Mosaic Condos: How Low Can You Negotiate the Price Down?
At the time of bankruptcy, the developer of Mosaic Towers (Almeda North Tower) had 71 units under sale contracts with deposits. If you are one of these deposit holders, one of the first things to find out when the developer files for bankruptcy is whether the sale will still close.
In this case, Almeda North Tower has gotten provisions to sell these units to buyers free and clear of liens. Next step, what is the minimum price for which they can sell the units?
The developer had negotiated with its lender, Corus Bank, for a lower release price. As we have discussed in earlier posts, the release price is the amount required by the lender to release its lien on a unit. Right now, Corus Bank agreed to release its liens on a unit as long as the developer gets at least 88% of net sales proceeds (i.e., contract price minus seller’s real estate taxes per unit). Any lower and the bank can disapprove of the sale.
For those of you who want to negotiate a sweetener for the deal, this is the price floor for the moment.
