A long time retired resident of the Madison Valley area in Seattle owned two four plexes side by side. The area was ripe for redevelopment. The owners had created a plan for a residential elevatored structure on this relatively small site. The cost and rents, plus the design, did not make the project economically feasible. They had received various unsolicited offers for townhouse development of the site.
We marketed the site for slightly less than $1,000,000 and generated multiple offers in excess of the listed price. After evaluation of all the purchasers we contracted with an experienced town house developer. The offer was still contingent upon building permits and multiple normal development contingencies when we discovered a problem. To cure and document the problem, SCRE accepted responsibility for the oversight and while still contingent, made a substantial contribution to the legal costs for the issue. We also suggested restructuring the transaction to extend the closing, but escalate the base price by an interest rate factor. The bottom line was that the transaction closed and the client materially benefitted by the treatment of some $84,000 as capital gains rather than ordinary income, saving substantial moneys for the client.
