Sticking the Landing: Oft-Neglected Risks at Closing of Purchase and Sale Transactions
Published: October 5, 2026
In the latest issue of “Mark’s Marketing Musings,” Weintraub Tobin Shareholder Mark Ellinghouse explores a common challenge: often overlooked risks at the closing of commercial real estate deals.
A lot of things must occur in order for a flight to go smoothly. The pilot has to create a flight plan, check his instrumentation, review his preflight checklist, coordinate with the air traffic controller, and fly the plane with skill and attentiveness. There are numerous opportunities for a misstep that could doom the passengers onboard.
Purchase and sale transactions are not unlike a flight. They too require particular attention to the various stages of the deal, from negotiation of the purchase contract, review of title, coordination of due diligence, arranging financing and completing the close of escrow. The potential for legal disputes is endless.
Most of us would understand that all the preparation that goes into a smooth flight would go to waste if the pilot failed to pay appropriate attention to the landing. If the pilot doesn’t confirm the landing gear is out and the runway is clear, the pilot could be facing a dangerous homecoming. Why then do real estate investors often neglect the “landing” of their purchase and sale transactions, mindlessly consenting to closing documents that could cause their investment to crash and burn? It’s a mistake we see all too often.
One example is the owner’s affidavit. Title companies often require sellers to sign an affidavit making certain representations to the title company in order for the title company to issue a title policy to the buyer at closing. These forms, typically prepared on what appear to be “standard” title company forms, require the seller to certify under penalty of perjury many of the same facts that the seller refused (or should have refused) to represent to the buyer in the purchase agreement. Worse, the seller is required to indemnify the title company in the event any of these certifications prove untrue. In other words, risks that would be untenable to assume in a purchase contract are suddenly accepted and dismissed without concern on the eve of closing.
Like a pilot verifying its landing checklist, a seller should ensure the owner’s affidavit is narrowly tailored and accurate. The affidavit should be limited to the current, actual knowledge of the affiant. Each of the representations should be independently reviewed by the seller and, in many cases, limited to the facts absolutely necessary for the title company to issue the title policy. Finally, the affidavit should be limited to the specific purpose of issuing buyer’s title policy (i.e. should not apply to third parties) and, where possible, the indemnification should be limited. Each of these protections, which almost all title companies will accept, help limit a seller’s exposure arising from the sale of its property.
Adverse conditions can present challenges even to an experienced pilot. However, with proper preparation and guidance, a smooth flight can be possible. Real estate investors should take the same approach, using caution and careful attention to ensure the documents they sign provide only those obligations which are necessary to get the deal done. With such diligence, a shrewd investor may even receive a groan-inducing half-hearted applause when their deal “lands” its closing.