DVC Resale Contract Advice Needed

[kcall13]

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. 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 10% 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.

You seem to have a biased opinion here. Any by that I mean biased on the agent's side. If the broker has a duty to complete the sale of a contract seems -- well that does seem contrary to the fact that the agent refuses to bring my request to the seller and has again said sign or I will tell seller you have withdrawn. Finally -- all of these hard working real estate agents out here getting nothing on deals that do not close are getting shafted I guess. My opinion is that an agent should not profit from a deal going south -- again it incentivizes them to seek that result. While I am sure most people are ethical it is still problematic and in no way benefits sellers interests. Conjecture and wild accusations indeed -- I have posted the conversation. Are you related to this agent maybe?

 

[ELMC]

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!

So now you are worried about the lender going out of business? I really don't think going through with this purchase is a good idea. The clause that the contract is not contingent upon the buyer obtaining funding is to protect the seller as well as the contract. You will know if you are approved for funding well before the recission period ends. When I say "almost always guaranteed" I am once again referring to something that you will know definitively within the ten-day recission period. If you are not approved then you should rescind, without a doubt. I am definitely not saying "oh that never happens so don't worry" nor am I giving advice. I would appreciate that you either ask me to clarify your misunderstandings or cease layering your interpretations upon my statements. You have an agreement from an established lending company to provide funds at closing (or maybe even prior to...someone with more experience than me on this could hopefully weigh in). If you want to extend your reasonable risk assessment to include the financial institution going out of business then you are taking this a bit too far, in my opinion. You are only seeing this from your perspective, and everything that does not go out of its way to benefit you is somehow underhanded. It's clear I'm not going to change your mind on this but I still feel that I should be respectful and answer the question that you took the time to ask me.

You seem to have a biased opinion here. Any by that I mean biased on the agent's side. If the broker has a duty to complete the sale of a contract seems -- well that does seem contrary to the fact that the agent refuses to bring my request to the seller and has again said sign or I will tell seller you have withdrawn. Finally -- all of these hard working real estate agents out here getting nothing on deals that do not close are getting shafted I guess. My opinion is that an agent should not profit from a deal going south -- again it incentivizes them to seek that result. While I am sure most people are ethical it is still problematic and in no way benefits sellers interests. Conjecture and wild accusations indeed -- I have posted the conversation. Are you related to this agent maybe?

I think you are confusing disagreement with bias. You have laid out the situation quite clearly and I agree with the broker, not you. That's you and I disagreeing; it's not bias. It was my interpretation that you are confused about the process and that there is a misunderstanding between you and your broker, but that they have not acted unethically. Nothing you have said in this thread has caused me to change my opinion, and I'm sorry that displeases you. The process that you object to is standard operating procedure with all of the timeshare brokers that I have worked with. Your issue is not with this broker in particular but the entire system in general, and you want to change the way business is conducted. I don't think you're going to get a lot of support for that one, but others are free to disagree.

As far as your question/implication that I am related to the agent, the short answer is no, I have no relation to the agent, broker, seller, company, etc. whatsoever. The long answer is for me to thank you for saying that because I think you just proved my point. Again, best of luck and I hope this works out for you, but I think if you're going to be successful here you're either going to have to be a little more flexible or back out of the deal.

 

[emchen]

Agree with @ELMC's impeccable reasoning on this subject.

My 2 cents: life is about weighing risks and benefits. The risk of Monera going under (or if it does, the risk of you not being able to secure funding from the other 2 or 3 resale lenders) in the next 1-3 months approaches that of your Poly contract being taken by Disney through Right of First Refusal (0%). For you, on the other hand, the benefits of obtaining this contract in a timely manner clearly outweigh the risk.

Changing the established system is not really an option because your only leverage (if it can be called that) is to walk away...and it really doesn't sound like you want to walk away from, "a great deal".

 

[Bing Showei]

I also agree with ELMC, it seems your issue is with the system, not the agency. Everything you have described suggests that the agency is acting as any agency would. If you made this request to 10 different brokers, you'll get the same response in 10 different ways: thanks, but no thanks. From the perspective of a transaction broker, your proposal for the contingency introduces a new issue to potentially torpedo the closing. Does it better protect you? Absolutely, but it does so at the risk of the transaction not going through. Additionally this non-standard request for a financing contingency that extends all the way until closing and forces the seller/broker to assume the burden of the risk, namely losing the time and effort it takes to go through the process because you failed to secure funding.

