DVC Resale Contract Advice Needed

[kcall13]

I currently have an offer for re-sale points at Poly and frankly I got a great deal. I am dealing with the DVC Resale Market and have asked for some changes to the agreement they sent to me (which specifically and only benefits them should my deal fall thru as they -- not seller -- get to keep the deposit). They are refusing to ask the seller to OK the change I asked for. I am asking for a funding contingency - the agreement specifically states the "sale is not subject to funding approval".

My Rep has told me that it will only take 2 days to get a funding commitment so I should just sign it and hold on to my deposit until it comes (which could result in a late deposit giving seller option to back out and I lose my deposit). If it only takes 2 days and everyone gets approved what is the issue in providing the funding contingency? hmmmm

Last message from Agent is sign as is or they are telling seller I have withdrawn so he can relist. They will tell seller I have withdrawn (untrue) vs asked for a change to the agreement? Highly unethical in my opinion and I thought I was dealing with Real Estate Agents. I really want my points but I am not going to sign an agreement and not adhere to the terms or putting my deposit at risk should there be any issue with my funding. Has anyone had any issues with unethical agents? This company had good rating so I am surprised that this has been my experience. Should I walk away from this given agent is not above board? I really want my points ....

 

[tnicks]

If the sale is subject to funding approval of should say so. I don't think you'd bring unreasonable and I've stated my opinion about the broker recently elsewhere, so I'm not too shocked by this story. I think you need to weigh how good the deal is vs how confident you are in your ability to secure funding. I remember working with dvcsales and they modified the contract until I was happy with the wording.

 

[ELMC]

I'm sorry to hear that you are in what you feel to be a difficult position. It sounds like the broker has provided you with an option on how to proceed - unfortunately it is not to your liking. If you have asked for changes to the standard agreement that they are not willing to accommodate and you terminate the deal because of this, then they are being forthright in telling the seller that you have withdrawn from the deal. I would be careful accusing the agent of being "not above board" as it doesn't sound like that is the case to me. Your assertion that they get to keep the deposit should the deal fall through is not entirely correct, either. They would receive half of the deposit and the seller would receive the other half.

You have to do what you feel comfortable with, but I'm seeing a few red flags here pertaining to your position, not the broker's, and I wonder if you wouldn't be better off backing out. Buying a resale contract can be a very simple transaction. If it's not then I think it is worth asking yourself why. Good luck!

 

[tnicks]

I'm sorry to hear that you are in what you feel to be a difficult position. It sounds like the broker has provided you with an option on how to proceed - unfortunately it is not to your liking. If you have asked for changes to the standard agreement that they are not willing to accommodate and you terminate the deal because of this, then they are being forthright in telling the seller that you have withdrawn from the deal. I would be careful accusing the agent of being "not above board" as it doesn't sound like that is the case to me. Your assertion that they get to keep the deposit should the deal fall through is not entirely correct, either. They would receive half of the deposit and the seller would receive the other half.

You have to do what you feel comfortable with, but I'm seeing a few red flags here pertaining to your position, not the broker's, and I wonder if you wouldn't be better off backing out. Buying a resale contract can be a very simple transaction. If it's not then I think it is worth asking yourself why. Good luck!

I disagree that the broker is being honest here. Every broker I ever worked with asked if funding was required. It should have been in the official contract, unless it was not initially disclosed that funding was required. Assuming it was, the fact that kcall was advised to more forward without a funding contingency is unethical in my mind.

 

[JETSDAD]

What difference does it make to you if the broker gets the deposit instead of the seller if you fail to close? If I have a listing agreement with a seller those may be terms we have agreed upon and you really would have no place attempting to change the terms of our agreement. Unless of course I'm totally misunderstanding something here.

 

[tnicks]

What difference does it make to you if the broker gets the deposit instead of the seller if you fail to close? If I have a listing agreement with a seller those may be terms we have agreed upon and you really would have no place attempting to change the terms of our agreement. Unless of course I'm totally misunderstanding something here.

I think they simply don't want to lose the deposit if they do not secure funding. The contract currently states there is no funding contingency.

 

[JETSDAD]

I think they simply don't want to lose the deposit if they do not secure funding. The contract currently states there is no funding contingency.

I do agree that if a buyer needs financing then there should be a contingency. If the change to the deposit is simply to change what happens upon failure to close once it is firm, then I'm not a fan of trying to change that.

 

[ELMC]

I disagree that the broker is being honest here. Every broker I ever worked with asked if funding was required. It should have been in the official contac, unless it was not initially disclosed that funding was required. Assuming it was, the fact that kcall was advised to more forward without a funding contingency is unethical in my mind.

If you read my post carefully you will see that I didn't say they were being honest in the transaction. I don't know that they were or they weren't, none of us do. What I said was that the OP should be careful in accusing the broker of not being above board. Furthermore, it would be wise of us to refrain from jumping on the bandwagon as you seem to be doing; we are not involved and we don't know all the facts.

