Advise on a DVC agreement with a private seller

[jimsanfilippo]

Background: I just agreed to purchase 200 Boardwalk points (16 this year, 200 in Aug. '11) from a private seller (for $50/pt). The problem is he had a couple that signed an agreement that went to Disney for ROFR but then backed out of the deal, hence he is selling to me. We signed a new agreement and he sent it to Disney.
He believes Disney will just continue the process they started with the other couple's offer 2.5 weeks ago, but I'm of the opinion we would have to start the clock over again. He will not contact Disney to ask the question and is just hoping we'll pass ROFR on about Sept. 15th. What is your opinion on this?
Also (my big question), I am using a timeshare financing company for 80% of the cost. They state we need a title company to facilitate escrow. The seller said he does not think that is the case but that maybe it is just something my financing company is making us do. He asked for a quote from a company that deals with escrow for timeshares but has not received it back yet. Do we really need this? The seller just wanted payment in full at closing without any money for a deposit up front. Does that make a difference?

*UPDATE
Well, 200 Boardwalk pts did clear ROFR at $50 per point today. I thought it might since 33 of the last 36 ROFRs were for Beach Club Villas. It seems they are letting a lot of lower offers slide if it's not BCV.

 

[jlewisinsyr]

I'd avoid private person sales, I'd stick with a known Timeshare Company. If the person doesn't know the process it could take longer and you could find yourself putting out more then you need to.

As for the ROFR, every sale has to go through the process and BWV at $50, seems like a good price for Disney to take the contract.

 

[6bowmans]

I'd avoid private person sales, I'd stick with a known Timeshare Company. If the person doesn't know the process it could take longer and you could find yourself putting out more then you need to.

As for the ROFR, every sale has to go through the process and BWV at $50, seems like a good price for Disney to take the contract.

I second this and would be suspicious. I think the seller is just trying to rush the paperwork to Disney so they will take the contract. He gets the money from Disney and they take care of the paperwork. I don't think he expects to have to do any of the leg work on the back end with you (i.e. after Disney passes on the contract).

 

[TisBit]

I agree that this "contract" has some issues. At that price, I don't see it passing ROFR first off....and if it magically does, not using an escrow company puts you at a great risk. If you send him money and he never turns the deed in, you are out of luck and would have to go to court.

The whole point of escrow is to protect the buyer/seller while the transaction is being processed. They hold the money until the title is transferred, this way the buyer can't pull it back and the seller doesn't get it until they do their end.

 

[hitman007]

If you use an escrow company there should be no problems. If you don't you are crazy! Should cost about $500 for title and escrow services. I believe the clock at Disney starts over when a new buyer steps in as in your situation.

 

[Dean]

Background: I just agreed to purchase 200 Boardwalk points (16 this year, 200 in Aug. '11) from a private seller (for $50/pt). The problem is he had a couple that signed an agreement that went to Disney for ROFR but then backed out of the deal, hence he is selling to me. We signed a new agreement and he sent it to Disney.
He believes Disney will just continue the process they started with the other couple's offer 2.5 weeks ago, but I'm of the opinion we would have to start the clock over again. He will not contact Disney to ask the question and is just hoping we'll pass ROFR on about Sept. 15th. What is your opinion on this?
Also (my big question), I am using a timeshare financing company for 80% of the cost. They state we need a title company to facilitate escrow. The seller said he does not think that is the case but that maybe it is just something my financing company is making us do. He asked for a quote from a company that deals with escrow for timeshares but has not received it back yet. Do we really need this? The seller just wanted payment in full at closing without any money for a deposit up front. Does that make a difference?

There are some potential red flags here but the price is good for a 200 pt BWV contract and worth the minimal aggravation and risk for the $2-3K savings. In this situation I'd use a closing company with escrow and you should be protected. DVC will start over on the ROFR as this is a new contract. Do not attempt to close on the ROFR from the other contract. I'm sure the requirement is from the finance company, it is not a state or DVC requirement but I think it's moot in this situation and it is a reasonable requirement. OTOH, there are closing companies you can use that are less including Timeshare Transfers out of Vero Beach and Timeshare Travel Trades out of SC. TTT will even do an advisory service for $25 but you do all the work though I wouldn't go that route in this case. As for escrow, any attorney can do it and often will for around $100.

 

[jimsanfilippo]

Well, 200 Boardwalk pts did clear ROFR at $50 per point today. I thought it might since 33 of the last 36 ROFRs were for Beach Club Villas. It seems they are letting a lot of lower offers slide if it's not BCV.

 

[JimMIA]

He believes Disney will just continue the process they started with the other couple's offer 2.5 weeks ago, but I'm of the opinion we would have to start the clock over again. He will not contact Disney to ask the question and is just hoping we'll pass ROFR on about Sept. 15th. What is your opinion on this?

I'm pretty sure you are right and he is mistaken. If you change anything in an agreement (especially one of the parties to the agreement) you've got a new agreement which has to go for ROFR review...IMHO...YMMV.

