Getting paid after you sell a contract

[Cyberc1978]

Just wondering when you actually should expect to received the funds from the sale?

I have sold a few contracts and I would normally expect to receive my funds when the membership transfer or disappear from my dashboard on the membership website. That way if I have used any points belonging to the buyer the title company could deduct funds from the proceeds going to me. This would normally happen 2-3 weeks after closing.

At my most recent sale I had received my money on the date that the contract was closed, however I still have the contract and points on my dashboard so the contract have not yet been transferred.

I’m wondering if this was an error as I could potentially use the sold points and there wasn’t much anyone could do - or am mistaken?

regards.

 

[MICKIMINI]

It is a slow go these days. I didn't keep track, but it seemed like nearly a month to get points from the two OKW contracts I bought in the fall. Today, I sent a check overnight for a HHI contract I bought recently AFTER I received confirmation from the closing agent yesterday that the sellers docs had been received. I'll probably have to wait another month to receive those points...some of which are 2019 points which I need to get rid of ASAP.

Good luck!

 

[KAT4DISNEY]

When we've sold we've also received immediately but then DVC was also transfer more quickly. In any regard it would be breaking the contract and yes, you could try and use them but sometimes ethics have to kick in. I'd think that the escrow company might be held responsible if they had sent the payment and points were used after that and they couldn't recover from the seller but not certain.

 

[Cyberc1978]

When we've sold we've also received immediately but then DVC was also transfer more quickly. In any regard it would be breaking the contract and yes, you could try and use them but sometimes ethics have to kick in. I'd think that the escrow company might be held responsible if they had sent the payment and points were used after that and they couldn't recover from the seller but not certain.

im honestly just puzzled about it, I didn't expect to receive the funds until after the contract had transferred as that would be the correct time (for in my mind), and all of sudden the title company calls to verify bank account info and an hour later money was in my account.

 

[KAT4DISNEY]

im honestly just puzzled about it, I didn't expect to receive the funds until after the contract had transferred as that would be the correct time (for in my mind), and all of sudden the title company calls to verify bank account info and an hour later money was in my account.

I do think it's a gap or fault in the system as an escrow agent really ought to verify everything is satisfied on both ends and this leaves the buyer in a vulnerable position from an unscrupulous seller. Of course they may just be recognizing that no DVC owners are like that.

 

[Great3]

Thanks goodness 99.99% are honest. Although a pain to go thru, most contracts have a price per point that seller must reimburse buyer if points are less than agreed upon. Of course actually collecting is a different story, but with contracts signed, most suits would go in favor of the buyer if this happens.

Great3

 

[Sandisw]

Just wondering when you actually should expect to received the funds from the sale?

I have sold a few contracts and I would normally expect to receive my funds when the membership transfer or disappear from my dashboard on the membership website. That way if I have used any points belonging to the buyer the title company could deduct funds from the proceeds going to me. This would normally happen 2-3 weeks after closing.

At my most recent sale I had received my money on the date that the contract was closed, however I still have the contract and points on my dashboard so the contract have not yet been transferred.

I’m wondering if this was an error as I could potentially use the sold points and there wasn’t much anyone could do - or am mistaken?

regards.

I have always received payment immediately Upon closing. I know some title companies hold funds..my seller had to wait this summer, which was tough since it was 5 weeks until it showed up in my membership. .

But, I got paid for my BWV in late June Day of closing and a full month before it was gone. And yes, a dishonest seller could book a quick trip and use points. Not sure what the title company does then to get the funds from sellers.

 

[supersnoop]

In theory, once the estoppel is issued, the contract should be locked and you shouldn't be able to use or move any points. In theory. That's the whole point of an estoppel.

 

[Cyberc1978]

Thanks goodness 99.99% are honest. Although a pain to go thru, most contracts have a price per point that seller must reimburse buyer if points are less than agreed upon. Of course actually collecting is a different story, but with contracts signed, most suits would go in favor of the buyer if this happens.

Great3

I can't remember if my contract have that, but still, since I have received my funds its more difficult to get some of them back, should I have used any points belonging to the buyer. Say points had been used, and now the buyer dont want to own that contract any more - then what?

 

[Cyberc1978]

In theory, once the estoppel is issued, the contract should be locked and you shouldn't be able to use or move any points. In theory. That's the whole point of an estoppel.

Yes if the contract had been locked to avoid any further use, then an owner couldn't use it - but what if the buyer to decides to default or not complete the sale another way, then the owner still have a contract which he can't use - thats not forever but still I would assume that the contract would be locked for quite some time.

How do you balance Sellers and Buyers interests equally?

 

[Cyberc1978]

.... I know some title companies hold funds..my seller had to wait this summer, which was tough since it was 5 weeks until it showed up in my membership. .

This is what I have experienced when I previously sold contracts, funds are held until title company hear back from Disney that the transfer is complete. This is also most "fair" to all parties involved, everybody gets what they are entitled to one way or another.

 

[Sandisw]

Yes if the contract had been locked to avoid any further use, then an owner couldn't use it - but what if the buyer to decides to default or not complete the sale another way, then the owner still have a contract which he can't use - thats not forever but still I would assume that the contract would be locked for quite some time.

