Understanding DVC closing costs??

[DaisyDVC]

Hi! I'm interested in a small contract so my question is...why are closing costs higher at certain(GMAC) companies than others? Anyone have this experience?
Thanks in advance!

 

[Crystal_27]

I take it that you are buying resale? Just as a word of advice, you can and should (particularly given these economic times) try and negotiate with the seller about paying most or all of your closing costs. As to your question, I believe that some lenders charge a higher document preparation fee which leads to higher closing costs. However, given that GMAC probably has a much better interest rate than Disney's 10.75% "preferred" rate, you would probably come up much better by paying a couple hundred dollars more in closing costs to receive a better rate. Hope that helps!

 

[DisneyWalker44]

Hi! I'm interested in a small contract so my question is...why are closing costs higher at certain(GMAC) companies than others?

Because they can. GMAC has a deal where Disney throws them business. They are counting on people not bother to shop around.

 

[DaisyDVC]

We are purchasing a small contract so no financing needed. But when I got quotes on different contracts from 2 realtors the closing costs differ by about $300.00 and I thought that was a little odd.

 

[DaisyDVC]

I forgot to add both contracts are for the same amount of points. Thats why I am questioning the huge differnce in price.

 

[Crystal_27]

We are purchasing a small contract so no financing needed. But when I got quotes on different contracts from 2 realtors the closing costs differ by about $300.00 and I thought that was a little odd.

Have you seen the HUD-1?? If so, that will tell you exactly what you are being charged. You're right, though - - that is a fairly large discrepancy.

 

[DaisyDVC]

What is the HUD-1? We just started looking and wanted to know what all the costs would be up front(at least a round about figure) this is where we saw such a difference in price. We have not made an offer yet.

 

[Crystal_27]

What is the HUD-1? We just started looking and wanted to know what all the costs would be up front(at least a round about figure) this is where we saw such a difference in price. We have not made an offer yet.

I'm sorry - - it's the settlement statement. Basically, it's a sheet of paper that sets forth all of the costs assessed against both the buyer and seller...a full financial disclosure if you will. It's actually great that you haven't yet made an offer - - at least now you'll come armed with the knowledge that you can negotiate closing costs. If I was buying resale, I would *not* pay closing costs...or the full asking price, honestly. However, I also know that with the smaller contracts there is less negotating room. Still, it can be done. Good luck!!

 

[Sandisw]

When I was looking into resale, I found the same thing and ended up going with the boards sponsor, TSS, to handle the deal (and they are also handling the sale of that same resale).

I found their closing costs to be reasonable. As others have said, as the buyer, you can take that into consideration when making your offer. I paid the closing costs when I bought, but I did negotiate to pay a few dollars less per point than the asking price. It helped to offset the costs a little bit. The agent I dealt with was very helpful in giving me advice about the offer.

Most important, look at the contract and consider all the costs and the level at which it has a good chance of passing ROFR, and go from there. If you feel it is a fair deal and it is what you want, go for it!!! If not, go on to the next one as there are a lot of great deals out there right now.

Good luck!!!

 

[disneynutz]

Brokers can charge what they want. GMAC charges more because they are a business partner with Disney and they pay Disney a fee on each sale.

I have some additional info that I can PM you but PM's don't work until you have 10 posts.

 

[DaisyDVC]

This is all starting to make sense. GMAC also seems to have more smaller contracts. The other item is the yearly dues, I was told are expected to be paid by me since the seller has not used 09's points. This is really like buying a house!

 

[disneynutz]

This is all starting to make sense. GMAC also seems to have more smaller contracts. The other item is the yearly dues, I was told are expected to be paid by me since the seller has not used 09's points. This is really like buying a house!

This is like buying a house. It's a deeded piece of property in Florida that has a escrow, title insurance, homeowners dues, and property taxes.

 

[Crystal_27]

The other item is the yearly dues, I was told are expected to be paid by me since the seller has not used 09's points.

That's another thing that you should try and negotiate. I would offer to at least split that with them (if you're really considering making an offer to purchase).

 

[Sandisw]

Typically, a buyer will pick up the MF's for the current year if they are getting all the points (although they wouldn't for banked points).

