From the April 11, 2008, issue of the Wall Street Journal.
In 1984, [Max Weinberg and his wife Becky] paid $300,000 for a five-acre farm that was part of a development, also in Monmouth County, and learned a lesson that Mr. Weinberg hasn't forgotten.
The Weinbergs bought the property, part of a subdivision, from the developer, who initially planned to keep the farm for himself. The developer seemed impressive -- he wore fancy suits and drove a Cadillac -- but he was deeply in debt and needed to make a deal, Mr. Weinberg says. But Mr. Weinberg didn't know any of that -- and he didn't dig into the deed records that might have revealed it. (Mortgages usually are attached to deeds.)
After the deal was done, the seller pulled Mr. Weinberg aside. "You paid me too much for the house," he told him. "I was up to here in debt. I needed the money."
"Why didn't you tell me this 10 minutes ago?" Mr. Weinberg recalls asking.
"That's business," the man replied.
In the end, Mr. Weinberg made money on the deal -- he sold the house for $590,000 in 1997, records show. But he knows he could have had the house for less, and he says he resolved never again to be out-researched on a real-estate purchase. He credits that lesson with helping him in later deals, from his current land, which he bought in a complex transaction involving a land swap with the seller, to a house he's considering buying in Tuscany, Italy, for which he has studied up on wild boar, a local nuisance. (They can burrow, he has learned, but they can't jump.)
"My whole thing has been research," he says. "All the answers can be found in city hall."
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