The reality is that the only option you have is to play by their rules or walk away. I actually agree with you that the agent should just take your offer to the seller (I'm not sure I understand why they didn't just do that from the start), but as JETSDAD astutely put it, it's just a matter of the agent telling you, "OK, I'll take it to the seller." And then advising that the seller reject your offer.

It really does boil down to what the agent said which is that you either sign it, or you don't. If it is the amazing deal you are suggesting it is, there will be someone in line right behind you to buy it. It's not very comforting, but it's the reality of the industry... or the reality of your situation at least.

 

[tnicks]

So now you are worried about the lender going out of business? I really don't think going through with this purchase is a good idea. The clause that the contract is not contingent upon the buyer obtaining funding is to protect the seller as well as the contract. You will know if you are approved for funding well before the recission period ends. When I say "almost always guaranteed" I am once again referring to something that you will know definitively within the ten-day recission period. If you are not approved then you should rescind, without a doubt. I am definitely not saying "oh that never happens so don't worry" nor am I giving advice. I would appreciate that you either ask me to clarify your misunderstandings or cease layering your interpretations upon my statements. You have an agreement from an established lending company to provide funds at closing (or maybe even prior to...someone with more experience than me on this could hopefully weigh in). If you want to extend your reasonable risk assessment to include the financial institution going out of business then you are taking this a bit too far, in my opinion. You are only seeing this from your perspective, and everything that does not go out of its way to benefit you is somehow underhanded. It's clear I'm not going to change your mind on this but I still feel that I should be respectful and answer the question that you took the time to ask me.



I think you are confusing disagreement with bias. You have laid out the situation quite clearly and I agree with the broker, not you. That's you and I disagreeing; it's not bias. It was my interpretation that you are confused about the process and that there is a misunderstanding between you and your broker, but that they have not acted unethically. Nothing you have said in this thread has caused me to change my opinion, and I'm sorry that displeases you. The process that you object to is standard operating procedure with all of the timeshare brokers that I have worked with. Your issue is not with this broker in particular but the entire system in general, and you want to change the way business is conducted. I don't think you're going to get a lot of support for that one, but others are free to disagree.

As far as your question/implication that I am related to the agent, the short answer is no, I have no relation to the agent, broker, seller, company, etc. whatsoever. The long answer is for me to thank you for saying that because I think you just proved my point. Again, best of luck and I hope this works out for you, but I think if you're going to be successful here you're either going to have to be a little more flexible or back out of the deal.

I really see both points here, but I am also struggling to see why the broker is being defended so strongly as well.

After initially indicating funding was required up-front with the offer, do you honestly believe the broker should not place that as a contingency to the deal? There is no reason a time frame cannot be placed around that clause that then satisfies both parties. I'll say it again, advising the buyer to ignore the omission because it's an unlikely occurence is either poor or unethical advise.

Bottom line, the broker is unwilling to budge and I'd be weighing the risk of moving forward. If I have great credit it's really not a risk. If I don't have great credit and I'm concerned with getting denied, then I probably should not enter into a new financial obligation at this time.

 

[CarolMN]

Could someone explain how the "10 day to rescind" aspect of Florida law fits in here? (I'm thinking I must not understand correctly as I thought one always could rescind the contract if it is done within 10 days of signing the purchase agreement and if rescinded, the deposit + any moneys paid would be refunded. If so, maybe this discussion is a moot point. Seller could just back out if financing doesn't come through). Thanks.

 

[kcall13]

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.

I am getting Polly at 145 and seller is paying closing. That seems like a very good deal based on all the listings I am seeing.

 

[kcall13]

Could someone explain how the "10 day to rescind" aspect of Florida law fits in here? (I'm thinking I must not understand correctly as I thought one always could rescind the contract if it is done within 10 days of signing the purchase agreement and if rescinded, the deposit + any moneys paid would be refunded. If so, maybe this discussion is a moot point. Seller could just back out if financing doesn't come through). Thanks.

