Seller Backs Out After ROFR Passes

[Alexander]

Both Joe and Laura, I am so sorry this happened to you! What a total bummer! I would be so incredibly depressed! I don't have anything to offer in terms of legal mumble jumble, but I do know this really stinks! Best wishes to both of you in finding new good contracts!

 

[JoeEpcotRocks]

Thanks to all of you for your thoughts and support. I would have been really bummed if their hadn't been a similar contract available. Laura sent me a PM asking if it was a certain Mr. & Mrs. -- it was!

 

[palmtreegirl]

Sorry that happened to you, good luck to you on the new contract!

Just a note to others- Please don't think all sellers are like this, we are currently selling and have NO intention of backing out.

 

[wtpclc]

Thanks to all of you for your thoughts and support. I would have been really bummed if their hadn't been a similar contract available. Laura sent me a PM asking if it was a certain Mr. & Mrs. -- it was!

That is just wrong! Was is teh same broker? Either way, you should both let your broker/brokers that this happened. Maybe they can at leats spread teh word!

 

[JimMIA]

I would agree that the broker was most likely not a victim if the same broker agrees to relist. But if the seller were willing to go back on thier agreement with the buyer, I wonder why the seller didn't "stiff" the broker, too. Seems like there are lots of brokers out there, so why relist with the same one? Cheap is cheap and unethical is unethical. Have to wonder if the broker has/had some other leverage with the buyer? Or did they get their commission up front???

Or...get their commission EACH TIME! It DO cause one to wonder, don't it???

I also wonder if the original buyer has a cause of action against the broker? If it were me, I'd complain to that broker very loudly about the re listing and if I was sure it was the same seller and contract, I'd file a written complaint with the BBB even if I didn't have a legal cause of action - that wouldn't cost me anything except the price of a phone call and a stamp.

Or...go to my post on the Disney Vacation Club forum entitled "Problems/fraud in resales." There is a link there directly to the regulatory agency (Florida's Department of Financial Services), and you can fill out an online form and just click.

It may also be possible to go after the property itself, but I'm not a lawyer and don't know whether that can be done in this case. The seller may be on Mars, but the property is in Florida and it might be possible to do something with that. I know, in my law enforcement days, the dopers' lawyers used to always file a les pendens against their client's property to keep us from seizing it. That's like a lien on the property, which has to be resolved before the property can be sold.

Seems to me there would have to be some kind of legal standing to file that - lawsuit filed or pending, etc. In the case of the criminal defense lawyers, they had filed representation in the criminal case, so they had legal standing to secure their fees.

Of course, in Florida we have John Doe lawsuits, which you can file when you don't know exactly who the bad guy is. Maybe you could file a John Doe relating to that property, and then file a les pendens against the property. John Doe's also give you subpoena power. Hmmm...

If someone really had blood in their eyes, that might be something to ask a lawyer.

 

[Ergens2]

I am so sorry!!! I hope your next contract goes better!

 

[mbb]

Meaning they say we will offer to buy it from you at the same price as your buyer, if you are going to sell if for that amount only WE can buy it. BUT the seller can say no I will not sell it to you Disney I will go back to my buyer first and see if they want to raise their offer first.This allows the potential buyer another chance at buying it if they want to raise their price. Disney can come back on the next offer and excercise ROFR again or let it pass.This could go on indefinately.

I agree, MG...I too, thought that once Disney passed on the contract, that the sale was a done deal...???

Otherwise, you'll have sellers asking for $100 or more/point, and negotiating down from that...hmmmm...I have a feeling DVD would let a few of those contracts go!!LOL!

 

[JimMIA]

I agree, MG...I too, thought that once Disney passed on the contract, that the sale was a done deal...???

Otherwise, you'll have sellers asking for $100 or more/point, and negotiating down from that...hmmmm...I have a feeling DVD would let a few of those contracts go!!LOL!

Nope, as a matter of fact, that is exactly what happened in the cases of Joe and Laura. Both contracts were signed by the sellers, both were submitted to Disney, Disney waived ROFR on both, both buyers were ready to close, but the seller refused to sign the closing documents.

You can't force someone to sign the closing papers if they have no ethics...especially if they live overseas. Unless there is a way to go after the property itself as I mentioned above, but I think that is a real longshot.

The better answer is probably to buy from Disney in the first place. Over the term of the contract the difference in initial purchase price will be negligible.

 

[AnnMorin]

Disney's right of first refusal is to say "no if you are going to sell that for x amount of dollars I will pay that and you will get the x amount from me."
If you submit a contract to disney, and they excercise the ROFR the seller is NOT obligated to sell it to Disney as long as they don't sell it for that amount. They can go back to the buyer and say Disney wants it, if you would like it we can up your offer and resubmit. Disney can not force a seller to give it to them, they can only force the seller to not sell it at the low price.
The senerio I was giving is if disney did NOT pass on the ROFR. In my particular case I was more than happy to sell my points for a bit less than 59 a point. I needed the money and was aware that Disney could very well buy them back. I told the buyer that the lowest Vero to clear in the past month has been at 63 a point. That we were in all likelihood going to get ROFR'd. The buyer is aware of the procedure and did not want to raise their price and wanted to roll the dice. They already own DVC so it is not like they are ignorant. The closing agent told agreed that the chances of this passing are slim but I don't blame them for a second for wanting to try- it would be an amazing deal since I paid about ten dollars a point more for them.

