Seller Backed Out :(

Discussion in 'Purchasing DVC' started by MickeysArmy6, Apr 10, 2012.

  1. MickeysArmy6

    MickeysArmy6 Earning My Ears

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    Back to the drawing boards... the seller backed out of the agreement. :confused3
    I guess they still are in love with their DVC afterall. Can't blame them for that.
    Oh well... back to the research! :surfweb:
     
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  3. xstitches

    xstitches Mouseketeer

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    So Sorry!
     
  4. VrBchJ

    VrBchJ DIS Veteran

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    My first contract was ROFR'd and the second contract the seller backed out. But then as with so many others I later found the perfect BWV contract. So don't give up hope. There's always another opportunity.
     
  5. DisDad07

    DisDad07 Mouseketeer

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    Keep trying, the right contract will show up sooner or later.
    It takes time that's for sure.
     
  6. XGrumpy1

    XGrumpy1 DIS Veteran

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    Sorry that they backed out on you. The same thing happened to me last year when a foreign seller found out about the taxes on top of the sales commission, they decided not to sell.
     
  7. gatorgirl02

    gatorgirl02 Mouseketeer

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    Boo...what a bummer. :headache: Where are you looking to purchase, if you don't mind me asking. I have been doing way to much research lately and would offer any help, if you need it. :flower3:
     
  8. tienpa

    tienpa Earning My Ears

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    Ughh! Sorry to hear! We are just starting to research and I dread that happening! Hope you find a replacement soon.
     
  9. JimMIA

    JimMIA There's more to life than mice...

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    I think the main reason sellers back out is that they are financed, owe more than they will get from the sale, and don't have the cash to pay IN to get rid of a DVC contract they can no longer afford.

    I think a LOT of sellers -- especially with Fidelity -- are in dire straits and don't really know what to do. And unfortunately, for some of them, there isn't anything they can do and the contract will eventually get foreclosed.
     
  10. Hunnypaw

    Hunnypaw Encinitas, CA

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    Intresting.... Sorry to hear that happened to you. :(
     
  11. gatorgirl02

    gatorgirl02 Mouseketeer

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    Sorry to hear that. I hope you find another contract you love even more! :sad:
     
  12. andreadoiron

    andreadoiron Mouseketeer

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    as a dvc owner, i have been comtemplating selling lately and wondered what commision rates are for the timeshare store or others that sell dvc
     
  13. JimMIA

    JimMIA There's more to life than mice...

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    The general range is 10-12% commission, with most charging 10%. That may seem like a high commission when compared to the commission for selling a house, but remember that the total sales price is very small with a timeshare (conpared to a house).
     
  14. andreadoiron

    andreadoiron Mouseketeer

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    thanks for the info!
     
  15. MickeysArmy6

    MickeysArmy6 Earning My Ears

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    We were looking into Bay Lake. We found, for us, it is the best bang for the buck. We stopped looking for a few weeks to get our sanity back. Now, I'm looking again (but don't tell my husband!)
     
  16. TosaTrio

    TosaTrio DVC Owner @ SSR & VWL

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    Why would more sellers back out of Fedelity contracts compared to others?
     
  17. JimMIA

    JimMIA There's more to life than mice...

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    Fidelity has a business arrangement with DVC. When DVC owners want to sell and contact DVC (usually to ask if DVC will buy their contract back, which they won't) they are referred to Fidelity in exchange for a cut of the commission on the referral. Because of that, most of the "distressed" DVC resales (people who HAVE to get out of their DVC holdings) end up in Fidelity's listings.

    At this point, the seller is making a difficult decision to get rid of something they like because, for whatever reason, they just can't afford to keep it. Many times, the reason they can't keep the contract is they bought direct at a very high price, financed, and now their contract is worth MUCH less than they paid (and much less than they owe). But, their focus is getting rid of the DVC contract and they're really not thinking much further than that.

    A deal is reached -- say 200 points @ $50 per point = $10,000. Seller says, "Whoopee, at least we sold it!"

    Once the offer, acceptance, and deposit are in place, the deal goes to ROFR. If it passes, the transaction goes to the closing company.

    At that point -- for the first time, really -- the buyer is given the details of the transaction in REAL dollars and cents. It's called a "Good Faith Estimate," or something like that. It shows the selling price, all costs owed by the seller, and the seller's NET proceeds from the sale.

    When the seller reads it, it looks like this (I made these numbers up):

    200 points @ $50 = $10,000

    less 10% commission of $1,000
    less misc selling costs of $150
    less LOAN PAYOFF OF $17,305 :eek:

    NET: You OWE $8,455, which you must PAY AT CLOSING!!! :scared1:

    Seller can't pay the 8 grand and bails out.

    That's simplified and the numbers are fictitious, but you get the general idea -- the seller finds out the resale price is so much less than they paid that they CAN'T sell.

    This problem can occur with any broker, of course. But it tends to occur much more frequently with Fidelity because DVC is referring mostly problematic contracts to them.
     
  18. JimMIA

    JimMIA There's more to life than mice...

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    There are sometimes other -- non-financial -- reasons why sales fail. Again, these turn up more often at Fidelity than other brokers because of the referral deal with DVC.

    Some causes of this type of failure are legal. The contract is tied up in an estate, and the process might be cumbersome. The seller might be in bankruptcy, which can seriously complicate the closing. The owners of the contract (the sellers) might be in the middle of a divorce. In that scenario, sometimes things go smoothly but other times, the sale becomes a pawn in a larger battle.

    Non-financial, non-legal complications also occur.

    Sometimes there are listing errors and the points shown in the listing (on which the offer is made) aren't really all there. Sometimes the owner has existing reservations, which either reduce the number of points actually there -- or greatly delay the closing date. Occasionally, those errors are accidental; often not. Lots of possibilities -- some of them simply annoying, but many are (or SHOULD BE) deal-breakers.

    Again -- can happen to any broker (and does occasionally), but these things seem to happen regularly with Fidelity because of the lower overall quality of their listings. (That's my personal opinion.)
     
  19. ELMC

    ELMC DIS Veteran

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    Sorry to hear that this happened to you. It must be tough to be so close only to lose the contract at the very end. Have no fear, though, you'll find another...maybe even a better deal! Good luck! :)
     
  20. MousekeTom

    MousekeTom Earning My Ears

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    Assuming this is accurate, this is really good information to know. Thanks for taking the time.:thanks:
     
  21. JimMIA

    JimMIA There's more to life than mice...

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    The part about the referral agreement is pretty well-known...and not uncommon in the real estate industry. Splitting commissions is a widely accepted practice.

    The rest is my personal opinion based on numerous threads over the years regarding closings that didn't go through for various reasons.

    I also think it's important to remember that, while Fidelity may experience more problematic closings than other brokers, I'm sure the majority of their sales are completed without any issues.
     

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