Resale contract questions

[Corwin]

I'm reviewing paperwork for a resale purchase. There are a few things mentioned that I wanted to ensure are typical:

1. The contract states that the buyer (me) is responsible for closing costs (approximately $450).

2. The contract states that the buyer (me) is responsible for the annual dues on the current year's (2010) point allocation, and that this must be paid in full at the time of closing. Is this the norm? (Also, after closing, can I ask if I can pay the dues monthly instead of annually?)

3. I'm to receive the 2010 point allocation, the 2011 point allocation, and "all points from closing forward." (The 2009 points have apparently been used already.) Any issues with this?

Thanks!

 

[Sandisw]

Closing costs and MF's are all part of a resale negotiation between a buyer and a seller.

Some buyers pay both, some pay one and not the other, and in some cases, the buyer negotiates to pay neither. As the buyer, you are free to put in an offer for whatever terms you want.

It sounds like your offer to the seller included that you were okay paying those charges.

And, with a resale, MF's are settled up at the time of the closing, so there is no way to spread them out. If you the buyer are responsible, then you pay in full at closing. If the seller has agreed to pay them, then they pay them in full before the closing.

 

[disneynutz]

I suggest that you contact your Broker and discuss it with them.

Bill

 

[chalee94]

1. The contract states that the buyer (me) is responsible for closing costs (approximately $450).

normal.

1. The contract states that the buyer (me) is responsible for the annual dues on the current year's (2010) point allocation, and that this must be paid in full at the time of closing. Is this the norm?

normal. (you get the use of the 2010 pts, so you pay the dues.)

(Also, after closing, can I ask if I can pay the dues monthly instead of annually?)

yes, you can set up a monthly draft of your checking account with DVC if you want. but if you want to pay by credit card, it's all or nothing once per year.

2. I'm to receive the 2010 point allocation, the 2011 point allocation, and "all points from closing forward." (The 2009 points have apparently been used already.) Any issues with this?

normal.

it's nice to get 2009 pts but only becomes a "stripped" contract IMO when 2010 and potentially 2011 pts have been used...

 

[RCM]

You have to negociate who pays what when you make an offer. I am waiting for ROFR of 50 pts. The seller will be paying the closing costs.

 

[Crystal_27]

Closing costs and the payment of MFs are certainly negotiable. I would never pay for all of the closing costs if I was the buyer!! However, as to the MFs, since you are getting all 2010 points, I think that there is an argument to be made that you should pay for all of the MFs. Still, if you've gotten to the point where you have a contract in-hand, since you didn't bring those items up in your negotiation, you might be stuck paying for them.

 

[Corwin]

1. The contract states that the buyer (me) is responsible for closing costs (approximately $450).

normal.

1. The contract states that the buyer (me) is responsible for the annual dues on the current year's (2010) point allocation, and that this must be paid in full at the time of closing. Is this the norm?

normal. (you get the use of the 2010 pts, so you pay the dues.)

(Also, after closing, can I ask if I can pay the dues monthly instead of annually?)

yes, you can set up a monthly draft of your checking account with DVC if you want. but if you want to pay by credit card, it's all or nothing once per year.

2. I'm to receive the 2010 point allocation, the 2011 point allocation, and "all points from closing forward." (The 2009 points have apparently been used already.) Any issues with this?

normal.

it's nice to get 2009 pts but only becomes a "stripped" contract IMO when 2010 and potentially 2011 pts have been used...

Thanks! This is exactly the information I was trying to determine.

I realize that I could have made an offer that included the seller paying the closing costs or paying for next year's MF, but I just wanted to follow the standard industry practice.

Closing costs and the payment of MFs are certainly negotiable. I would never pay for all of the closing costs if I was the buyer!!

Really? In every other real estate transaction that I've ever conducted, the buyer has paid the closing costs, which according to the information I received covers "title insurance, recording of the deed, and guarantee of free and clear title."

It is my understanding that the seller would pay any sales commission, which is typical of other real estate transactions I've conducted in the past.

...However, as to the MFs, since you are getting all 2010 points, I think that there is an argument to be made that you should pay for all of the MFs.

This makes sense.

Still, if you've gotten to the point where you have a contract in-hand, since you didn't bring those items up in your negotiation, you might be stuck paying for them.

I suspect that you are correct.

However, it appears that I'm not doing anything out of the ordinary. Right?

 

[Tikihula]

Thanks! This is exactly the information I was trying to determine.

I realize that I could have made an offer that included the seller paying the closing costs or paying for next year's MF, but I just wanted to follow the standard industry practice.

Really? In every other real estate transaction that I've ever conducted, the buyer has paid the closing costs, which according to the information I received covers "title insurance, recording of the deed, and guarantee of free and clear title."

It is my understanding that the seller would pay any sales commission, which is typical of other real estate transactions I've conducted in the past.

This makes sense.

I suspect that you are correct.

However, it appears that I'm not doing anything out of the ordinary. Right?

Right! Closing costs and MFs are actually negotiable, but it does make sense for the buyer to pay MFs for 2010. Some buyers do put in their offer that buyer and seller split closing costs and/or MFs. It doesn't hurt to try. Just be aware that if another buyer comes in with a full price offer, including paying for closing and MFs, you could be out of luck.

 

[drusba]

With resales you should not assume anything is "normal" because you can negotiate on closing costs and dues but you need to have made it part of your offer because the assumption is that buyer pays closing costs (always an assumption) and dues (not always an assumption except to pay the pro rata portion left for the year) unless negotiated otherwise. Your experience of always paying closing costs on any real estate transaction only means you did not try to negotiate.

Also, on resale, all outstanding dues for the calendar year must be paid (by seller or buyer) and you cannot set up monthly payments for this year. You can after a purchase through Disney set up monthly withdrawal of dues beginning next calendar year.

 

[dmoore22]

With resales you should not assume anything is "normal" because you can negotiate on closing costs and dues but you need to have made it part of your offer because the assumption is that buyer pays closing costs (always an assumption) and dues (not always an assumption except to pay the pro rata portion left for the year) unless negotiated otherwise. Your experience of always paying closing costs on any real estate transaction only means you did not try to negotiate.

Also, on resale, all outstanding dues for the calendar year must be paid (by seller or buyer) and you cannot set up monthly payments for this year. You can after a purchase through Disney set up monthly withdrawal of dues beginning next calendar year.

We purchased a resale, then an add-on resale. This was about ten years ago. With the initial contract, after the closing, we contacted DVC about monthly automatic withdrawals for the MFs. We faxed DVC the requested info and life was good. It was painless. With the add-on the seller agreed to pay the first years MF fees. Also painless. Perhaps things have changed since we purchased. Check with your broker and don't be afraid to call DVC for clarification. Remember, your treated no differently than someone who purchased directly from DVC.

 

[cvjw]

Paying for closing costs and maintenance fees is negotiable. With our first DVC resale contract, we paid for both because we didn't know any better - we did negotiate the seller down a couple of dollars from the asking price though. As we have added on more contracts, we always end up with the seller paying at least half of the fees. We have not had a seller say "no" to our requests yet. We currently have a contract at Disney for ROFR now, with the seller paying all of the maintenance fees, and the contract has '08, '09 and '10 points. If Disney does buy it, we will just try again, as we are not desperate for extra points right now.