I am told it takes 60-90 days to close which is well past the 10 days. Yes I understand anything going wrong once a commitment is provided is extremely rare but again there is a possibility which is why a funding contingency is a part of any real estate contract. This one just specifically states that I am a cash buyer who is not contingent on funding -- which is inaccurate.

 

[kcall13]

After thinking it over I am going to sign and complete the funding process and reach out to an attorney to review before my 10 days has expired. My Realtor is telling me they have the contingency written for a cash buyer and it should accurately represent that I am a financing buyer. She is extremely troubled by the fact that agent is unwilling to bring my request to the seller and intends to simply tell seller we did not sign within the time frame -- hence the reason I am suspect of this agency all around at this point. Given the deal that I got, my thought is that seller is very motivated to sell so it will be an unfortunate waste of his and my time if the attorney tells me to withdraw from this deal based on the inaccurate contingency clause. I will update you on how it goes but I do know this is not an agency I would use as a seller or buyer again based on this experience. The Agent is putting the deal at risk and not even giving Seller an opportunity to make his own decision.

 

[anomamatt]

She is extremely troubled by the fact that agent is unwilling to bring my request to the seller and intends to simply tell seller we did not sign within the time frame -- hence the reason I am suspect of this agency all around at this point.

It might not be such a bad thing (if you want this contract). In the current market, it's very possible that the seller would move to another offer. I probably would.

I will update you on how it goes but I do know this is not an agency I would use as a seller or buyer again based on this experience. The Agent is putting the deal at risk and not even giving Seller an opportunity to make his own decision.

As others said above, you are going to find similar experiences from almost all of the DVC resale brokers/agents.

 

[Matty B13]

I am getting Polly at 145 and seller is paying closing. That seems like a very good deal based on all the listings I am seeing.

$145/point for Poly is an okay deal, not a great deal, anything lower that $135/point for Poly is a good deal currently.

If you are uncomfortable with the Broker, then I would walk away from the deal, but I really don't think you will find another Broker that would be willing to add the clause that you are seeking to add to the contract.

I have bought 2 contracts from this Broker, and everything went fairly smoothly and professional. I wouldn't hesitate to use them. The Timeshare Store is an excellent Broker as well, so you might want to try them.

 

[anomamatt]

I am getting Polly at 145 and seller is paying closing. That seems like a very good deal based on all the listings I am seeing.

Is the contract loaded (does it have full current UY points)? If so, yes, that is a good/reasonable deal. You can do better if there are no current UY points.

 

[kcall13]

Well that is unfortunate. Seems like buyers should have better representation in these deals and someone to negotiate on their behalf with more knowledge about these types of transactions. Aside from negotiations -- which the Agent did get me a fantastic deal -- I don't feel my interests are being fairly represented in this transaction. I certainly think it is crazy that Agent gets to keep 1/2 of the security deposit up to full commission if buyer can't close -- that should go to Seller. At any rate this is certainly proving to be a learning experience. Hoping all goes well from here out.

 

[JETSDAD]

I am told it takes 60-90 days to close which is well past the 10 days. Yes I understand anything going wrong once a commitment is provided is extremely rare but again there is a possibility which is why a funding contingency is a part of any real estate contract. This one just specifically states that I am a cash buyer who is not contingent on funding -- which is inaccurate.

So this does confirm the broker's remarks regarding you wanting a contingency right up until closing which is not going to happen. I know different areas have different laws and norms but I have never heard of running contingencies to closing. You typically would have a certain period of time to fulfill the condition and move forward or walk away from the deal. If financing can be completed within a couple of days then you would be well within your rescission period should you not be able to get financing (we don't have a rescission period here so that is why I had previously mentioned having the condition of financing in the offer.....it appears that would not really be necessary there as you are already protected should the financing not be approved). No seller is going to tie up their property/contract for 60-90 days just to leave it wide open for a buyer to bail at the last minute free and clear.

 

[kcall13]

$145/point for Poly is an okay deal, not a great deal, anything lower that $135/point for Poly is a good deal currently.

If you are uncomfortable with the Broker, then I would walk away from the deal, but I really don't think you will find another Broker that would be willing to add the clause that you are seeking to add to the contract.

