Seller Backs Out After ROFR Passes

[crisi]

We made an offer on a contract at the listing price. Seller took 72 hours to decide they wanted more money. We then made an offer on another listing.

According to the agent, the contract we'd made an offer on was owned by THREE families, and one wasn't as interested in selling as the other two - at least not at the going price at that time.

 

[CarolMN]

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.

This sounds good, but you still would have the problem of collecting (to say nothing about getting a clear title or use of the membership while you try to force performance). Not an easy task if the seller is not a U S citizen and resides outside of the US. It would be way more expensive than it is worth to force perfomance, IMHO.

Best wishes -

 

[JimMIA]

We made an offer on a contract at the listing price. Seller took 72 hours to decide they wanted more money. We then made an offer on another listing.

According to the agent, the contract we'd made an offer on was owned by THREE families, and one wasn't as interested in selling as the other two - at least not at the going price at that time.

I think what you are seeing with these examples is the realtors involved are not doing any qualifying or due diligence on their sellers. I wouldn't be surprised if they are telling the sellers, "Put the listing out there and see what happens. If you don't like the price, don't accept the offer. If you change your mind, nobody can force you to sign that warranty deed transferring the property."

You couldn't get away with that if you were selling $600,000 homes, but with small contracts like these, as Carol and many others have said, it just makes no financial sense to try to force them to close. The buyer has no practical recourse.

 

[DrTomorrow]

ITA with both CarolMN and JimMIA.

Carol's point is well-taken. Many people think that once the judge has ruled in their favor, the battle's over. Far from it; just because you have a judgement doesn't mean the loser is going to gladly sign a check, or deed, or whatever.

I've often thought what Jim said - that these folks have just seen an opportunity (the American way!) to make money by brokering timeshares; but since timeshares have such a shady reputation, and there isn't a single, clean way to value them, there's a lot of wiggle room in the process. I'd be curious to hear what one of these brokers requires a potential seller - and buyer - to go through; I know what buying and selling a house takes....

Be well!

 

[manning]

The contract governs the sale.

This seller has disappointed several buyers.

What I am trying to point out are ways to slow down or stop this seller.

Unless he is careless or foolish he will not accept this contract, thus avoiding the next step. Going to the ROFR.

If he is crazy enough to accept the contract he runs the risk of dealing with someone who is crazy enough to enforce it. And I don't think he wants to deal with those headaches.

I am no lawyer, but I wonder if it is possible to file a lien against his interest based on the contract showing you have an interest in the property (it will show up on the title search). If so, this stymies him from selling to someone else and his only recourse is to complete the sale or convince the buyer to withdraw (for a price).

 

[CarolMN]

..(snip)....
I am no lawyer, but I wonder if it is possible to file a lien against his interest based on the contract showing you have an interest in the property (it will show up on the title search). If so, this stymies him from selling to someone else and his only recourse is to complete the sale or convince the buyer to withdraw (for a price).

I'm not a lawyer, either, but this is a fun discussion so ----

Even if you could file a lien or some other claim against the title, you might still have a problem. (Not sure if you can do that in this situation, but let's assume you can. Maybe Jim knows). The seller could turn around and file some type of counter claim against you. (Remember, our assumption is that the seller is, at best, unethical). Now that would cost you time and money to get rid of even though it is bogus. Most lawyers are pretty expensive!


Best wishes -

 

[JimMIA]

I'm not a lawyer, either, but this is a fun discussion so ----

Even if you could file a lien or some other claim against the title, you might still have a problem. (Not sure if you can do that in this situation, but let's assume you can. Maybe Jim knows). The seller could turn around and file some type of counter claim against you. (Remember, our assumption is that the seller is, at best, unethical). Now that would cost you time and money to get rid of even though it is bogus. Most lawyers are pretty expensive!


Best wishes -

For a lien, I believe the person has to actually owe you something. For example, if a workman does work on your house and you don't pay them, they can file a mechanic's lien against your property. So I don't think a lien would apply here.

If someone were really interested in going after a seller, they should see a lawyer.

I still believe the best course of action for anyone who has been wronged is to contact the regulators. It's free, no risk, and it's easy.

