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6 years ago, I helped the owner of a large automobile repair shop to sell his 9 bay building on one acre of land, including equipment and inventory. There are not many people who want to buy an auto repair business. My advertising found a gentleman with repair experience and money for a down payment. We got help fronm Dennis David, and SBA loan expert. We wrote the contract to include a “Non Realty Items Addendum” form, to include the equipment and inventory in the sales price.
I represented the Buyer and Seller.
The buyer hired a licensed building inspector and also an environmental consultant. The bank hired an appraiser. After a successful transaction the seller retired.
4 years later, that same seller phone and asked me to sell another auto repair shop. He retired and six months later decided to work again.
He bought a building and remodeled and upgraded the building.
I agreed to help and it took 8 months go find a buyer. The buyer toured the property after normal business hours.
The buyer then had questions which seller agreed to answer face to face.
We should understand that the buyer gets the same net net funds regardless of buyer paying cash or getting a mortgage loan.
The buyer asked the seller if he would accept a price 90% lower than the asking price. Seller asked a question with one word which commited him.
He ask “Cash?” I think he could have gotten 5% higher price. If the seller had not negotiated face to face.
Buyer wrote a contract which required a bank loan and needed a bank which would also finance the equipment and inventory.
The current lender also had a separate loan for equipment and inventory.
But the buyer wanted to use a different bank.
Here comes the challenge.
Remember he had hired me to sell the previous property. Unfortunately the current owner/seller did not hire me when he bought the property 3 years ago. Because he knew the seller and just made a deal.
The environmental study indicated that the retail convenience store next door to the auto repair shop also sold gasoline and suspected that the tanks leak to the auto repair shop.
It gets worse.
I represented the seller and the buyer represented himself. When I am writing a purchase/sale contract, the seller phones to say he is now finally speaking with his estranged nephew.
His nephew had 15 years experience as a real estate agent and wants his nephew to over the transaction and asked me to report to his nephew, who lives in Las Vegas. On a telephone conference phone call, his nephew agreed to handle all communications with the buyer, whose office is 5 minutes from my office.
I write the contract with a drop dead date tomorrow, and seller took it to buyer office. I had expected nephew to email it to buyer for signature, today.
It gets signed after the drop dead date. Nevertheless, buyer deposits earnest money at the title company, which makes the contract good regardless of contract date. (it is a fine legal point).
I phone nephew in Las Vegas to discuss fine points of the contract and process of buyer due diligence. Buyer nephew get mad at me for acting like I know everything and give me 8 “F” bombs directed at me personally.
I suggest we hang up and continue the conversation tomorrow. We did not.
The Buyer lender would not loan due to previous environmental study with a discussion about possible pollution from the convenience store on the continguous land.
The Nephew and I do not have further discussion nor conversation.
I get my info updates from the title company.
They spoke to the title company and arranged title company attorney to write a loan doc for seller financing, because a bank would not loan on a suspected polluted property.
It gets worse.
Several days before final closing date, I get a certified letter from an attorney representing seller with several demands.
We spoke and attorney suggested that seller would make a complaint to the Texas Real Estate Commission about my services unless I reduce my sales commission from 5% to 1%.
If he had hired a business broker, it would have been 10% sales commission.
I wish he had hired me before he purchased a polluted property 3 years ago, which is hard to sell without expensive land remediation.
So today, it is Not likely that the convenience store owner had the funds to remediate the land of the auto repair shop.
So he has to seller finance and not get his cash this week.
I have never had a complaint nor a law suit in 24 years.
However, I calculate my value of time to fight, and decide to negotiate a 2 % commission. We both signed a written agreement.
The deal finally closed
I hope the seller gets the medical attention for bipolar condition.