Closing reeeaaallly far out... what does the contract look like?

[pmaurer74]

We are considering a contract that cannot close until really far out... like 9 months or so. This is appealing to us because we will not have all of the money until February anyway. I already spoke to the agent and they said most of the money would not be required until close to closing... what if something happened between now in then could we back out or could they back out? What would happen?

 

[Kaigler]

I can't say for sure...but you can back out if you decide not to close. A deal isn't done until both parties close. It's the same in all real estate.

 

[Jessiemendez1]

My contract had 10 days for the buyer to back out. After 10 days, if either party backed out, any fees paid by the title Company would be paid from the deposit (mine was $1000). And if the seller backed out they had to pay I think 1/2 the selling commission to the broker. But every broker/contract is different. You can always ask the broker if they can add something in the contract about what happens if either party cancels since the closing is so far out.

 

[KAT4DISNEY]

It would still be a 10 day cancellation. You both would sign the agreement and it would go to ROFR then and after passing would just wait for the closing date. If you cancelled after the 10 day period you would lose your deposit. If the seller cancelled or did not complete the sale you would get the deposit back.

 

[JimMIA]

I can't say for sure...but you can back out if you decide not to close. A deal isn't done until both parties close. It's the same in all real estate.

Sure, you can back out -- but, as a buyer, you would lose your deposit. Pretty shaky advice.

The other two posts above -- KAT4DISNEY and Jessiemendez1 -- are accurate.

To me, the issue with a really delayed closing would be: will they, in fact, close?

Obviously someone has a vacation they don't want to cancel, but what happens if prices go up in the meantime, they decide to get a divorce, they win the Lotto, their dog has puppies -- lots of unknowns with a long-delayed closing.

 

[Kaigler]

It's not advice. Just a fact of real estate. If something were to happen past deadline you might lose your deposit, but you're not on the hook for 20-30k until you sign on the dotted line.

 

[pmaurer74]

Sure, you can back out -- but, as a buyer, you would lose your deposit. Pretty shaky advice.

The other two posts above -- KAT4DISNEY and Jessiemendez1 -- are accurate.

To me, the issue with a really delayed closing would be: will they, in fact, close?

Obviously someone has a vacation they don't want to cancel, but what happens if prices go up in the meantime, they decide to get a divorce, they win the Lotto, their dog has puppies -- lots of unknowns with a long-delayed closing.

This is what I am worried about. The price is a fair price compared to what I have seen and I imagine by then likely to be higher so I wondered if they had incentive to not back out like PP said, they would lose money too.

 

[JimMIA]

It's not advice. Just a fact of real estate. If something were to happen past deadline you might lose your deposit, but you're not on the hook for 20-30k until you sign on the dotted line.

Actually, you could be on the hook for the whole thing, but you probably wouldn't be.

The seller could sue you to force compliance with the contract, but as a practical matter the legal expenses and costs of collecting a judgement are prohibitive, so it's rarely done. I've never heard of that kind of lawsuit in connection with a small purchase like a timeshare.

 

[JimMIA]

This is what I am worried about. The price is a fair price compared to what I have seen and I imagine by then likely to be higher so I wondered if they had incentive to not back out like PP said, they would lose money too.

As noted by several other posters, a buyer who backs out would forfeit their deposit -- and that sanction is pretty much universally enforced.

A seller who backs out technically owes the realtor their commission; after all, the broker has done their job and is entitled to be paid. That sanction is sometimes enforced, but not always. In addition, the broker has the option of refusing to relist contracts from sellers who back out, and the more ethical ones (like TTS) often do that. Good brokers don't want a listing from an unreliable (or unethical) seller.

 

[CarolMN]

If it were me, I'd just ask myself if the prospect of saving (whatever you think that would be) worth the risk? I'd probably just keep looking, especially since I don't have all of the cash I need in hand. YMMV, of course.

 

[Kaigler]

If it were me, I'd just ask myself if the prospect of saving (whatever you think that would be) worth the risk? I'd probably just keep looking, especially since I don't have all of the cash I need in hand. YMMV, of course.

That's probably the best advice. There will always be other contracts.

 

[pmaurer74]

I had thought of that, there will likely be others I just saw two other contracts posted yesterday for $15 per point higher than this contract. I assume it is lower because of the closing timeframe and it is relatively stripped (although the other contracts were stripped too). Assuming the trend is going towards to $95 per point value, we would "save" $3000.

 

[Dean]

It's not advice. Just a fact of real estate. If something were to happen past deadline you might lose your deposit, but you're not on the hook for 20-30k until you sign on the dotted line.

Not to pile on but to explore this issue further. RE laws would vary by state and while timeshares are RE in effect, they often have their own rules on such matters. The rules for FL say one can cancel up until 10 days after signing assuming certain criteria are met, for resale it's essentially the last date when the buyer or seller signed the agreement. It assumes the contract includes language on the 10 day requirement else the cancelation period jumps up to a full year. After 10 days both parties are technically committed legally unless the contract language generates other outs such as missing a closing date, failing to bank points as outlined and the like.

 

[Kaigler]

You can find any number of reasons to cancel here in Texas. That's why many real estate agents here don't consider a deal done until both parties sign. When we sold our home last year, the seller could have backed out on the day of closure and only been out $100. We would have lost all of that time to find potential buyers.

 

[Dean]

You can find any number of reasons to cancel here in Texas. That's why many real estate agents here don't consider a deal done until both parties sign. When we sold our home last year, the seller could have backed out on the day of closure and only been out $100. We would have lost all of that time to find potential buyers.

That may be for RE but not for timeshares as I understand it. Here's the rules for timeshares in Texas, and that may only apply to developer sales only, I'm not sure for TX. Timeshare rescission limits range from 3 to 15 days, some are business days, many calendar days. I've only seen one over 10, AK. I've seen info on all but 3 or 4 states. Of course if the transaction were for a timeshare in another state and the paperwork were done elsewhere, state law of residence would not apply. The 2 components are location of the timeshare and location of where it was signed.

Right to Cancel a Timeshare in Texas
In Texas, you have the right to cancel a timeshare contract so long as you do it before the sixth day after the date:

• you sign and receive a copy of the purchase contract, or
• receive the required timeshare disclosure statement, whichever is later (Tex. Prop. Code Ann. § 221.041).

The right to cancel cannot be waived. A contract containing a waiver of this right is voidable by the purchaser (Tex. Prop. Code Ann. § 221.041).

 

[Marriedbythemouse]

Personally I would wait. That's a long time to wait for closing. The prices could drop and you might find a better contract for cheaper than they are now.
I think it's the same for the contracts that are stipped of points until 2017. I just don't see the point in gambling on the price.
Just my two cents. Good luck! I hope you are happy memebers by this time next year!

 

[pmaurer74]

Personally I would wait. That's a long time to wait for closing. The prices could drop and you might find a better contract for cheaper than they are now.
I think it's the same for the contracts that are stipped of points until 2017. I just don't see the point in gambling on the price.
Just my two cents. Good luck! I hope you are happy memebers by this time next year!

We purchased a different contract already and hopefully will close at the end of October!

 

[bobbiwoz]

We purchased a different contract already and hopefully will close at the end of October!

Welcome Home!