Also (my big question), I am using a timeshare financing company for 80% of the cost. They state we need a title company to facilitate escrow. The seller said he does not think that is the case but that maybe it is just something my financing company is making us do. He asked for a quote from a company that deals with escrow for timeshares but has not received it back yet. Do we really need this? The seller just wanted payment in full at closing without any money for a deposit up front. Does that make a difference?

I think your seller means well, but is focusing too much on details, some of which are none of his business unless he's paying the closing costs.

If your financing institution requires a specific closing company, that's a requirement of your financing and you will not be buying without using who they specify.

If they require a "title company," that will probably be what you are getting anyway for escrow. I'd double-check to be sure whether they require title insurance, because that is different from escrow and will be an additional fee. But whatever your financing source requires, you will have to do whether the seller thinks it's necessary or not.

I don't see anything sinister here -- I think you just need to jump through the ROFR and financing hoops and start planning vacations.

 

[JimMIA]

A little further on the issue of re-submitting ROFR review for the new agreement involving you:

Understand that when Disney ROFR's a contract, they take your place in the deal. They pay exactly the price, and all associated costs you agreed to pay.

THEREFORE...the choice (and cost) of the closing agent is pertinent, and would require that Disney review your specific deal...not someone else's. Closing costs vary from closing agent to closing agent, and Disney can't review any deal without knowing exactly what ALL of the exact costs are.

[ETA: Both you and the seller should be aware that there are some costs payable to DVC associated with ROFR and closing. There is a cost for ROFR review, and there is another cost for the estoppel letter. I'm not sure how much each are, but I think the total is $70.]

 

[csharpwv]

OK so you are dealing with a $10,000 purchase - and you are financing approx $8,000. That's a decent amount of money!

When that amount of money is on the line - NEVER in a million years would I make a deal like that without using the security and piece of mind that a title/escrow service provides.

When a seller is in a 'rush' to close a sale, that sends up a red flag in my book!

Danger Will Robinson! Danger!

On top of that - I really don't think that $50.00pp would pass ROFR - just doesn't seem like a wise thing for them to let that one through!

 

[RobDoc]

...
On top of that - I really don't think that $50.00pp would pass ROFR - just doesn't seem like a wise thing for them to let that one through!

You might want to review the "Update" posted earlier today reporting that the contract already passed ROFR at $50 per point.

Update

--------------------------------------------------------------------------------

Well, 200 Boardwalk pts did clear ROFR at $50 per point today. I thought it might since 33 of the last 36 ROFRs were for Beach Club Villas. It seems they are letting a lot of lower offers slide if it's not BCV.

 

[csharpwv]

Sorry - I didn't see the update the first time.

I can't believe that on-site DVC resorts are going through ROFR for that LOW price per point!

IMHO It's really a sign of a tough economy that a DVC Member would let a contract go at a price that far below what was paid (price - per point).

Plus to see all of the DVC contracts out there on the resale market - it's tough to think what DVC's room inventory is like right now (looking 11 months out) seeing that all of these contracts and a lot with banked points at that equal empty rooms and available inventory. It would be great to get a maint. fee reduction due to all of that inventory - however - I don't think Disney is filling regular resort rooms - let alone 1 and 2 BR inventory. But - who knows!

I still can't believe that $50.00 per point passed ROFR!

 

[RobDoc]

...
I still can't believe that $50.00 per point passed ROFR!

BWV passed ROFR at the end of August at $33 per point too.

 

[jimsanfilippo]

BWV passed ROFR at the end of August at $33 per point too.

I guess I overpaid .

 

[6bowmans]

*UPDATE
Well, 200 Boardwalk pts did clear ROFR at $50 per point today. I thought it might since 33 of the last 36 ROFRs were for Beach Club Villas. It seems they are letting a lot of lower offers slide if it's not BCV.

Congratulations!!! I would follow Dean's advice and contact a closing company right away.

I need to start looking at resale again

 

[jimsanfilippo]

Thanks for all the advice. I am going to use Timeshare Closing Services. This is what they quoted me:

Full Closing $ 375.00
Resort Transfer Fee $ 25.00
Recording Fee $ 93.00
Title search & policy $ 60.00
__________________________________
Total Closing Cost $ 553.00

 

[jimsanfilippo]

Thanks for all the advice. I am going to use Timeshare Closing Services. This is what they quoted me:

Full Closing $ 375.00
Resort Transfer Fee $ 25.00
Recording Fee $ 93.00
Title search & policy $ 60.00
__________________________________
Total Closing Cost $ 553.00

We actually closed using closemytimeshare.com instead. They were much, much more user-friendly and fast and they even cost a lot less ($375 total). So the deal is done and filed with Disney on Sept. 24th.

 

[Dean]

We actually closed using closemytimeshare.com instead. They were much, much more user-friendly and fast and they even cost a lot less ($375 total). So the deal is done and filed with Disney on Sept. 24th.

That's more like it. The numbers you quoted befoe were high and included added fees by the company that should not have been there. I changed and recorded 4 deeds for less than $60.