Can we please put this one to rest?
In her most recent Southtown Star column, Kristen McQuery writes that indicted businessman Tony Rezko "walked through the Obamas' million-dollar dream house to give his seal of approval and then, remember, bought a strip of land ...
Can we please put this one to rest?
In her most recent Southtown Star column, Kristen McQuery writes that indicted businessman Tony Rezko "walked through the Obamas' million-dollar dream house to give his seal of approval and then, remember, bought a strip of land next door, erected a fence and probably saved the Obamas about $300,000."
Let's be clear: while the Obamas bought their Chicago house at $300,000 below the original asking price, there is no evidence that the Rezkos' simultaneous purchase of the adjacent lot had anything to do with the amount the Obamas paid.
During his November 2006 interview with the Sun-Times about the purchase, Obama explained that the price he paid for the house was the highest bid received by the sellers, who wanted to unload the properties quickly:
Q: Why is it that you were able to buy your parcel for $300,000 less than the asking price, and Rita Rezko paid full price? Who negotiated this end of the deal? Did whoever negotiated it have any contact with Rita and Tony Rezko or their Realtor or lawyer?
A: Our agent negotiated only with the seller’s agent. As we understood it, the house had been listed for some time, for months, and our offer was one of two and, as we understood it, it was the best offer. The original listed price was too high for the market at the time, and we understood that the sellers, who were anxious to move, were prepared to sell the house for what they paid for it, which is what they did.
More after the jump ...
In February, Bloomberg reported that, according to the Obama campaign, the previous owner of the house confirmed that the Obamas' third offer of $1.65 million (after earlier offers of $1.3 and $1.5 million) was the best they received on the house:
[Obama spokesman Bill] Burton said a campaign adviser discussed the sale with [previous owner Fredric] Wondisford by phone and followed up with an e-mail to Wondisford repeating his points. Wondisford responded: ``I confirm that the three points below are accurate,'' according to the e-mail, provided to Bloomberg News and authenticated through records shown by the adviser.
The e-mail says that the sellers ``did not offer or give the Obamas a `discount' on the house price on the basis of or in relation to the price offered and accepted on the lot.'' It also says that ``in the course of the negotiation over the sales price,'' Obama and his wife, Michelle, ``made several offers until the one accepted at $1.65 million, and that this was the best offer you received on the house.''
Wondisford has declined to talk directly about the matter.
Three BidsThe Obamas submitted three bids: $1.3 million on Jan. 15, 2005; $1.5 million on Jan. 21; and $1.65 million on Jan. 23, according to a copy of the sale contract shown to Bloomberg News.
When media figures like McQueary and the Tribune's John Kass repeat the claim that Obama received a "discount," their rationale seems to be this: the owners must have agreed to sell the house at $1.65 million because the Rezkos bought the adjacent lot at the full price of $600,000. The underlying premise here is that Rezko could have tried to bid down the price of the lot -- like the Obamas did with house -- but chose not to, thereby making the owners more amenable to the Obamas' offer.
But there's one little problem with this: according to Obama, when Rezko first became interested in the lot, there was already another individual with an option to buy it at the asking price of $600,000. So unlike with the house, it would have been tough for Rezko to bid that price down.
For more on this, check out Archpundit and Media Matters for America. Both have repeatedly pushed back against the assertion that Obama received a $300,000 "discount" on the house thanks to the Rezkos' purchase of the lot.