Transactional real estate law covers the legal aspects of buying, selling, leasing, financing, and developing real property. It includes contract drafting and review, due diligence, title review, escrow coordination, entity structuring, financing documentation, and related negotiations — distinct from litigation over real property disputes.

Due diligence is the process of investigating a property and its title before completing a purchase or investment. It typically includes reviewing title reports, surveys, zoning, environmental conditions, lease terms, financial performance, permit history, and any pending litigation or liens affecting the property.

A letter of intent (LOI) is a non-binding or partially binding document that outlines the general terms of a proposed transaction before a formal contract is drafted. A purchase agreement is the binding contract that governs the terms of the sale, including price, contingencies, closing conditions, and allocation of risk.

Title insurance protects buyers and lenders against losses from title defects, prior liens, encumbrances, or ownership disputes not discovered during the title search. Lender's title insurance is typically required by the lender; owner's title insurance is strongly advisable and customary in California commercial transactions.

A 1031 exchange (Internal Revenue Code §1031) allows investors to defer capital gains taxes when selling investment real property by reinvesting the proceeds into a qualifying replacement property within strict IRS time limits. The exchange must be properly structured, and an attorney experienced in real estate transactions can help with the legal documentation required.

Earnest money (also called a good faith deposit) is a sum paid by the buyer to demonstrate serious intent to purchase. If the transaction fails due to a buyer's breach, the seller may retain the deposit as liquidated damages. If the seller breaches, the buyer is entitled to its return. Specific remedies depend on the purchase agreement terms.

Involving an attorney early — before signing a purchase agreement, LOI, or lease — is ideal for commercial or investment real estate. An attorney can identify unfavorable terms, negotiate protective provisions, review title and environmental issues, and ensure the transaction structure aligns with your legal and financial goals.

Common pitfalls include overlooking title defects or recorded easements, failing to review all contingency deadlines, misunderstanding lease assumptions in commercial acquisitions, inadequate due diligence on environmental conditions, and failing to properly structure the acquisition entity for tax and liability purposes.