I have bought 2 contracts from this Broker, and everything went fairly smoothly and professional. I wouldn't hesitate to use them. The Timeshare Store is an excellent Broker as well, so you might want to try them.

My agent told me I was getting a "steal" and basically at $141 pp since Seller is covering closing. This also is not true?

 

[Bing Showei]

My agent told me I was getting a "steal" and basically at $141 pp since Seller is covering closing. This also is not true?

Dude. You need to pump the brakes and do more research. You don't seem to have a good sense of market value, you are relying on a transaction broker to get you a good deal (and trust their word that they did), and you have unrealistic expectations of how the resale market process functions (newsflash: it's not buying a house).

Your wedding deadline is adding self-imposed pressure that seems to be forcing you to make some choices you really don't want to make. Unless your lawyer is friend or family, the cost of paying your lawyer to review a document that you've already signed sounds like a poor use of resources and certainly adds to your cost.

The more you share, the more it sounds like you need to take a breather.

 

[kcall13]

So this does confirm the broker's remarks regarding you wanting a contingency right up until closing which is not going to happen. I know different areas have different laws and norms but I have never heard of running contingencies to closing. You typically would have a certain period of time to fulfill the condition and move forward or walk away from the deal. If financing can be completed within a couple of days then you would be well within your rescission period should you not be able to get financing (we don't have a rescission period here so that is why I had previously mentioned having the condition of financing in the offer.....it appears that would not really be necessary there as you are already protected should the financing not be approved). No seller is going to tie up their property/contract for 60-90 days just to leave it wide open for a buyer to bail at the last minute free and clear.

Perhaps you have never bought a home? All Real Estate transactions are contingent on financing if the buyer requires financing. Buyer has a set number of days to provide a funding commitment in a real estate transaction and generally a pre-approval letter from a lender is required at the time of offer so Seller has a reasonable basis to ascertain that Buyer can obtain funding. In this transaction Seller can back out up until date of closing and only puts at risk his full commission price -- I am risking responsibility for the entire purchase and not just my security deposit. Should the lender for any reason not follow thru I have no recourse and would lose not only my deposit (to the agent not the seller at that so who is really being protected in this deal??). I can scrape out the cash if needed so that doesn't happen to me which is why I did sign it. A buyer who is not in that situation puts themselves at a significant risk moving forward under these kinds of terms.

 

[kcall13]

Dude. You need to pump the brakes and do more research. You don't seem to have a good sense of market value, you are relying on a transaction broker to get you a good deal (and trust their word that they did), and you have unrealistic expectations of how the resale market process functions.

Your wedding deadline is adding self-imposed pressure that seems to be forcing you to make some choices you really don't want to make. Unless your lawyer is friend or family, the cost of paying your lawyer to review a document that you've already signed sounds like a poor use of resources and certainly adds to your cost.

I do have someone who will review at no cost but perhaps you are right and I should step back from this and research a bit more. None of that is going to change the fact that I just don't like the contract. Perhaps I am better served paying to buy directly from Disney.

 

[tnicks]

I am told it takes 60-90 days to close which is well past the 10 days. Yes I understand anything going wrong once a commitment is provided is extremely rare but again there is a possibility which is why a funding contingency is a part of any real estate contract. This one just specifically states that I am a cash buyer who is not contingent on funding -- which is inaccurate.

Well I don't think you really should be concerned with financing being secure and then disappearing before a closing date. You should be able to delay the closing if new funding needed to be secured again. It boils down to whether you have a good credit history and are in a financial position to take the loan. If you are, getting funding before closing, in the case that your original funding somehow evaporated, would be low risk in my mind.

For me, I would want the contract to state that it was contingent on securing funding, prior to being sent for ROFR. That's fair to me. You may simply want to confirm that the closing date can be moved if new funding needed to be acquired.

 

[Matty B13]

When trying to sell one of my Contracts, I had a buyer make an offer and sign the contract, but hadn't put down an deposit. 24 hours later the deal was canceled by the seller because they couldn't get financing, so they lost nothing. I only lost 2 days.

The reason they probably won't add your clause to the contract, is because the standard contract allow for 10 days to secure financing, which is plenty of time for this type of purchase. This isn't a house mortgage. With your clause added, you could back out of the deal up until closing, and the owner and broker would have wasted 2-3 months.