This is the internet and I get that the modus operandi is for someone to complain and everyone else to join in the witch hunt. All I'm saying is that we shouldn't do that here. The way to proceed for the OP is to speak directly to the agent (not email) and either form an agreement on how to best proceed that everyone is comfortable with or to back out of the deal. That is the advice they are looking for and it would be a shame if this thread turned into a bash session.

 

[ELMC]

What difference does it make to you if the broker gets the deposit instead of the seller if you fail to close? If I have a listing agreement with a seller those may be terms we have agreed upon and you really would have no place attempting to change the terms of our agreement. Unless of course I'm totally misunderstanding something here.

The implication is that the broker is acting only in their own best interests, and not those of the buyer. That is what I inferred, anyway.

 

[tnicks]

I do agree that if a buyer needs financing then there should be a contingency. If the change to the deposit is simply to change what happens upon failure to close once it is firm, then I'm not a fan of trying to change that.

I'd agree.

 

[disney11fan]

I disagree that the broker is being honest here. Every broker I ever worked with asked if funding was required. It should have been in the official contract, unless it was not initially disclosed that funding was required. Assuming it was, the fact that kcall was advised to more forward without a funding contingency is unethical in my mind.

Securing funding. Don't you have all the funds up front. I'd question why are you buying something that you don't have the money up front. Time to re think.

 

[ELMC]

I do agree that if a buyer needs financing then there should be a contingency. If the change to the deposit is simply to change what happens upon failure to close once it is firm, then I'm not a fan of trying to change that.

I'm wondering two things. First, if the buyer knew they needed funding did they include that as part of their offer and/or why was that not a part of the original contract? Second, what is the timeline here? The reason I ask is because if the lender is saying approval takes two days yet the OP is saying that would take them past the deadline, something is not right here. Typically you have seven days to execute the contract. Not to mention the ten-day recission period that is Florida law and is baked into all the contracts. I'm not seeing the problem here. Hopefully, the OP can weigh in with some more information.

 

[kcall13]

What a ridiculous comment -- for the same reason people take auto loans and home loans when they don't have the funds up front. That said I will have the funds in a short amount of time but I need to close on my deal by December because I need to be able to book at 11-months to get my reservation -- for my wedding!

I am new to DVC and I asked for them to list all of the resorts I can use and one other minor change but backed off when he gave me an issue now I just want the funding contingency. I have been told the lawyer don't allow any changes and not to worry about the legal mumbo jumbo. I really really don't want to lose my deal -- again Wedding reservation needed but I am extremely skeptical that agent has been honest about there never being funding issues yet unwilling to change the funding contingency terms. Certainly don't want to talk to him on the phone at least I have a written record of this situation should I need it.

Agent:

"First and foremost, if you feel there was a misunderstanding in my written communications, I do apologize. I never intended to provide you advice that could be construed as legal.

Receiving a copy of the contract to secure financing is part of the Monera process. As I indicated, the Monera loan approval process is immediate. Returning the contract and escrow payment to us is part of our process and independent from Monera.

The way you outlined the situation was that at any time up until the contract closes, if you did not receive the loan type you wanted, you could cancel the contract and seek escrow reimbursement. Perhaps that was our misunderstanding.

Against this background, DVC Resale Market will not be amending the contract for a finance contingency as you have requested.

Please let me know if you have any further questions!"
_____________________________________________________________________________________________
My response:

"Andy this is not DVC Resale Markets Contract it is a contract between the buyer and seller and you are supposed to be acting as an agent for both parties. It is unethical for you to have advised me to sign this agreement and hold back my deposit. It is extremely unethical for you to decide for the seller what they will agree to and not bring my request to them for a decision directly. This is a large purchase and I want protection should I not get approved for funding and or the funding estimate is not what was represented – I have no control over this decision and am unwilling to put my deposit at risk and subject myself to liability on a purchase I cannot make today without the funding.

Now you have told me I would have a funding commitment in a matter of two days so I am comfortable with changing the language to reflect a time limit to secure adequate funding or withdraw. 5 business days should be sufficient (since again you say it will only take two days). This seems a reasonable compromise and I trust this can be brought to the seller for a decision. Your continued refusal to bring my request to the seller is causing the delay in getting this deal signed and I would like to move forward to purchase these points promptly.

Please let me know what the Seller says tomorrow."

__________________________________________________________________________________________________________________

This is more stressful than buying a house!

 

[kcall13]

Perhaps I am over thinking this but I understood that real estate agents to not make a commission until closing day -- when they have done their work. Why are sellers agreeing to forfeit half of a deposit (20% of purchase price) to an agent who didn't get the deal closed? Certainly makes deals falling thru more profitably to an agent given they will be collecting 10% of the purchase price each time that transpires and getting to relist it and potentially do it over again. Why are agents being incentivized to kill deals after the withdrawal deadline? That doesn't seem right at all to me.

