A verbal is a good sign, never a commitment

The Monday that never came

This one still bugs me, and it's the reason I flinch when someone says the word "verbal."

The property had a known environmental issue, so the financing was the whole ballgame. We had it. Or we thought we did. The lender gave a verbal yes, the attorney said he'd write it up and get it signed Monday, and everybody relaxed. Handshakes all around.

He had a heart attack that Saturday and passed away.

And just like that, the thing that was going to make the deal real, the actual written, signed approval, didn't exist. A verbal from a good man who fully intended to follow through, and then life did what life does.

I'm not telling you that to be morbid. I'm telling you because it taught me two rules I haven't broken since.

What to take from it

One. A verbal approval is a good sign, not a commitment, especially on anything with an environmental question, where the report can move the financing after everyone has shaken hands. Keep your contingency until the report and the written approval are both in your hand. Two. Never lean your whole deal on one person and a piece of paper that only exists in the future. Get it in writing while you can. Deals don't fund on good intentions.

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