 

[Beca]

I'm SOOO sorry!!! I know how excited you were to get thru ROFR!!!


Good luck on the next one!!!



Beca

 

[bobbiwoz]

Does the broker get a commission since he has found a buyer, or does the seller who backs out so late in the deal get away free and clear? I think from what has been said, that because the commission is a small amount of money, even the broker walks away empty because it's not worth while to pursue.

Bobbi

 

[Dean]

As I understand it, you'd have to have a judgment or true mortgage to file any lien. And as a practical matter, it's not worth it. The brokerage would be in a much better position to go after it but I'd guess they won't. And if they did, it'd be for their commission and not the sale. The real question is whether the agent is "in on it" in some way. That would be far easier to deal with in many ways. One might want to complain to the state government about it if they wanted to proceed and "protect others". No way to go after the seller without getting the broker dirty through the government though.

 

[JoeEpcotRocks]

Thanks Beca! I'll let you know when the new contract is submitted to Disney.

When I talk to Jason (Timeshare Store) on Monday I'll ask him what they're going to do about the seller. (They can't really force him to sell.) I hope he notifies Disney about the seller's breach of contract. I don't have reason to believe Jason did anything wrong in this situation.

Sellers don't have to put up any money. Perhaps that should change. Even if the contract specified penalties for breach of contract, tough to get money from a seller across the ocean, unless he sumbitted some money up front. I hope this seller is blacklisted. Some up thread have mentioned legal action. I think this would be tough in this particular case, unless Disney chose to do something. I wonder if Disney could put their points under lock and key.

Oh well, I'm not going to let a bad egg spoil my family's disney magic. I'm optimistic about our new contract.

At least we hadn't planned a vacation until 2006 anyway.

 

[Dean]

I hope he notifies Disney about the seller's breach of contract.

It doesn't matter if they do. If they are in good standing from a fee standpoint, DVC will not get involved. They will not contact the member about it and they will not warn anyone if the person tries to sell again later. I suspect it'd find the circular file from the first person who sees it. The only way Disney would care would be if the person kept putting them through ROFR multiple times, but even then I doubt they'd follow up in any way.

It'd be interesting to see what DVC told the potential buyer if asked about this though. There is just something fishy about this. There has got to be a story behind it that I'd love to know. Of course it could be related to the extra tax withheld from foreign buyers though I suspect they could by pass it if they did it privately.

 

[JimMIA]

There is just something fishy about this. There has got to be a story behind it that I'd love to know.

As has been said several times by different posters, the proof of "fishy" will be if those contracts pop back up in the realtors inventory relisted at a higher price. If they do, as mine did, there is something rotten.

 

[JimMIA]

Of course it could be related to the extra tax withheld from foreign buyers though I suspect they could by pass it if they did it privately.

That could very well be a factor, because all of the recent failures have been overseas sellers (Argentina and UK). The foreign investment tax is 10%, and when you add that to the 10-12% commission and the DVC transfer fee, there are a lot of costs coming out of the proceeds of a foreign seller's sale. On an $80 pp sale, they might not be getting much more than $60 in actual proceeds.

A prudent seller would research that, of course. If they are going to offer contracts and enter into agreements, they have an obligation - not only to themselves, but also to the other parties - to understand what they are doing. It also seems like an ethical realtor would make all of the costs known up front. I assume they do, but when I see posts from foreign owners saying "what's this tax?" I have to wonder.

With all that background noise going on, plus the fact that the buyer has no recourse if the seller defaults, I just wouldn't even consider making an offer if the seller is outside of the US.

I know foreign owners won't think that's fair (and I didn't say it was), but there is no sense in wasting a bunch of time, missing other good contracts, and then having the whole thing fall through in the end.

 

[Jason@dvcstore]

I am Jason from The Timeshare Store, Inc. and I feel I need to respond to this thread that has started and I just want to clarify two issues.

1) Both contracts that were not returned were from the same seller in the UK(it was a 150 and a 80). When he refused to sign the documents it was the first time it had happened to me. That seller's properties will never be posted with us again.

