Questions About A Business Disagreement

Questions About A Business Disagreement

Dear Bro. Waddey:
If you believe you are a wise person, can you please help me with this scenario of conflict. Jack owned a new house worth $ 200,000.oo and he was renting it to a friend (Dan) in the church. One day Dan asked Jack if he could buy the house and so John agreed. Because Dan was new to the country Jack decided to give him $30,000. off of the appraised value. So the price was set at $ 170,000 and they agreed to the deal. Because they were friends, Jack and Dan did not set a specific date for when Dan would need to obtain financing but Jack was expecting it to be 3 to 6 months at most. However as time went on, Dan was unable to get financing but Jack was not concerned because they were good friends and he assumed that Dan would respect that properties do appreciate in value. But then 1 ½ years later, (when their friendship had cooled), Dan obtained adequate financing. However now the house was appraised at $ 270,000. Dan then went to Jack and insisted that he sell the house to him for $ 170,000. Jack felt that the $ 30,000. that he had already given him was a very generous gift, and that Dan should really take into consideration that houses and land appreciate in value. Dan strongly felt Jack was in the wrong.

Here are my questions:

Is greed involved here ?
Could they both be greedy ?
In your opinion which one more, Dan or Jack
Is it possible for a person to be greedy and not know it ?
If so, how can God condemn the greedy ?
In short, how could this situation be resolved ?
- Sally

Dear Sally:
Although I make no claim to great wisdom, I have been studying, preaching and teaching God's Word for some 50 years. The questions you raise are the kind of common, everyday questions about ethics that people living in the real world have to deal with. Following are my perceptions regarding this unfortunately situation.

First I remind you that Christian ethics demand that I must treat others in my business and personal dealings just as I would want them to treat me (Matt. 7:12). While absolute fairness is expected in all my activities, it is especially the case when Christians are dealing with fellow-Christians (Gal. 6:10). We are all children of the same Father, brothers and sisters in Christ (Gal. 3:26-27). Our business dealings should reflect this.
Jack is to be commended for his generosity to his friend Dan by offering to sell his the $200,000 home for $170,000.
Jack was very patient with Dan and gave him far more than the ordinary amount of time to secure his financing .
Since Dan could not secure the funds to purchase the house it remained John's and as all other property in the neighborhood it accrued in value. That increased value was Jack's not Dan's, since he was a renter of Jack's property.
When after a year and a half Dan finally was able to secure financing for the home he expected to purchase it for the price at which it was valued in the past. This he has no right to do. It is Jack's property. His money is invested in it. Just as money in a bank grows from interest, his investment in the house has grown. Dan has no right to expect that Jack give him the extra $100,000 the house is now worth. If Dan was able to pay Jack $170,000 for the house he could turn around and sell it for $270,000, at Jack's expense. A similar parallel would be if I had bought a 1965 Mustang car for $2,800. Over the years it has become grown in value since auto collectors want those models. Today it will bring $25,000 on the market. If you asked to buy it and I agree, it would be foolish and unreasonable to think you should pay no more than the $2,800 I paid for it 40 years ago.
Jack is not being greedy. The house is his, he is under no obligation to sell it. Any property is priced and taxed at its current market value.
Dan is being unreasonable to ask such a thing. His motive may or may not be greed. $170,000 may be all he can afford. It may be the most he can borrow. He may not understand how real estate is valued. But he may be trying to take advantage of a friend.
To resolve the situation, Jack should have the house appraised and present that to Dan. Or Dan should go to a real estate office and ask them what the house is worth? If Dan does not wish to pay that amount he should realize he waited too long and now must look for some other home to purchase. Or Jack may decide it is best to cancel the deal since Dan is unhappy with the price. It is not wise to enter into a business arrangement with an unhappy buyer.

If both are Christians, they may wish to invite a small group of three older, wiser Christian men, whom both respect, and ask them to arbitrate the problem. This is Paul's recommendation in I Cor. 6:5.

Back -- or go -- Home