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appraisals, but not the discounted price that the
partnership actually paid for the property.
EPIC negotiated the purchase of the subject properties
on behalf of EA 83-XII and EA 84-III from five developers,
Fox & Jacobs, Raldon, Babcock, U.S. Home, and Pitman &
Japhet. The contracts between EPIC and each of the sellers
followed a similar pattern. Each contract set forth a
purchase price for each property, referred to herein as the
contract price, that was based on the prices that the
seller had received from sales of similar properties to
individual retail purchasers. The contract provided that
the seller would "pay" an amount negotiated between EPIC
and the seller called the rental deficit contribution. The
seller agreed to "pay" this amount to the purchaser, the
limited partnership. The contract further provided that
the seller would pay to EPIC a commission of 6.8 percent of
the contract price and, under certain conditions, would
prepay rent to the purchaser.
In negotiating these contracts with EPIC, each seller
was principally interested in the amount that it would net
after the above discounts and fees. A representative of
one seller, Babcock, testified that his concern was the
"bottom line" or "minimum number" and that he permitted
EPIC to structure the discounts and fees.
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