The advent of ‘schmuck insurance’
Even Donald Trump now routinely seeks assurances from buyers of his properties not to resell them quickly.
“A man in my position can’t afford to be made to look ridiculous!” exclaims fictional movie mogul Jack Woltz in The Godfather. A similar concern is driving the latest trend in real estate, said John Gittelsohn in Bloomberg.com. With prices rising again, many sellers want buyers to promise that they won’t resell the properties quickly—presumably for a fat profit. Real estate pros call such promises “schmuck insurance,” from a coarse Yiddish term meaning, charitably, “jerk.”
Donald Trump, for one, says he now routinely seeks assurances that buyers of his properties won’t flip them, thus making him look bad. After all, he must preserve his image as a shrewd dealmaker. “I view schmuck insurance as having a covenant that you can’t sell for a five-year period or greater,” he explains.