Question about resale with a "can't close until <insert date>" designation

[SFlaDisneyfans]

Has anyone bought a resale that can't close until a future date? If so, how does it affect the purchase? If there is an agreed upon price and a contract, does it get signed immediately; does the down payment get paid immediately; when does it go for ROFR etc.

Thanks in advance for any info that can be provided.

 

[disneynutz]

The owners have a vacation scheduled that they want to keep. The purchase proceeds just like any purchase, you just don't close until after the date indicated. If the delay causes you as the buyer a problem, you can negotiate a price adjustment. Specifics are up to the parties involved and the broker can provide you with more info.

Bill

 

[Mil leech]

I put an offer in for a "cannot close until August 23rd" contract in April. We completed the contract including the down payment, sent it to Disney, and Passed ROFR in May. Now we wait. We will get the closing documents at the beginning of August so we can close when they return from their cruise. I am guessing everything will be signed and they will submit the closing documents to Disney on the day they return.

 

[SFlaDisneyfans]

I put an offer in for a "cannot close until August 23rd" contract in April. We completed the contract including the down payment, sent it to Disney, and Passed ROFR in May. Now we wait. We will get the closing documents at the beginning of August so we can close when they return from their cruise. I am guessing everything will be signed and they will submit the closing documents to Disney on the day they return.

Thanks for the info. I was kind of wondering if you had to wait until the "close date" and then go through ROFR (which would suck). If you dont mind me asking, were you able to negotiate a more favorable price due to the extended closing date?

 

[tb1972]

We purchased an add on contract back in April and the seller could not close until today, June 27th. They had their last DVC trip planned which ended earlier this week. Today I was notified by the broker the seller backed out...they enjoyed their vacation and decided not to sell after all. I don't know if this is typical or not with changing their mind after a trip...I hope not. I'm very upset with this incident and would not want anyone to experience it.

 

[iluvthsgam]

We purchased an add on contract back in April and the seller could not close until today, June 27th. They had their last DVC trip planned which ended earlier this week. Today I was notified by the broker the seller backed out...they enjoyed their vacation and decided not to sell after all. I don't know if this is typical or not with changing their mind after a trip...I hope not. I'm very upset with this incident and would not want anyone to experience it.

That's terrible - did you sign a contract? / put down a deposit?

 

[cvjw]

We just sold one of our contracts with a "can't close until June 9th" clause. As PP stated, you do everything like a normal contract, except that the contract does not change hands until after the close by date. We put our contract on the market in February, and had a buyer in a couple of days. I guess they didn't need the points for a while. We signed the contracts, passed ROFR and then waited until June to close. FYI - since everything was ready, the contract was closed around June 10th - right after we returned from our vacation.

You had inquired about a price reduction for a later closing. I will tell you our experience. Our contract had no 2013 points, and a delayed closing of several months, and the buyers offered us $3 a point under our asking price ($58 for a 150 point SSR contract). If we had've waited a month, we could have made more money since the resale prices are up significantly.

 

[tb1972]

That's terrible - did you sign a contract? / put down a deposit?

Yes we did sign a contract, paid deposit, passed rofr and paid the final balance. Now we wait for our full refund and find another contract. Really disappointed today.

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[SFlaDisneyfans]

We purchased an add on contract back in April and the seller could not close until today, June 27th. They had their last DVC trip planned which ended earlier this week. Today I was notified by the broker the seller backed out...they enjoyed their vacation and decided not to sell after all. I don't know if this is typical or not with changing their mind after a trip...I hope not. I'm very upset with this incident and would not want anyone to experience it.

Is there some sort of monetary penalty for breaking a signed real estate sales contract?

 

[tb1972]

Is there some sort of monetary penalty for breaking a signed real estate sales contract?

I thought there would be, but to get a lawyer involved would just be an expense for us. The broker didn't think it was worth it either. He had seen a few of these cases in his experience selling Dvc timeshares. He said it is rare and happens in their company about twice per year.