 

[JETSDAD]

What a ridiculous comment -- for the same reason people take auto loans and home loans when they don't have the funds up front. That said I will have the funds in a short amount of time but I need to close on my deal by December because I need to be able to book at 11-months to get my reservation -- for my wedding!

I am new to DVC and I asked for them to list all of the resorts I can use and one other minor change but backed off when he gave me an issue now I just want the funding contingency. I have been told the lawyer don't allow any changes and not to worry about the legal mumbo jumbo. I really really don't want to lose my deal -- again Wedding reservation needed but I am extremely skeptical that agent has been honest about there never being funding issues yet unwilling to change the funding contingency terms. Certainly don't want to talk to him on the phone at least I have a written record of this situation should I need it.

Agent:

"First and foremost, if you feel there was a misunderstanding in my written communications, I do apologize. I never intended to provide you advice that could be construed as legal.

Receiving a copy of the contract to secure financing is part of the Monera process. As I indicated, the Monera loan approval process is immediate. Returning the contract and escrow payment to us is part of our process and independent from Monera.

The way you outlined the situation was that at any time up until the contract closes, if you did not receive the loan type you wanted, you could cancel the contract and seek escrow reimbursement. Perhaps that was our misunderstanding.

Against this background, DVC Resale Market will not be amending the contract for a finance contingency as you have requested.

Please let me know if you have any further questions!"
_____________________________________________________________________________________________
My response:

"Andy this is not DVC Resale Markets Contract it is a contract between the buyer and seller and you are supposed to be acting as an agent for both parties. It is unethical for you to have advised me to sign this agreement and hold back my deposit. It is extremely unethical for you to decide for the seller what they will agree to and not bring my request to them for a decision directly. This is a large purchase and I want protection should I not get approved for funding and or the funding estimate is not what was represented – I have no control over this decision and am unwilling to put my deposit at risk and subject myself to liability on a purchase I cannot make today without the funding.

Now you have told me I would have a funding commitment in a matter of two days so I am comfortable with changing the language to reflect a time limit to secure adequate funding or withdraw. 5 business days should be sufficient (since again you say it will only take two days). This seems a reasonable compromise and I trust this can be brought to the seller for a decision. Your continued refusal to bring my request to the seller is causing the delay in getting this deal signed and I would like to move forward to purchase these points promptly.

Please let me know what the Seller says tomorrow."

__________________________________________________________________________________________________________________

This is more stressful than buying a house!

I know what I would be advising my seller clients after having read this, especially if they are in fact priced to be a 'great deal'.

 

[kcall13]

I'm wondering two things. First, if the buyer knew they needed funding did they include that as part of their offer and/or why was that not a part of the original contract? Second, what is the timeline here? The reason I ask is because if the lender is saying approval takes two days yet the OP is saying that would take them past the deadline, something is not right here. Typically you have seven days to execute the contract. Not to mention the ten-day recission period that is Florida law and is baked into all the contracts. I'm not seeing the problem here. Hopefully, the OP can weigh in with some more information.

Yes you must check off whether funding is needed, applied for and approved before you can submit the bid and I did that correctly. I even discussed the funding process with Agent before I got the terms to sign. The fact that they specifically state that the sale is not contingent upon financing means buyer is obligated regardless of ability to finance. That really should not be in this contract

 

[ELMC]

What a ridiculous comment -- for the same reason people take auto loans and home loans when they don't have the funds up front. That said I will have the funds in a short amount of time but I need to close on my deal by December because I need to be able to book at 11-months to get my reservation -- for my wedding!

I am new to DVC and I asked for them to list all of the resorts I can use and one other minor change but backed off when he gave me an issue now I just want the funding contingency. I have been told the lawyer don't allow any changes and not to worry about the legal mumbo jumbo. I really really don't want to lose my deal -- again Wedding reservation needed but I am extremely skeptical that agent has been honest about there never being funding issues yet unwilling to change the funding contingency terms. Certainly don't want to talk to him on the phone at least I have a written record of this situation should I need it.

Agent:

"First and foremost, if you feel there was a misunderstanding in my written communications, I do apologize. I never intended to provide you advice that could be construed as legal.

Receiving a copy of the contract to secure financing is part of the Monera process. As I indicated, the Monera loan approval process is immediate. Returning the contract and escrow payment to us is part of our process and independent from Monera.

The way you outlined the situation was that at any time up until the contract closes, if you did not receive the loan type you wanted, you could cancel the contract and seek escrow reimbursement. Perhaps that was our misunderstanding.

Against this background, DVC Resale Market will not be amending the contract for a finance contingency as you have requested.