How do you balance Sellers and Buyers interests equally?

Personally, I think it would be tough for DVD to get involved with holds etc because as you said, there could be complications down the line with a buyer.

I think typically, the transfer happens rather quickly but lately not so much. I’d say if a title company released funds before confirming its all transferred correctly, they’d have to figure it out. Maybe the ones that don’t wait have so few issues it’s not worth it to continue holding.

 

[Cyberc1978]

Personally, I think it would be tough for DVD to get involved with holds etc because as you said, there could be complications down the line with a buyer.

I think typically, the transfer happens rather quickly but lately not so much. I’d say if a title company released funds before confirming its all transferred correctly, they’d have to figure it out. Maybe the ones that don’t wait have so few issues it’s not worth it to continue holding.

Is there any downside for the title company's if they held on to the funds until transfer is complete?

 

[Sandisw]

Is there any downside for the title company's if they held on to the funds until transfer is complete?

Not sure, but I can’t think of one. Since I have sold so many over the years...6 or 7...and never not been sent my money at closing, I was surprised to hear some have had to wait.

We also know things are taking so much longer to transfer now we may be more aware. But, I sold in Dec 2019, and it took about 2 weeks after we closed, and I was paid for it to go. I was so worried every time I booked, especially since before we closed, I screwed up and used the contract....DVCM graciously helped me fix my mistake by removing the holding penalty.

 

[KAT4DISNEY]

In theory, once the estoppel is issued, the contract should be locked and you shouldn't be able to use or move any points. In theory. That's the whole point of an estoppel.

Theoretically as you say it should work that way but there's never been a single indication that is what DVC does. They do keep increasing that estoppel fee though!

 

[KAT4DISNEY]

Is there any downside for the title company's if they held on to the funds until transfer is complete?

In theory that is exactly what they should do. The reason for an escrow account is to protect both sides in the transaction but in issuing the funds immediately before the transfer they are not.

 

[Great3]

I can't remember if my contract have that, but still, since I have received my funds its more difficult to get some of them back, should I have used any points belonging to the buyer. Say points had been used, and now the buyer dont want to own that contract any more - then what?

Here in the US, these timeshares are treated like regular real estate transactions. Once both the seller(s) and buyer(s) turns in their paperwork, and money sent to the title company, the title company closes the transaction and sends for recording, the "deal" is done, the buyer is the new owner of the "real estate" or timeshare in this case, and title company releases funds to seller, usually immediately, sometimes with slight delays of some days. The title company does not get involved if seller fail to hand over the keys to the house to buyer, or if seller refuses to vacate the house seller just sold to buyer (I.E, buy needs more time, say 2-3 day to continue moving out). This than becomes a civil issue between seller and buyer to settle if not specified in the contract ahead of them. Some contracts will specify penalties (or lease by the day charge to seller) for failure of seller to move out the day of closing. So, when the transaction is closed and recorded, the buyer is the legal owner of the timeshare, whether or not DVC updated the paperwork to reflect the new buyer from seller. Meaning, you as the seller don't have legal right to do whatever you want to the "real estate" even if DVC thinks you the seller is the current owner. Real Estate laws follows the recording in the county office, not the owner of record that DVC maintain. Of course, this means nothing to the buyer until DVC updates the ownership to the new buyer.

So yes, seller can mess things up by using points they no longer legally own once the transaction closes and is recorded. In this case, buyer can no longer change their mind, the deal is already done. If buyer wants to change their mind, they have to sell the "real estate" they now already legal own by the fact that they sent in the closing paperwork, payment sent in, and funds distributed to seller, transaction closed, and recorded.

So while problems can arise after closings, like seller holdover from vacating the building (or using points they no longer own in this case of DVC timeshare), thankfully it's rare as seller understands their legal obligation once the seller sent in closing documents, receive funds disbursement, after transaction closed and recorded by title company.

Hope that make more sense.

Great3

ETA to Add: If the buyer refuses to have DVC update ownership to themselves after transaction closing, they are shooting themselves in the foot, in that they are still the legal owner of the timeshare as of the recording, money already long gone and disbursed to seller, and the seller continues to enjoy usage of the "real estate" from the buyer, meaning the buyer gets nothing. Of course, no buyer in their right mind would do this, change their mind after transaction closing and funds gone. The time to change your mind as buyer is before closing and endure whatever penalty the contract calls for failure to close transaction.

 

[Great3]

In theory, once the estoppel is issued, the contract should be locked and you shouldn't be able to use or move any points. In theory. That's the whole point of an estoppel.

Estoppel does not lock any DVC contract. Estoppel is just a verification of what the seller actually owns (# of points / UY / and resort of the DVC contract), and an accounting of the seller's standing in relationship to Maintenance Fee's dues being paid or outstanding, as well as any debt still owed on the ownership interest if any (I.E. paid off, or if title company needs to send funds to "mortgage holder" [DVD in this case]) in order to properly close the transaction and send for recording.

So, it's all verification by DVC to the title company. You can request a copy of the estoppel docs if want from the title company. Again, it doesn't lock anything, please do not think that.

Great3