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Let’s Not Make a Deal

Buyers and sellers chatting during a transaction is usually a very good thing. I believe the more contact they have, the less apt they are to jump to conclusions or end up in litigation.

 

In one case, however, the parties spent the better part of one month discussing how best to circumvent the sellers’ contractual obligations to obtain municipal approval for the bathroom and kitchen they added in the basement, and to ensure that the egress from the “rec room” (nowadays known as a man cave) satisfied fire regulations.

 

 

Post-contract, someone advised the sellers how costly and lengthy the process might be, so they called the buyers and played the Did you realize your taxes are going to go up when we alert the town? card.

 

The buyers did know, because I told them, but were all ears when the sellers sweetened the deal. “How about we give you $7,500 at closing and don’t get the town involved?”

 

The buyers called me, all excited to be getting such a huge chunk of cash plus save on yearly taxes. I advised them strongly against the plan, cautioning that even if they were willing to risk the insurance and criminal nightmare of someone being harmed or trapped during a fire, their lender wouldn’t allow it.

 

Crestfallen, they called the sellers, who scoffed and played the Are you a man or a mouse? card.  My clients contacted me again and said, “We want to make the decisions, not let the bank dictate what we do.”

 

OK, I responded, you can certainly stand up to the bank. However, you’ll first need to stop by my office to sign an acknowledgment that you understand the financial and possibly criminal consequences that could surface from unapproved subterranean space. Further, as you'll be required to sign an affidavit at closing that there are no "side deals" with the sellers, you’ll have a choice to make at the table. Will you commit bank fraud plus still have the peril of fire in the back of your mind, or have a clear conscience about the affidavit and therefore decline the under-the-table cash from the sellers?

 

The buyers choose door #3, insisting that the weaseling sellers fulfill their vault vows.

 

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