Foreign sellers

[Lakegirl]

I was told that buying from a foreign seller may take longer. Anyone know why or have any experiences to share?

 

[Friendlyadvice2]

Because of the FIRPTA tax issue. A foreign seller is responsible for paying income tax on the sale of the property and typically 10% is withheld and paid to the IRS for the sale of the property. As such, the buyer, via your closing agent, is responsible for withholding the tax and paying it over. You will have to provide your ssn and it could approximately 3 additional weeks to get everything vetted properly before the deal is officially done.

I have to admit, when seeing your contract that is one of the reasons I decided to pass on it. There is not a thing wrong with it, but time was of the essence for me so I negotiated on a different deal.

 

[Friendlyadvice2]

Sorry, thought I better add FIRPTA stands for foreign investment in real property tax act.

 

[CMNJ]

Plus sellers have to get their closing documents notArized and while in the US notaries are readily avail this is not the case in foreign countries. Typically in our countries they have to go to a U.S. embassy which can take time.

 

[Lakegirl]

Ughgghh!! Of course it was made like it was no big deal when I made my offer!,,,

 

[CMNJ]

It supposedly isn't that big a deal (according to the brokers and closing companies) IF you don't care how quickly you close. We planned to go this fall and wanted to be able to book by the time the 7 month window opened (and we didn't really want to have to be involved with the whole tax thing and giving out our SSN). If you aren't going to use your points this year (and don't care about giving out your SSN) it may not be a big deal for you.

 

[Friendlyadvice2]

"Big deal" is a relative term. The major inconvenience here is simply the extra 3-4 weeks to get everything finalized. This may or may not be a big deal for somebody. FWIW, I've always asked and been advised at the outset if the seller is foreign. It's important for me to know who I'm doing business with and it's more difficult to fully vet a foreign seller.

 

[CMNJ]

"Big deal" is a relative term. The major inconvenience here is simply the extra 3-4 weeks to get everything finalized. This may or may not be a big deal for somebody. FWIW, I've always asked and been advised at the outset if the seller is foreign. It's important for me to know who I'm doing business with and it's more difficult to fully vet a foreign seller.

Yes we also were a little skittish about buying from a foreign seller in case there was any problem with the title (though the title company told us this wouldn't be an issue as they would do a full title search and we would have an insurance policy as well). In the end we decided against a foreign seller (even though it was exactly what we wanted) because of our concerns (including those I mentioned in earlier posts). That being said I have read many posts here of people having no issues and the brokers/closing company we spoke with indicated that they deal with foreign sellers and buyers frequently with no issues. OP it basically will come down to your own comfort level and how quickly you want/need this contract to close. If you haven't signed anything and aren't comfortable proceeding you can withdraw your offer-legally you have up to 10 days AFTER you sign the contract (but that wouldn't be fair to the seller) and move on. There are new contracts posting all the time and I'm sure you could find a domestic seller if that would make you more comfortable-we did

 

[pangyal]

We are in Canada and our sellers were in the UK. To be fair, the tax issue did not affect us, so perhaps the time was reduced that might have been spent working with that. We completed our entire transaction, from offer submission/acceptance to being able to book our first trip with points loaded, in only 57 days. So I'm not sure that it adds any time at all if the sellers stay on top of what they need to do. From what I've read, local sellers can drag their feet just as well!

 

[Minniesgal]

We are foreign sellers and when we bought the contract we also bought it from foreign sellers. This was our quickest purchase. Getting dcuments notoriety isn't that big a deal it's just a trip to the U.S. EMBASSY which can be booked 6 weeks in advance. We are selling at the moment, it passes ROFR yesterday so I made our appointment for 3 weeks from now.

As for the tax the money is withheld from our proceeds so shouldn't effect the purchaser too much.

Our second resale we bought from US sellers who took 5 weeks to return paperwork.

 

[cvjw]

We have purchased two contracts from two different foreign sellers. Two of our easiest and fastest closing contracts. Just because it is a foreign seller doesn't mean it is going to take longer. Motivated sellers move quicker - whether foreign or domestic. We had to cancel a contract with a seller in PA. We passed the "close by" date on the contract, and he had not even returned the closing papers. Sellers that aren't motivated take longer. Just hope your sellers are motivated. Agree with PP, no need to overnight your closing docs. It is highly doubtful that the sellers will have their paperwork there the next day.

 

[Lakegirl]

Thank you very much for all your info. Does it really take 6 weeks to get an appt at the us embassy ???? That seems it would hold it up? Can they make an appt right at rROFR? Or even a week before the 30 days so that way hopefully it won't add 6 weeks? I am past the 10 days and of course want to book a trip August22-30. I am so stressed has anyone ever heard of anything being open 3 months out???

 

[Minniesgal]

Thank you very much for all your info. Does it really take 6 weeks to get an appt at the us embassy ???? That seems it would hold it up? Can they make an appt right at rROFR? Or even a week before the 30 days so that way hopefully it won't add 6 weeks? I am past the 10 days and of course want to book a trip August22-30. I am so stressed has anyone ever heard of anything being open 3 months out???

No I didn't say it takes 6 weeks I said it can be booked up to 6 weeks in adavnce

 

[Lakegirl]

Oh thank you so much for clarifying !!

 

[lawboy2001]

I think it would depend on how 'foreign' the seller is! If the seller is Canadian, they probably live within an hour of a US border, and can make the short drive to get the documents notarized in the US, thereby obviating the need for an appointment at a US embassy, consulate. You can write the purchase documents that time is of the essence and that the contract must close by a certain date....that will motivate the seller to ensure they have the docs notarized quickly.

 

[mort1331]

We are in Canada and bought from a family in Japan. Took about the same time that our first transaction was. approx. 65 days. No issues. As others have said it depends on who is selling.

 

[Lakegirl]

I think it would depend on how 'foreign' the seller is! If the seller is Canadian, they probably live within an hour of a US border, and can make the short drive to get the documents notarized in the US, thereby obviating the need for an appointment at a US embassy, consulate. You can write the purchase documents that time is of the essence and that the contract must close by a certain date....that will motivate the seller to ensure they have the docs notarized quickly.

Can you clarify where I would right that time is of the essence?

 

[supersnoop]

Can you clarify where I would right that time is of the essence?

In your initial offer. There should already be deadlines in you sales contract.

 

[disneyhutson]

Great just found out after passing ROFR (28 days), Estoppel (5 days) and closing paperwork that our sellers are from ENGLAND.. OH Boy so they have yet to return the closing paperwork after 9 days. Had I know it was foreign sellers I wouldn't had bought this contract. This is my first DVC purchase so lesson learned..But now just wanting some Pixie Dust to speed the sellers along.

 

[Lakegirl]

Great just found out after passing ROFR (28 days), Estoppel (5 days) and closing paperwork that our sellers are from ENGLAND.. OH Boy so they have yet to return the closing paperwork after 9 days. Had I know it was foreign sellers I wouldn't had bought this contract. This is my first DVC purchase so lesson learned..But now just wanting some Pixie Dust to speed the sellers along.

Hopefully now that this has been brought up maybe it will help others! Wishing posts of pixiedust for a speedy closing!!