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I wanted to share a recent experience that makes me want to emphasize how important is it to “always get it in writing”. I have been in the process of purchasing a mobile home park over the last month. I had originally tentatively agreed to buy it for 100k with a portion of it to be seller-financed. I was supposed to meet with the guy, and he ended up passing away unexpectedly. I was now in talks with his widow. She was not interested in seller-financing so we negotiated a price of 75k. I tentatively agreed on that price. One of the homes ended up being sold and moved out and there was a zoning issue. We both met with the zoning coordinator who assured us that homes could be moved in and out, just no new lots could be created. After all that we tentatively agreed on a price of 70k and she’d throw in a fixer-upper house and a small lot. We set the time to sign the contract with the banker at 2pm last Monday. I talked with my mentor about everything and he told me to make sure I got what the zoning director said in writing. Needless to say, I called the zoning director at noon on the day we were supposed to sign and asked to get everything in writing. She said she could not get it in writing because she was looking into it further. I postponed the signing. I got a call from her this morning and she said she talked with the city attorney and some other people and the ruling was that homes could not be moved into the park because of the zoning!
I was literally 2 hours away from signing this thing, but the fact that you cannot move homes in makes it a dying park. It will just slowly die off and there is no future income potential. I would have been pretty screwed.
Also, the fact that I only gave verbal offers and she tentatively accepted them shows that the seller should have gotten it in writing as well, since I would have been locked in and the park would have been my problem! This is why people typically put down some sort of earnest money when buying real estate so the seller gets some compensation if the buyer backs out.
The moral of the story is to always get it in writing! Even on a napkin at a lunch meeting, get something in writing if you want to guarantee it will go through. Verbal agreements and promises mean nothing, signed documents hold up in court. Remember to DYODD and to always get it in writing!