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Who Waves Goodbye to Wads of Cash?

A client was mulling over whether a $20,000 downpayment was enough to accept from a buyer on a $549,000 sale.  “What if they default? Why should I settle for $20,000 rather than $54,900?” 

I reassured him that $20,000 is not chump change to most buyers in his price range, and that it is “quite rare” for people to willfully and voluntarily forfeit their entire downpayment.  “Really? How many total defaults have your seen?” he wondered. I told him about (some of) the particulars of the only two deals in my 29 years of practice where buyers left the money and ran away.

In the first instance, I represented a seller whose buyer was relocating from California to New York for a new job. Buyer put down $15,000 (purportedly from the new employer) and signed the contract while apparently continuing to look for career advancement.  Something apparently more lucrative came through in CA, so he signed a release of the escrow money to the sellers.

In the juicier story, a charming man from Brazil, with the most enthralling of accents, engaged me to represent him. He did a lot of business on Long Island, he told me, and had decided it was more cost-effective to buy a house than to stay in hotels.

Senhor Buyer-from-Brazil put down $24,000 and the transcontinental transaction proceeded smoothly.  The day before closing, he called from Brazil, stating he couldn’t close. When told  he’d be jeopardizing his downpayment, he said, “Estoy me nas tintas.  I didn’t quite understand, so he clarified that he didn’t really care happened to the money (he did put it in writing, as I insisted).

I called the person who referred Senhor Buyer-from-Brazi to me. Without giving away any confidences, I asked if all was OK with his friend.  He gleefully told me that the Buyer-from-Brazil had a wife and kids in Brazil plus a girlfriend in New York. His plan was to live with the NY paramour when working here. However, Senhora Buyer-from-Brazil somehow found out about the shenanigans, and blew his scheme to smithereens!


( 2 comments — Leave a comment )
Apr. 12th, 2011 09:58 pm (UTC)
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Apr. 13th, 2011 11:45 am (UTC)
( 2 comments — Leave a comment )



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