Please let me know if you have any further questions!"
_____________________________________________________________________________________________
My response:

"Andy this is not DVC Resale Markets Contract it is a contract between the buyer and seller and you are supposed to be acting as an agent for both parties. It is unethical for you to have advised me to sign this agreement and hold back my deposit. It is extremely unethical for you to decide for the seller what they will agree to and not bring my request to them for a decision directly. This is a large purchase and I want protection should I not get approved for funding and or the funding estimate is not what was represented – I have no control over this decision and am unwilling to put my deposit at risk and subject myself to liability on a purchase I cannot make today without the funding.

Now you have told me I would have a funding commitment in a matter of two days so I am comfortable with changing the language to reflect a time limit to secure adequate funding or withdraw. 5 business days should be sufficient (since again you say it will only take two days). This seems a reasonable compromise and I trust this can be brought to the seller for a decision. Your continued refusal to bring my request to the seller is causing the delay in getting this deal signed and I would like to move forward to purchase these points promptly.

Please let me know what the Seller says tomorrow."

__________________________________________________________________________________________________________________

This is more stressful than buying a house!

Thanks for weighing in with more information. Are you aware of the fact that Florida law allows you a ten-day recission period, without penalty, for any reason whatsoever? This in and of itself makes this entire conversation moot. Even if you sign the contract and send the deposit today, you still have ten days to obtain financing which, according to you and your lender, is eight days more than you need. It is also clear from his response that his interpretation of your request (rightly or wrongly) was that you wanted a financing contingency that led up to the closing date. But that's beyond the purview of this conversation. I will reiterate, nothing I have read here leads me to conclude that the agent is acting improperly, yet you seem to have no issue hurling that accusation around. That's a problem.

I say this with all due respect, but from everything I have read here, you are the one who is making this more complicated than it needs to be. I think there are some things about the process you do not understand, and going on the attack as you have is not helping. Bigger picture, do you really want to create this kind of stress surrounding what is already a stressful event (your wedding)? There is a good chance that you will not close before December, and if that happens how will you handle it? Quite frankly, it sounds like you are forcing this and I wonder if it wouldn't be a good idea to take a step back and reevaluate. I wish you the best of luck with this process. I understand it is stressful for you, and maybe that is a sign? Normally the process is not this stressful.

 

[ELMC]

Yes you must check off whether funding is needed, applied for and approved before you can submit the bid and I did that correctly. I even discussed the funding process with Agent before I got the terms to sign. The fact that they specifically state that the sale is not contingent upon financing means buyer is obligated regardless of ability to finance. That really should not be in this contract

I disagree, it should absolutely be in the contract for the reasons stated by your agent. Securing resale financing takes a few days and is almost always guaranteed. The entire process takes place well within the ten-day recission period. Putting a contingency clause in the contract is redundant and unnecessarily complicates matters. It's really not this difficult.

 

[ELMC]

Perhaps I am over thinking this but I understood that real estate agents to not make a commission until closing day -- when they have done their work. Why are sellers agreeing to forfeit half of a deposit (20% of purchase price) to an agent who didn't get the deal closed? Certainly makes deals falling thru more profitably to an agent given they will be collecting 10% of the purchase price each time that transpires and getting to relist it and potentially do it over again. Why are agents being incentivized to kill deals after the withdrawal deadline? That doesn't seem right at all to me.

You are overthinking this but you are also correct, brokers get paid upon the contract closing. But you are incorrect in suggesting that they have not done work to get to that point. On the contrary, they have done a lot of work prior to the closing. Your suggestion that brokers would somehow structure their business around "killing deals" so that they can churn 10% off of the same contract multiple times is absolutely ludicrous. (The contract also states that the forfeited deposit that the broker is entitled to cannot exceed the projected commission on the sale). Florida real estate law is very clear on how these transactions are handled. One of those laws states that the broker has a fiduciary responsibility to complete the sale of the contract. Additionally, if the deal does fall through, the seller gets half of the deposit (actually a little bit more depending on the size of the deposit) AND they keep the contract. That's a pretty sweet deal for the seller, so there's really nothing to object to.

But the bigger picture here is that you are making the assumption that your broker is not following the law with absolutely no proof to support that assertion. I understand you are stressed, but you also seem to be confused, and you should really stop dealing in conjecture and wild accusation.

 

[kcall13]

Suppose Montera closes shop in 20 days and I am unable to secure funding elsewhere? Then I am liable to make this purchase regardless of my ability to fund. If as you say the contingency is redundant and unnecessary then why is is in there in the first place? "almost always guaranteed" is not much of a protection and any contract should fairly represent a buyer and a seller. Why would anyone enter such a deal on the basis that "oh that never happens so don't worry". That's terrible advice you are giving there fyi. Seems like the way to move forward is to modify the language or remove the contingency all together. I certainly don't think Agent should be making decisions for the seller without his knowledge. And yes I am stressed about my wedding!