2) As an associate at The Timeshare Store, Inc. we work as transaction brokers meaning we represent the buyer and the seller. Florida law states "this aspect of limited respresentation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party."

I hope this clears things up.
Jason

 

[disneykidatheart]

Hello All--

Thanks for a most interesting discussion! For the record, I recently became a DVC member using the same Resale store. I did not have my deal through Jason. However, I spoke at great length with two other brokers. I was more than satisfied with the service provided. If I could have any complaint it would be that it seemed to take a long time to get the deal through. It probably wasn't that long but my anticipation was so great it seemed like it took forever!! I had my suitcase packed for Disney almost from day one--just kidding, but it is hard to sleep with my Mickey ears on.

 

[DBBN]

Jason,

Thanks for taking the time to post facts associated with these contracts.

I am very pleased to hear sellers who don't honor their agreement will not be able to re-list their contracts with you. I considered your office no less a victim than we were when a seller from the UK backed out on an agreement we had for 386 OKW points. I confess - one criteria necessary for us to consider a contract - sellers must be in here in the US.

Thank you Timeshare Store for providing first class service when we purchased 2 - 300 point OKW contracts last year. I look forward to working with the brokers in your office again sometime soon.

 

[Dean]

I am Jason from The Timeshare Store, Inc. and I feel I need to respond to this thread that has started and I just want to clarify two issues.

1) Both contracts that were not returned were from the same seller in the UK(it was a 150 and a 80). When he refused to sign the documents it was the first time it had happened to me. That seller's properties will never be posted with us again.

2) As an associate at The Timeshare Store, Inc. we work as transaction brokers meaning we represent the buyer and the seller. Florida law states "this aspect of limited respresentation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party."

I hope this clears things up.
Jason

Jason, is there anything you can pass on as to related info. I know you can't speak to a lot of specifics but can you state the reasons given by the seller? And would you be able to comment on TSS approach to this issue.

I'm assuming Jim's issue was not with the TSS since he said it was re-listed with the same broker and I'm sure he would have said so if it was the same as these 2 contracts.

 

[manning]

Jason-

Out of curiousity, if the buyer decided he really wanted those points and is willing to pursue it, what would he have to do??

 

[JimMIA]

I'm assuming Jim's issue was not with the TSS since he said it was re-listed with the same broker and I'm sure he would have said so if it was the same as these 2 contracts.

No, actually my contract was also through The Timeshare Store, although Jason is not the agent who handled it. It is their contract number OKW290-09-0223 for 290 OKW points, currently priced at $82 per point, and still in their inventory on the DVC Resales listing at the top of this page.

There is a difference between that contract and the two UK contracts last week. In the UK contracts, the seller signed contracts agreeing to sell, the contracts went through and passed ROFR, and then the seller refused to close.

In my case, the contract was originally offered at $74 per point. A listing at a particular price is an offer to sell at that price. I accepted the offer at the asking price and the contract was forwarded to the sellers in Argentina. They stalled for several days, at first not responding to TTS' inquiries, then the wife said she had to talk to the husband, etc. I told Pat Spell that if they did not accept by the expiration of my 10 day cancellation period, I was going to withdraw the contract. Finally they responded, saying they now wanted more than their asking price for the contract - an obvious sign that they never offered the property in good faith in the first place. I did not feel the seller was acting ethically, so I declined to pay more than the asking price and the contract was dead.

I submitted a new offer on a different property, also through Pat. That offer was accepted, passed ROFR, and we hope to close next week. At that point, I had nothing but good things to say about TTS; I had experienced nothing but cordial, efficient, and professional service from everyone I contacted there. I should also add that I have had nothing but excellent service from Timeshare Closing Services, who is handing the closing.

Within a week, however, the original contract popped back up in TTS' inventory - now offered at a ridiculous price - and I find it very difficult to understand why any realtor would offer a contract from a seller who has already reneged on a transaction.

I'm not a realtor, I'm not a lawyer, and I don't claim to be an expert in realtor ethics...but I am very uncomfortable with the relisting of that first contract after the seller reneged. If these sellers acted in bad faith previously, what makes us think they are acting in good faith this time?