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September 22, 2014
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Why the Buto offer is not higher

Daniel R. Cawley

Therefore, the Weiden offer is the highest offer, because when viewed on all its terms, it leaves the SWSB still owning $100K worth of real estate, while at the same time only “shorting” the district by $9,000, the difference in the raw numbers as between the two contenders. If Weiden is permitted to develop the school into the wonderfully positive concept he envisions, the additional 14 acres will also increase in value dramatically.

Here is an illustration of my point: Imagine that you are buying a new car from me for $25,000. My competitor offers you “the same car” for $24,000. Howev3er, the car he is selling to you has no transmission and no tires. To remedy that, you would need to spend $5,000 for a motor and four tires. Is he truly selling you the same car for a lesser price? Of course not. The two cars are not the same, and the difference in the two prices is made irrelevant by the high price of the necessary repairs and additions.

Financing versus all cash

Even if Buto does get the contract, great care should be taken to ensure his down payment is not refunded as was done with Mr. Kang’s last offer. The newspaper states that if Buto walks away, his $76,000 (!) down payment is kept by the school board. That would only happen if precise language is inserted into the contract. So once again, the difference in the two offers might also be explored on this level. Are both buyers agreeable to all or at least part of their down payment being made non-refundable?

With regards, to financing, the article state that Buto’s is an all-cash offer and Weiden’s is not.

First of all, simply because someone shows you a bank statement with a million dollars in it doesn’t mean they are verifiably solvent or able to use that entire sum to close title. The money could be parked there by a friend or relative simply to convince a skeptical seller to choose one buyer over another. That money might already be secretly pledged or liened by the bank holding it. The money might also have to be used for some other outstanding loan, about which the SWCB is unformed. Has the source of the money been proven? Have there been any background checks done on the Butos? I believe no background check was ever done with Mr. Kang, and look at what happened in that transaction.