Inside the Rise of Sell-And-Go-Hard Transactions

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.

“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)