Anyone ever see this provision in a resale contract?

[JandD Mom]

I was hoping the "pick the brains" of all of the experts here. Today was a busy day for us in the resale market, we had one contract fall through, by no fault of mine, and then we had an alternate offer accepted by a different seller.

So we get the contract, and there is an "Addendum" which reads that the Buyer and Seller "authorize the assigned title company to extend the closing date an additional 60 days from [June 7, 2005]" only for the purpose of effecting the closing.

I emailed the agent and told her we will not agree to this provision. If they send the agreement to Disney this week, and we get by ROFR, the latest we will hear is May 15. They would then have 3 weeks to "get their act together" for closing.

It seems to me when I spoke to folks at TTS and other places, they could get us to closing a couple of weeks after ROFR passes. Am I off base here?

 

[CarolA]

Sounds strange to me. I have seem some resales lately where tey don't want to close for a few months (I assume for existing vacations).

 

[Scotch]

I have seen something similar (45 days I think) by First American Title Co. for several closings on other (non-DVC) resale timeshare transactions. It allows for things to happen and make sure you don't end up having to start all over. If you are in a rush, and you would rather kill the deal than wait an additional 60 days should something come up during the closing process, then don't agree to that term.

 

[Happy Birthday Cat]

Could it be because all reservations are cancelled on a contract when it changes hands, so the seller is attempting to put off the closing date to keep a reservation that was made with those points?

HBC

 

[drakethib]

I was hoping the "pick the brains" of all of the experts here. Today was a busy day for us in the resale market, we had one contract fall through, by no fault of mine, and then we had an alternate offer accepted by a different seller.

So we get the contract, and there is an "Addendum" which reads that the Buyer and Seller "authorize the assigned title company to extend the closing date an additional 60 days from [June 7, 2005]" only for the purpose of effecting the closing.

I emailed the agent and told her we will not agree to this provision. If they send the agreement to Disney this week, and we get by ROFR, the latest we will hear is May 15. They would then have 3 weeks to "get their act together" for closing.

It seems to me when I spoke to folks at TTS and other places, they could get us to closing a couple of weeks after ROFR passes. Am I off base here?

I seen that as well but I don't think mine was 60 days.

I did not sign it and everything went through fine.

 

[Dean]

I have seen it but not as an addendum and I too think it was 45 days. If it's an addendum from the same company you were already working with, that likely means the seller specifically stated they didn't want to close for some reason, likely as stated above. They probably either have an outstanding reservation or rental which will be cancelled if they close sooner. Or they could be in the middle of an add on though not likely if they're selling. It's their right and now you have to decide whether to accept the stipulation. You can question it but my guess is it will be a take it or leave it deal as the seller's hands may be tied tied. Let us know what you find out and what happens.

 

[JimMIA]

As others have suggested, that delayed closing provision could be an inconvenient but innocuous provision designed to protect a vacation they have planned.

On the other hand, one of the things you will learn about the resale marketplace is that the brokers are reputable, but not all of the sellers are. Because of the relatively small dollar value of resale contracts, there is no practical way to enforce them if the seller proves unscrupulous.

If your sellers are overseas, I would be very cautious of that provision. Their exchange rate with the dollar may be unfavorable right now, and they could be giving themselves a little more time to wait until it improves. If it doesn't improve, they just back out and there is absolutely nothing you can do about it.

There were three situations recently in which overseas sellers reneged on contracts. Two of those involved the same seller in the UK, who let the contracts proceed all the way through ROFR, waited until closing, and then backed out at the last minute.

Another possibility is that the seller suspects resale prices will rise when Disney increases prices at SSR in June, and if that happens they will back out.

I would sure find out what the rationale for that delayed closing provision is, and if you are not satisfied with the answers you are getting, dump it and find another contract. There is plenty of inventory out there.

If you decide to agree to the delayed closing, you might try protecting yourself by requiring the seller to match your deposit in escrow. If they back out of closing, you get their deposit. It's unlikely they would agree to that, but if they did, both parties would be on an equal playing field.

 

[mbb]

......Their exchange rate with the dollar may be unfavorable right now, and they could be giving themselves a little more time to wait until it improves. ....

A little OT...but thought I would share...
This is why we opened up a US$$ account..our CDN $ is really "strong" right now, and any USD we get goes into that account.

Works for us..but I guess if you're selling, you may not have the luxury of waiting a little longer for currency values to change.

 

[JimMIA]

It seems to me when I spoke to folks at TTS and other places, they could get us to closing a couple of weeks after ROFR passes. Am I off base here?

We just closed a contract through TTS and Timeshare Closing Services with expedited closing. We also wired the money, which probably saved 3 days time. We passed ROFR on March 10, and closed on March 30.

Without expedited closing, the closing would presumably have been delayed about two additional weeks.

