Uncategorized July 31, 2011

Raise the roof?! A buyer takes head-on fears of the debt ceiling debacle

An investor friend/client of mine came up with what I thought was a good, straight-forward approach to his concerns that the August 2nd debt ceiling date could bring unpleasant and unwanted surprises to his assumptions regarding his loan package: He simply asked me to draft language that expanded and better specified the rights and options typically provided by our standard Financing Addendum.

We specified that if, at any time before closing, he doesn’t like what he sees from his lender, he has the sole and exclusive right to cancel, with earnest money refunded wholly and immediately. The seller owns several town homes, is likely accustomed to deals flipping, and wants to show activity to the marketplace. So, the deal was accepted.

It’s a good lesson: If you don’t like a deal under commonly held assumptions, change the assumptions. Ask for what you want. You might get it.