Luxury Insider: When Real Estate Becomes Fantasy Land

Real estate is a fascinating business. I mean it, really. Need some proof? Well, how many businesses are there that you can talk about every day and all day? With the spouse at dinner time, colleagues from the office around coffee, neighbors over barbecue, friends at a cocktail party, kids’ parents at the baseball field.…. Can we ever stop talking about it? Forget it. Even when we try, new and addictive TV “reality” real estate programs are reminding us that it is only competing with the weather as people’s favorite conversation topic.

As a Realtor, I have sold real estate, managed offices, ran companies, owned some and, along the way, heard thousands of hilarious or plain weird stories from thousands of perfectly sane professionals. Nearly every month, my wife presses me to write books on the subject. I always say I will, but I don’t and probably will not, although something is missing on the shelves of bookstores. There are lots of interesting titles dealing with the “how-to’s” of the business for agents, or the quickest ways to make a million with no cash down, or how to showcase a home to get top price, etc, but nothing on the fun stuff.

OK, I’ll make an exception today. Just one story. It’s crazy but it’s clean. This one has the particularity of being seemingly weirder than weird and, at the same time, extremely serious. Bigger than life in any case, whatever that means.

How can I start?… Once upon a time?… No, let me put it in the form of a question: If I mention the mega sum of $50,000,000 and further mention a house on the French Riviera in the same sentence, what does this simple riddle evoke to you? Let me guess what your answers might be:

  1. A magnificent villa at the edge of a Mediterranean cliff with an unobstructed view of the sea and the islands on the horizon?
  2. A 3,000 sq. ft. apartment on the top floor of a building in Cannes, overlooking “La Croisette” shopping heaven and one of the most beautiful beaches on earth?
  3. A 4 story townhouse in St. Tropez, over the yachts harbor and steps away from a myriad of fashionable restaurants and clothing boutiques tailor-made for the Jet Set?
  4. A village in Provence or a town in the back country?…

You are warm, yet not that close! You got something right though: the correct answer looks like choice #1: “a magnificent villa..….”. Where you blew it is when you assumed that you could get this kind of trophy for “only” $50M. Who are you kidding? You think you can get something for nothing?

No, $50M was not the purchase price, it was just the…..Deposit! Yes, the deposit. Merely about 10% of the price tag of $475,000,000 (370M in euros)!….. It is a true story. Now, it’s not even the “best” part of the story. The best is that the “buyer”, a very-very wealthy Russian businessman whose fortune is ranked #24 according to Forbes, decided to cancel his purchase of “Villa Leopolda”. He asked for his deposit back. Fair enough. Sounds logical. The two other options were a bit fatalistic, not to mention unwelcome: agree to lose $50M, or agree to add the nifty sum of ….$425,000,000 to complete the purchase of a house he no longer wanted! What is a man to do?

The courts rendered their decision, after long tribulations. Ultimately they said “NO” to the refund of the deposit. He had to forfeit the whole thing. Ouch! The argument they presented is that the buyer, who is at the head of a famous investment fund, was acting as a knowledgeable professional and, in such capacity, he was not entitled to his money back.

“Villa Leopolda”, as you can imagine based on the price, is a crown jewel. It is considered the most expensive villa in the world. It may also be the most beautiful. The location is divine: in Villefranche-sur-Mer, smack in between Nice and Monaco, spreading on 20 acres of heaven and surrounded by the blue Mediterranean! Are you falling in love?

There is something of a happy ending to this story…. “Villa Leopolda” might still be available! Lucky you, you have a chance to be the new proud owner! Be “my” guest!

Happy Thanksgiving!

By Alain Pinel