 

[T.E. Yeary]

there is an "Addendum" which reads that the Buyer and Seller "authorize the assigned title company to extend the closing date an additional 60 days from [June 7, 2005]" only for the purpose of effecting the closing.
________________________________________________________________

This is a holdover from the old Timeshare Resale days when title companies did everything by hand. I do NOT recommend anyone sign such an addendum. There is NO incentive for a speedy closing! If a legal situation should occur concerning the closing, that is the time for the addendum to be presented. This will give the buyer and seller the opportunity to cancel the deal or proceed if that is their choice. In the old days, I have seen a contract take a year to close. Thankfully, we have come out of the dark ages.

The reputable companies that specialize in DVC and other High End resale properties, do NOT use such a clause because they are protecting the interests of both buyer & seller. If extra time is required due to a reservation commitment by the seller, it will be disclosed upfront, in the listing, and/or contract.

 

[JandD Mom]

I want to say this transaction did not have anything to do with TTS, nor did it have anything to do with "the big 3" DVC resale brokers. I also want to say I agree with Mr. Yeary completely, and, from a legal standpoint, signing such an agreement makes no sense at all.

I did notify the agent last night by email that we would not sign the addendum, and also indicated that there were a few items that should have been specified in the contract. The agent called me and told me no changes would be made to the contract and that what I wanted I would have to be put in a letter of understanding and she would see if the seller would sign it. Now I am not talking about minor stuff, I am talking about 51 points for this year that would expire before 9/1. I also know a few things about contracts and there was no reason such a provision should not have been in the contract -- except the broker's unwillingness to be bothered. Every email I got though was nonresponsive to our position on the addendum. I finally sent an email indicating we would not sign the 60 day extension addendum, and the agent was to accept or reject that. Again, I got a nonresponsive reply. So we decided to pull out of the agreement.

Before I could email the broker to express our intent to withdraw, lo and behold, the broker emails me to indicate the seller had misunderstood the deal with respect to the payment of the MF and would have to reject the agreement. Now I know, she told them we were unreasonable so they found a reason to walk. Either that, or she did not adequately explain the deal to them. I sent her several confirming emails that were crystal clear so she probably never outlined the deal to them.

I wish I knew who the sellers are so I could tell them about the shenanigans of the broker. Buyer beware. If you are doing resale, make sure you use someone reputable! This broker cost these sellers a sale.

 

[JimMIA]

You might want to check with TTS and see if they also have that listing. Many timeshare listings are not exclusive and the seller may have listed in several places.

 

[JandD Mom]

Hi Jim,

I have given all the information of what I am looking for to Jerry at TTS, but I have not heard from him.

 

[dis-happy]

Sorry it didn't work out for you; that would be extremely disappointing.

Just some info (for the next time...)
Both times when we inquired about resales at TTS, I was told to expect closing to take 60 days by the agent there (which seemed unbelievebly long to me--I've purchased entire houses with a mortgage in 3 weeks total!) We purchased two different contracts and both times we passed ROFR within a week. Even so, closing (the point where we were in the Disney system) still took 6 weeks and 8 weeks respectively. Lots of factors play into this, including how long it takes the seller to return stuff and how long it takes Disney to return the estoppel information. We paid cash and always returned documents immediately. A couple of times Timeshare Closing Services misplaced our paperwork (found this out when then asked for it again), and some other delays came about. In the end, I came to the conclusion that it's better to assume the 60 day timeframe and if you are buying a contract with expiring points or trying to get a ressie before a 7 month window opens up, keep that in mind. It can be a very frustrating experience if time is of the essence. While I found TTS to be a great resource as far as resale contracts go, TCS might be so big and so busy that the regular person gets lost in the shuffle. I wish they would provide their clients with a checklist and better communication about the process (and at least one person there is totally incompetent, in my experience). If we add on again, I'll either go through Disney or at least look into a different closing company. However, this is JMHO and YMMV.

 

[JandD Mom]

Sorry it didn't work out for you; that would be extremely disappointing.

Just some info (for the next time...)
Both times when we inquired about resales at TTS, I was told to expect closing to take 60 days by the agent there (which seemed unbelievebly long to me--I've purchased entire houses with a mortgage in 3 weeks total!) We purchased two different contracts and both times we passed ROFR within a week. Even so, closing (the point where we were in the Disney system) still took 6 weeks and 8 weeks respectively. .

Dishappy,

I just want to be clear. The contract did specify about 60 days to closing. The Addendum wanted to allow for AN ADDITIONAL 60 days (for a total of 120 days) for closing, at the title agent's option.

We were ok with 60 days, but 120 days was out of the question. I read enough on this board to know that is not the industry standard.

 

[dis-happy]

Yes, thanks for the clarification. That is totally obnoxious on the seller's part! And it would make me wonder what sneaky thing they were up to as well. Best of luck and pixie dust on finding a new contract. I can promise you one thing: while closing can be a frustrating experience, being part of DVC is the dream of a lifetime. You'll get there soon, I'm sure...