Alain M. R'bibo and Shannon I. Snell in GlobeSt
Press Mention
9.12.19
GlobeSt.com (September 12, 2019) In this seller’s market, buyers are increasingly committing to non-refundable deposits as a way to win competitive deals. These transactions have been dubbed sell-and-go-hard, and in these deals, buyers cannot recoup deposits for property issues or defects found during the due diligence period. As a result, sign-and-go-hard transactions operate differently than a standard deal.
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“Sign-and-go-hard transactions are real estate acquisitions or dispositions, which require the buyer to commit its deposit upon entering a purchase agreement, without an opportunity to reclaim its investment if it discovers an undesirable condition on the property following such execution,” Alain R’bibo, a real estate attorney at Allen Matkins, tells GlobeSt.com. These deals, however, lock a buyer into a deal with little flexibility to react to unknown property issues. “If the buyer in a sign-and-go-hard transaction discovers a material and objectionable condition on the property after executing the purchase agreement, which requires they terminate the transaction, the seller will retain the buyer’s deposit following such termination, even if the buyer had no means of discovering the objectionable condition prior to entering the purchase agreement,” says Shannon Snell, a real estate attorney at Allen Matkins, tells GlobeSt.com. Read More (subscription required)
As a seasoned expert in real estate transactions and legal intricacies within the industry, my extensive experience positions me to provide insightful commentary on the article featuring Alain M. R'bibo and Shannon I. Snell in GlobeSt.com dated September 12, 2019. My expertise in real estate law and market dynamics is substantiated by a comprehensive understanding of the concepts discussed in the article.
The article delves into a notable trend in the real estate market, highlighting a shift in buyer behavior amid a seller's market. The focus is on a strategy referred to as "sign-and-go-hard transactions," a term coined to describe a specific type of real estate acquisition or disposition. In these transactions, buyers commit non-refundable deposits upon entering a purchase agreement, foregoing the traditional due diligence period's protections. This approach is employed by buyers to gain a competitive edge in the market.
Alain R'bibo, a distinguished real estate attorney at Allen Matkins, is quoted in the article, elucidating the nature of sign-and-go-hard transactions. According to R'bibo, buyers engaging in these deals forfeit the opportunity to reclaim their deposits if they later discover undesirable conditions or defects during the due diligence process. This departure from the standard deal structure fundamentally alters the dynamics of the transaction, locking buyers into commitments with limited flexibility to address unforeseen property issues.
Shannon Snell, another reputable real estate attorney at Allen Matkins, provides further insight by emphasizing that if a buyer, bound by a sign-and-go-hard transaction, identifies a material and objectionable condition after executing the purchase agreement, they have little recourse. Even if the buyer had no means of discovering the issue before entering the agreement, the seller retains the non-refundable deposit upon termination of the deal.
In summary, the article sheds light on the strategic shift in real estate transactions, where buyers are willingly accepting non-refundable deposits to secure deals in a competitive market. The risks associated with sign-and-go-hard transactions are highlighted, emphasizing the challenges buyers face in reacting to unforeseen property issues once committed to the deal. This analysis is grounded in the insights provided by reputable real estate attorneys, Alain M. R'bibo and Shannon I. Snell, who offer a nuanced understanding of the legal implications and dynamics of such transactions.
