, or a new entity formed for this transaction? Form the purchasing entity before signing if possible, or include an assignment right to the entity before closing.
[ ] Confirm who is selling. Does the seller on the listing match the record owner at the county clerk's office? Entity name mismatches are a common red flag that should be resolved before signing.
[ ] Signed Letter of Intent (LOI) in hand summarizing price, deposit, feasibility period, closing timeline, and any key conditions.
[ ] Engage a commercial broker, attorney, and lender early — all three have input that shapes the contract.
[ ] Negotiate the purchase and sale agreement — TREC promulgated residential forms are generally not appropriate for commercial deals. Most Texas commercial PSAs are custom-drafted or use a Texas commercial real estate council template.

RED FLAG: Seller insists on using a residential contract form for a commercial property. Have an attorney review before signing.

Section 2 — Earnest money and opening escrow

[ ] Earnest money deposited with the title company per contract deadline
[ ] Copy of wire confirmation or deposit receipt in your file
[ ] Escrow instructions agreed to by both sides
[ ] Title company contact (closer and escrow officer) identified and saved

RED FLAG: Seller or broker asks that earnest money be wired to an account you have not independently verified. Wire fraud in real estate is widespread — always confirm wiring instructions by phone using a number you looked up yourself, not one emailed to you.

Section 3 — Due diligence / feasibility period

Title

[ ] Title commitment received from title company
[ ] Review Schedule A (proposed insured, current owner, legal description)
[ ] Review Schedule B-1 (requirements to issue the policy)
[ ] Review Schedule B-2 (exceptions from coverage — easements, restrictive covenants, prior liens, mineral reservations)
[ ] Pull and read every recorded document referenced on Schedule B — do not rely on the commitment summary alone
[ ] Raise objections to title defects within the contract deadline

RED FLAG: A Schedule B exception references a recorded document that no one has pulled and read. The generic commitment summary can hide significant issues.

Survey

[ ] Survey ordered (ALTA or Category 1A, per contract)
[ ] Survey received and reviewed — compare to the legal description and site visit
[ ] Identify all easements, encroachments, setbacks, flood zones, and access points
[ ] Confirm there are no significant discrepancies between the survey, the title commitment, and the physical condition of the property

RED FLAG: The survey shows an encroachment (neighbor's fence, shared driveway, building extending across a lot line) that no one has addressed in writing.

Environmental

[ ] Phase I Environmental Site Assessment ordered (usually required by lender)
[ ] Phase I reviewed — any Recognized Environmental Conditions (RECs)?
[ ] Phase II testing if Phase I flagged concerns
[ ] Historical-use review — former gas station, dry cleaner, industrial operation on site?

RED FLAG: Seller pressures buyer to waive or skip environmental review on a property with an unclear use history.

Zoning and land use

[ ] Confirm zoning permits your intended use (do not rely on broker's statement — check with the city or county)
[ ] Confirm parking, signage, and density requirements
[ ] Identify any pending re-zoning, plat amendments, or development restrictions
[ ] Confirm certificate of occupancy matches the intended use
[ ] Check for deed restrictions or recorded CCRs that limit use independently of zoning

Physical condition

[ ] Property condition assessment (PCA) / property inspection report
[ ] Roof, HVAC, electrical, plumbing, structural reviewed
[ ] Parking lot, landscaping, and exterior condition documented
[ ] Confirm all systems work during a site visit

Financial and operations (if income-producing)

[ ] Rent roll from seller — names, terms, rent amounts, deposits, delinquencies
[ ] All leases and amendments — read each one
[ ] Estoppel certificates from all tenants confirming lease terms
[ ] SNDA agreements with major tenants (subordination, non-disturbance, attornment) as applicable
[ ] Operating expense statements for at least 2-3 years
[ ] Service contracts (landscaping, security, pest, janitorial) — assumable or terminable?
[ ] Property tax history and appraisal district records

RED FLAG: Rent roll does not match actual lease documents. Seller represents 100% occupancy but the operating history shows vacancies.

Confirm financing

[ ] Loan application submitted
[ ] Lender due diligence requirements met
[ ] Appraisal ordered
[ ] Loan commitment letter in hand before feasibility period expires

RED FLAG: The feasibility period expires and earnest money goes hard before the loan is firmly committed.

Section 4 — Pre-closing

[ ] Final walkthrough of the property
[ ] All contract conditions met — written waivers and approvals in file
[ ] Insurance binder in place for closing date
[ ] Buyer's entity authorized to close — operating agreement resolution, corporate resolution, manager signature authority
[ ] Seller provides good-standing documentation and authority to close
[ ] Settlement statement received and reviewed at least 24 hours before closing — verify prorations, credits, loan fees, and wire amounts
[ ] Wire instructions verified by phone using a known number
[ ] Confirm parties, dates, and amounts on closing documents

Section 5 — Closing day

[ ] Government-issued ID for all signatories
[ ] Entity documents, if signing on behalf of an entity
[ ] Funds wired — confirm receipt at title company
[ ] Sign all closing documents — deed, settlement statement, loan documents, affidavits
[ ] Receive copies of all executed documents
[ ] Confirm title company will record deed and loan documents promptly

Section 6 — Post-closing

[ ] Recorded deed received from county clerk
[ ] Final title policy issued by title insurer
[ ] All utility accounts transferred or established in buyer's name
[ ] Tenants notified of ownership change and new rent payment instructions (if applicable)
[ ] Service contracts assigned or renegotiated
[ ] Property tax notifications updated with county appraisal district
[ ] Insurance policy issued (not just binder)
[ ] Lease files, plans, warranties, and operating manuals delivered by seller per contract
[ ] Entity registered to do business in Texas if non-Texas entity purchased Texas property
[ ] Estate planning considerations — consult your estate planner about how the new asset fits into your plan

Summary red flags (things to escalate immediately)

Seller or title company pressure to close before due diligence is complete
Wire-transfer instructions arriving by email with last-minute changes
Entity name mismatches between listing, contract, and record title
Title commitment exceptions that no one has pulled and read
Survey discrepancies that no one has addressed in writing
Seller reluctance to provide operating financials, leases, or estoppels
Environmental concerns the seller wants to "handle informally"
Financing that is not firmly committed before earnest money goes hard
A lease or contract provision that differs materially from the LOI you negotiated

Next step

Commercial closings in Texas reward preparation and punish shortcuts. If you have a deal in progress or are evaluating one, we can help. Zulfiqar N. Prasla is a Texas-licensed attorney (Prasla Law Firm PLLC, 800 Bonaventure Way, Suite 154, Sugar Land) and, exclusively, a Fee Attorney for Fidelity National Title. When your closing is at Fidelity's Sugar Land office, we represent you as your attorney AND review the closing in our Fee Attorney capacity — giving you continuity of legal review from contract through closing. For closings at other Texas title companies, we still represent you as your attorney and coordinate with the title company of your choice.

Schedule a consultation: 713-955-4045 · znp@praslalaw.com

The information in this checklist is for general educational purposes only and is not legal advice. Reading this checklist does not create an attorney-client relationship. For advice about your specific transaction, consult a licensed attorney.

Prasla Law Firm PLLC · 800 Bonaventure Way, Suite 154, Sugar Land, Texas 77479

Attorney Advertising. Not Certified by the Texas Board of Legal Specialization. Prior results do not guarantee a similar outcome.