IF DVD passes them they get a fantastic deal, if they do not pass them I will give them the option to up the offer and resubmit or I will just let Disney have the points back. Either way I get to pay off my bills and take a trip. There is nothing underhanded going on, the buyer knows what points cost and is hoping that Disney has too many vero contracts to deal with right now. Personally I would prefer to see the points go to this family rather than back to Disney who will make a big profit on them. But we will just have to wait and see what Disney does.

 

[JimMIA]

In the case of my first contract, we never got to ROFR. The owner was asking $74 pp for a 290 point OKW contract. I thought that was a fair price, so I accepted their price. They tried to dodge the realtor for a week. Finally, as we were approaching my 10 day window to withdraw, I told the realtor either they sign or we withdraw. They said they wanted more than their original asking price, which is a violation of their contract with the realtor, and clearly indicates that their listing was not offered in good faith. We said no and that was over.

We got another contract for 310 points at $73, passed ROFR, and just received the closing papers today. We hope to close next week and have no doubt that the sellers on this contract are legitimate, ethical people.

We never had a contract on the first deal, which makes my case less egregious than Joe's or Laura's, except for the next part. Miraculously, within a couple of days of our new contract being accepted by the legitimate seller, the first property showed back up listed again on the realtor's website -- now at 82, which is a terribly high price, even with honest sellers!

When you see stuff like that, you have to wonder. And I think I'll leave it at that.

 

[Maistre Gracey]

Nope, as a matter of fact, that is exactly what happened in the cases of Joe and Laura. Both contracts were signed by the sellers, both were submitted to Disney, Disney waived ROFR on both, both buyers were ready to close, but the seller refused to sign the closing documents.

You can't force someone to sign the closing papers if they have no ethics...especially if they live overseas. Unless there is a way to go after the property itself as I mentioned above, but I think that is a real longshot.

The better answer is probably to buy from Disney in the first place. Over the term of the contract the difference in initial purchase price will be negligible.

Jim, if a seller backs out after DVC exercises ROFR, then I think the resale broker has every right to charge them the commision. I don't forsee them going through these shenanigans repeatedly. Likely the money loss paying the commission will be more than the increased price.

I guess what I'm saying is the whole process must start from the beginning. You can't leave the contract in the lap of DVC during ROFR in order to have a bidding war between the prospective buyer and DVC.

On a somewhat related matter, my sister just signed a contract to sell her house. Less than 24 hours later she wanted out of the contract. She is unable to get out without some legal ranglings... enough where she decided to honor the contract.
Granted, this is a house in Connecticut vs a timeshare in Florida. I have no idea how different the rules may be.

MG

 

[JimMIA]

Jim, if a seller backs out after DVC exercises ROFR, then I think the resale broker has every right to charge them the commision. I don't forsee them going through these shenanigans repeatedly. Likely the money loss paying the commission will be more than the increased price.

I guess what I'm saying is the whole process must start from the beginning. You can't leave the contract in the lap of DVC during ROFR in order to have a bidding war between the prospective buyer and DVC.

Right, that's the misunderstanding I was trying to clear up with earlier posts. None of these three deals were in ROFR when the problem occurred.

My deal never got to ROFR. The seller backed out, despite the fact that that was a violation of their listing contract with the broker. I had no issue with the broker until they turned around and re-listed the property. In light of the facts that a) the seller was obviously not acting in good faith in the first instance, and b) the broker lost the commission they had every right to -- I find it very hard to understand what would persuade the realtor they should re-list. I'm sorry -- I just don't get it. I don't understand why a realtor would re-list with a seller who's already screwed them once...unless...

In Joe's case, and in Laura's case, they had contracts. The contracts went to ROFR and passed ROFR. Mickey was done. Closing documents were sent to buyers and sellers, and their sellers reneged on two contracts with the buyers and their listing contracts with the realtor. That's sleezy on the seller's part. It is the same broker I used, and if those two contracts turn back up on their inventory, I think you really have to wonder about the broker.

On a somewhat related matter, my sister just signed a contract to sell her house. Less than 24 hours later she wanted out of the contract. She is unable to get out without some legal ranglings... enough where she decided to honor the contract.
Granted, this is a house in Connecticut vs a timeshare in Florida. I have no idea how different the rules may be.

Wow, that's a tough one. Sometimes in those cases you just have to make a painful business decision. Forget right and wrong, you just have to decide whether or not you are going to go into the lawsuit business...because that is exactly what it is. I'm surprised that CT doesn't have more consumer-oriented real estate laws; probably because you haven't had some of the real estate problems we've had.

