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KEEPING A DEAL ALIVE DESPITE FINANCIAL OBSTACLES AND DELAYS

The Result: In the face of volatile interest rates and a prolonged loan assumption process where buyer’s financial obstacles escalated over a two-year time frame, Kiser Group resourcefully navigated deal fatigue and a key investor’s withdrawal to successfully close the transaction, satisfying clients’ expectations.

Challenges and Solutions:

In real estate transactions, time is often the biggest adversary. Over 24 months, this transaction encountered hurdles stemming from fluctuating interest rates and a prolonged loan assumption process. And while these conditions would have defeated most brokerage teams, Kiser Group saw potential and persevered to deliver a successful close.

Significantly increased loan penalty:

Despite having reached agreement between the parties over sharing the prepayment penalty on existing debt, plummeting interest rates threatened to derail the transaction by increasing the prepaymet penalty by 800%. Financial struggles led to prolonged delays and deal fatigue began to set in.

Patience and pivot to created solutions:

Kiser Group’s patience and stick-to-itiveness kept the parties at the table negotiating various possible financing scenarios until the parties could agree and the deal could get done. Although the escrow was contentious at times due to the long time frame and changing needs and demands, Kiser Group’s ability to pivot, suggest creative solutions, and keep the parties on a critical path led to successful closing.

Lost investor:

After a year-long effort to assume the seller’s loan, the buyer finally received approval, paving the way to close the deal. However, because of the protracted process, one of the buyer’s investors withdrew, leaving a shortfall of over $1M.

Securing private financing:

Kiser Group used its extensive network to find a private investor interested in covering the shortfall to facilitate the transaction, saving the deal from termination, and delivering the buyer and seller a successful close.

Author:

Staff