Lessons From the Spelling Sale: How the Rich Are Different
News broke this week that Candy Spelling, the widow of TV mega-producer Aaron Spelling, found a buyer for her most-expensive-listing-in-America mega-mansion, which had been on the market at $150 million since the Ice Age. The buyer: 22-year-old Formula One heiress Petra Ecclestone, "one of the most spoilt girls in Britain" according to the London tabs, whose daddy, Bernie, is footing the bill for the home (need we say more?)
The deal is working its way through lawyers now -- we common folk have escrow -- and is expected to close in early July. But as any real estate purchaser knows, nothing is a done deal until it's a done deal.
You might ask, how does a transaction of this magnitude differ from an ordinary home sale? Well, having high-priced lawyers hammer out the details versus sitting on pins and needles while the bank approves our loan application is one way. Here are some others.
1. This is a cash deal.
Yeah, we'd all like to be on the receiving end of a pot of cash when we sell our homes, but it rarely happens among the peons. Truth is, it rarely happens among the uber-rich either. What they call a cash deal really means that there isn't a typical mortgage involved. A private company may be funding the purchase, and the purchase may also be structured in a way that stock shares are part of the payment. And you'd better believe that this deal will be structured in a manner that has the least tax implications for both sides.
2. The price is secret.
Let the games begin! The only official places to learn the transaction would be on the title transfer or the property tax records. Title documents don't always include the sales price, and if this is indeed a sale involving a private lender or no lender at all, it likely won't be found there. California homeowners pay a percentage of the for property tax. That said, the home value and the sales price aren't necessarily the same. Confused yet? That's the idea.
Compare that to when Joe Public buys a house. We can all learn how much he paid from these public documents. The best he can do to try and shield it from the prying eyes is buy the property in a blind trust, a tactic often used by celebrities. (Most recently Jennifer Aniston, who bought her New York apartment in the name Norman's Nest Trust, after her pet dog).
So right now, anybody who says they know the price Ecclestone paid is guessing. The only ones who know, besides the parties involved, are the cadre of agents and lawyers, all of whom signed confidentiality agreements. Some blogs are speculating that the selling price was $85 million not $150 million.
3. Don't hold your breath for the garage sale.
Garage sales enable us mere mortals to purge our still-usable-but-no-longer-wanted items and pocket some change. We can expect that Spelling will auction off what won't fit in her smaller digs. Just don't look for her to part with any of her beloved late husband's Hollywood memorabilia.
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