In Florida, both parties in any real estate transaction have 10 days from signing the contract to withdraw. That is detailed in all Florida real estate contracts, and an important protection that any DVC buyer should understand.

 

[Dean]

If you have a signed contract, by both you and the seller, under law you can force the sale. Your broker should know this!!!

The point I was making earlier is that it is not realistic to pursue this, esp for someone who is overseas. It's not really a legal issue but a practical one. Drop it and move in is the best option for both the buyer and broker. Disney is another matter and I doubt they care if they spend a few hundred dollars if they want to go that route.

I was under the impression that this was not so. I thought once DVC exercised ROFR, it was a done deal?

MG

No, DVC will allow you to back out or resubmit if you want. They don't have to but they have been willing so far.

The fact this happened with two buyers and the same seller is funny. Was it through the same broker? If so that would be very fishy and make me wonder if the broker isn't churning sales contracts for one reason or another. Maybe to test the ROFR waters for example. Or it could be related to a divorce or other issue where the parties are not equally motivated.

 

[JimMIA]

The point I was making earlier is that it is not realistic to pursue this, esp for someone who is overseas. It's not really a legal issue but a practical one.

Dean's exactly right. This is not a moral, or legal, or hopefully emotional decision. This is a business decision -- how much do I have to spend, and what are my prospects for getting more than I spend. It's ugly, but it's real-world, folks.

The fact this happened with two buyers and the same seller is funny. Was it through the same broker? If so that would be very fishy and make me wonder if the broker isn't churning sales contracts for one reason or another. Maybe to test the ROFR waters for example. Or it could be related to a divorce or other issue where the parties are not equally motivated.

Yes, same broker...but that's hardly surprising since Joe and Laura's sellers were one and the same. But also the same broker I had...not that there's anything wrong with that...

And Gawd I love it when somebody mentions churning contracts! SOMEBODY gets it! We're making headway!

 

[JoeEpcotRocks]

If the seller listed 2 contracts at the same time with the same broker, it possible that the seller could back out at the same time on both. When I went to post my situation on the DIS boards here, I saw Laura's situation at the same time under Becca's "Who passed ROFR" thread. I didn't realized until now that it appears to be the same seller.

In short, the broker could have gotten the bad news on both at about the same time and therefore not knowingly have listed a "bad" seller twice.

I don't think it would be worth the risk of Timeshare Store's reputation to be pulling any kind of tricks or knowingly listing bad sellers for a minimal (and short-term if word got out) gain. (Minimal as compared to their proable annual revenue.)

 

[Dean]

And Gawd I love it when somebody mentions churning contracts! SOMEBODY gets it! We're making headway!

LOL Jim. I think the folks around here can tell you that I'm going to see the details many others would miss. But it's good to have someone else harping on the mundane details to help keep folks out of trouble situations. And also to keep their feet on solid ground about what they rules are vs what they wished they were.

 

[JimMIA]

If the seller listed 2 contracts at the same time with the same broker, it possible that the seller could back out at the same time on both. When I went to post my situation on the DIS boards here, I saw Laura's situation at the same time under Becca's "Who passed ROFR" thread. I didn't realized until now that it appears to be the same seller.

In short, the broker could have gotten the bad news on both at about the same time and therefore not knowingly have listed a "bad" seller twice.

Oh, I agree. I will give them the benefit of the doubt and assume they would not knowingly list "bad" listings. And, if the two listings are from the same seller, I think it goes without saying they were listed at the same time.

Still, Joe...Laura was told on March 22 they had backed out...by the same person you talked to. You were told today they had backed out and the person you spoke to said they'd never heard of such a thing. That is simply not true; two days previously, that same person had been the bearer of bad tidings to Laura.

As things stand right now, I know we have two unscrupulous sellers (mine and yours/Laura's). I'll leave it at that for now, but if your contract and Laura's contract show up back in the broker's inventory like mine did...as a friend of mine likes to say, "That's a different kettle of fish!"

 

[JoeEpcotRocks]

Yes, JimMIA, we're in agreement. For the record, I got my news about mid-morning on the 23rd.

When Jason said this is the first time he could recall this happening, he may have counting 2 concurrent deals falling thru with the same seller as one happening. (And, I'll have to admit, I don't remember his exact words.)

But as you say, time will tell. I'm sure people will be paying attention more for the re-surfacing of bad sellers. I hope the brokers are!

 

[manning]

The next person who deals with this seller should make an offer to buy written by him/her. In that offer a clause should be included that states if the seller refuses to close he will bear all the expenses incurred to force performance (close the sale) and those expenses will be deducted from the sale price.

If the seller is foolish or careless to accept the offer he is on the hook to pay all legal expenses.

 

[SlyHubby]

Miraculously, within a couple of days of our new contract being accepted by the legitimate seller, the first property showed back up listed again on the realtor's website -- now at 82, which is a terribly high price, even with honest sellers!

It should just be a good lesson/warning to everyone - that no matter how "good" a real estate agent appears, first and foremost, they are the seller's agent and act in the best interests of the seller.