However, I would not offer to cover the fees (or I would make an adjustment in my price per point) if you are not getting all the points. I picked up the MF's for 2009 on the contract I am selling because I used a lot of the points--the buyer is still getting some but not enough that I wanted to worry about it.

Everything is negotiable with an offer. The biggest thing to consider is whether or not your agreement with the seller will make it through ROFR. No matter how great a deal it is, if it gets bought back by Disney, its no deal at all.

 

[5forDiz]

This is all starting to make sense. GMAC also seems to have more smaller contracts. The other item is the yearly dues, I was told are expected to be paid by me since the seller has not used 09's points. This is really like buying a house!

The MFs (maintenance fees aka yearly dues) are based on calendar year; they are payable in January each year in one lump sum or they can be deducted monthly from bank account.

So you will want to compare the actual calendar year to UY to determine when, in fact, points in the contract are available for your use.

ie, if contract has June UY and contains all June 2009 UY points then seller will probably expect you to pay 6 mos MFs (if closing, etc. takes place during June); if you are looking at a contract with a December UY that does not have points coming until December 2010 UY (12/1/10) I'd request the seller to cover the MFs from January 2009 through November 2009 because the earliest you'd be able to utilize borrowed points from 2010 UY would be on December 1 2009. A buyer usually is expected to cover MFs beginning with the month that the points are actually available to them to use whether that be because of points readily available in the current UY or because upcoming UY points may be borrowed in for use.

 

[DaisyDVC]

Thanks all! When I contacted the company selling they all said the buyer is responsible for MF and closing costs which I thought should be negotiable. Especially since one of the contracts has no points available until 2010.

 

[DisneyWalker44]

A buyer usually is expected to cover MFs beginning with the month that the points are actually available to them to use whether that be because of points readily available in the current UY or because upcoming UY points may be borrowed in for use.

Contracts are usually structured with the buyer paying full MF for a calendar year if they get the full use-year of points, regardless of what month they buy the contract or in what month those points become available. At least that's the way TSS usually structures the deal.

Of course, that's not set in stone and the buyer can always offer something less.

 

[5forDiz]

Contracts are usually structured with the buyer paying full MF for a calendar year if they get the full use-year of points, regardless of what month they buy the contract or in what month those points become available. At least that's the way TSS usually structures the deal.

Of course, that's not set in stone and the buyer can always offer something less.

You may have been told this by TSS, guess it depends on who you were working with, we were not & we've purchased through them too. My post is a suggestion to OP on a bit of a strategy if it's halfway or more through calendar year &/or contract is stripped instead of just asking seller to split a year's MFs.

 

[Oswald the Rabbit]

Hi! I'm interested in a small contract so my question is...why are closing costs higher at certain(GMAC) companies than others? Anyone have this experience?
Thanks in advance!

As someone stated before look at your HUD1(or HUD2-2 page HUD1) aka the settlement statement. This is a Federal document that is the same for every realestate transaction and does not differ by state.

Most of the line items should be set. Purchase price, transfer & recordation tax, Document Stamps and Title insurance. These items will be the same for any Title Company if they were to do your settlement. Where charges vary by Title company are the settlement or closing fee and any othe misc. fees that a Title company is legally allowed to charge but does not have to. These fees can be the title abstract(Title companies sometimes markup what they pay for their abstract, a good way to tell is if the abstract is payable on the HUD1 to the abstractor or the Title Company, if it is the Title company then there is a markup), Notary fee(bad sign), Mail or overnight charge(should be reasonable), copying fee(again reasonable if any) and finally the settlement fee. This along with the Title Insurance is where most Title companies produce a good portion of their income. The Settlement fee should be no more than $200 to $250 for a non complicated DVC purchase. It can cost more for the settlement and abstract if there are Title issues like bankruptcy, liens ect.

The Title companies I have dealt with usually charge $300 to $325 for small DVC purchase, $425 up to $9K, 450 up to 10.5k ect and increase with added tax.

Finally most people do not know this but the buyer is allowed to choose his Title company, not the realtor or the seller. If you feel settlement is too high tell GMAC or whoever your realtor is that you want to shop title companies. This may get them to lower their fees pretty quick.

Good luck
Oswald

 

[DaisyDVC]

Thanks Oswald, if it comes to the point that we may need to pay closing costs
I will try that. At this point we figure what can it hurt to as the seller to pay closing costs and MF(no current points avail).