Quote:
Originally posted by Moses
At your first suspicion that the lot was not buildable, you should have told the builder. Instead, you waited 7 weeks.
Now, you are looking at an opportunity to profit from your own mistake at the expense of a valued client. Is that about right?
If you value the builders business, sell the lot at market and forward the profit with a note to the builder. You will have enhanced your reputation and created invaluable goodwill.
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Moses, re-read the description and previous comments. My understanding is that the builder is receiving what he wanted and agreed to previously -- the sale had just never closed. The builder is happy with his $35,000. Jim C. was assuming the risk during those years the property hadn't closed -- if the property value had gone down, the builder could have still demanded the $35,000 and Jim would have had to eat the difference if he resold the property.
Additionally, you just can't go around and be "giving" $35,000+ to people. The IRS likes to get their cut in every transaction. The more I think about it, the more I don't like the idea of Jim trying to be "nice" and selling for under fair market value. (Read my previous comment.)