I guess we just move on and hopefully a better contract pops up.

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[twinsouvenirs]

Is there some sort of monetary penalty for breaking a signed real estate sales contract?

That's what I was going to ask! There should be some penalty for the seller not going through with the contract.

You could sue for specific performance but that would probably be expensive too...(I am not a FL licensed atty) http://www.trulia.com/voices/Home_Selling/The_seller_wants_to_back_out_on_a_ratified_contrac-212614

 

[ELMC]

Is there some sort of monetary penalty for breaking a signed real estate sales contract?

If a buyer backs out, they lose their deposit. If the seller backs out, the buyer can sue them to force them to perform, but that is unrealistic and costly. The seller is technically obligated to pay the full sales commission, but brokers might be reluctant to enforce this for fear that it might damage their reputation. So basically, there's nothing that anyone can do really. It's one of the downsides of buying resale, but happens so infrequently that you shouldn't really give it much weight.

 

[CarolMN]

If a buyer backs out, they lose their deposit. .......(snip).....

I'm not so sure this is true with timeshares in Florida since the buyer has 10 days to rescind. I believe the deposit must be returned. Could be wrong.

 

[tb1972]

If a buyer backs out, they lose their deposit. If the seller backs out, the buyer can sue them to force them to perform, but that is unrealistic and costly. The seller is technically obligated to pay the full sales commission, but brokers might be reluctant to enforce this for fear that it might damage their reputation. So basically, there's nothing that anyone can do really. It's one of the downsides of buying resale, but happens so infrequently that you shouldn't really give it much weight.

That's what the broker said also, in FL it is hard to collect his commission when a seller backs out. He said the time and expense to attempt to collect aren't worth it.

We bought resale before and didn't have any issues. Hopefully, today's experience is an isolated one.

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[twinsouvenirs]

I thought there would be, but to get a lawyer involved would just be an expense for us. The broker didn't think it was worth it either. He had seen a few of these cases in his experience selling Dvc timeshares. He said it is rare and happens in their company about twice per year.

I guess we just move on and hopefully a better contract pops up.

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You could also get a lawyer to write a demand letter for some kind of monetary compensation for the time lost.

 

[Missyrose]

You could also get a lawyer to write a demand letter for some kind of monetary compensation for the time lost.

And that lawyer would cost far more than anything you could possibly hope to get from those sellers. It's best the OP do what he's doing, simply moving onto the next deal.

 

[twinsouvenirs]

letters are sometimes cheap-$200?

 

[Sandisw]

letters are sometimes cheap-$200?

Maybe, but if the seller backed out like they did, then the chances that they actually would respond with some sort of monetary compensation just from receiving a letter would, IMO, be small..

 

[JimMIA]

We purchased an add on contract back in April and the seller could not close until today, June 27th. They had their last DVC trip planned which ended earlier this week. Today I was notified by the broker the seller backed out...they enjoyed their vacation and decided not to sell after all. I don't know if this is typical or not with changing their mind after a trip...I hope not. I'm very upset with this incident and would not want anyone to experience it.

This kind of thing is always a risk, and I would say the longer the delay in closing the more likely a problem will come up. In your case, you really had a pretty short delay and still had problems.

From both a seller's perspective and a buyer's perspective, I think "can't close until..." contracts are really unattractive propositions. Just too many things can come up, even if all parties are fully knowledgeable and completely above-board...which is not always the case.

 

[tb1972]

This kind of thing is always a risk, and I would say the longer the delay in closing the more likely a problem will come up. In your case, you really had a pretty short delay and still had problems.

From both a seller's perspective and a buyer's perspective, I think "can't close until..." contracts are really unattractive propositions. Just too many things can come up, even if all parties are fully knowledgeable and completely above-board...which is not always the case.

I agree with you. Going forward, I don't think I'll pursue an extended closing contract. We bid on this one and the seller demanded full asking price which we gave. We didn't know about the seller's vacation / extended date until a few weeks in to it.

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