Buying and Selling Questions

[NickBCV]

A couple of questions that I need help with since we are in the process of selling and buying points:

1) As a seller of BCV points, we signed our closing documents ten days ago but the buyers have yet to send in their final payment or sign their closing docs. The contract states we will close in 60 days after contract is executed which for the sellers was 5/26. I assume if the sellers do not sign by then they would forfeit the deposit of $2,500, although not much of that comes to us as the broker commission is paid first. But does the broker get paid twice if we have to relist the contract?

2) We are buying a small VGF contract that we were hoping to use funds from the closing above to pay for....not a big deal as we could cover the cost from other means but we were buying with the idea that we were selling 250 points above. If the contract above does not sell, we have way too many points. The VGF contract has already passed ROFR...I assume there is no getting out of this contract now without losing our deposit correct?

Thanks all.

 

[Bing Showei]

Ugh. That's frustrating.

1) The terms of our contracts state that 1/2 the deposit (less fees incurred not to exceed $150) will go to the seller other half goes to broker. Revisit your contract as this is true across all four of mine. I think the buyer is technically on the hook for the commission, but brokers never pursue this.

2) Just like the buyers on your contract, you're on the hook.

 

[starry_solo]

#1 - contract is executed, but by whom? A contract is not fully executed until it's been signed by both parties so, depending on the language, it could be 60 days from when the buyer signs it, since the seller signed first.

 

[NickBCV]

#1 - contract is executed, but by whom? A contract is not fully executed until it's been signed by both parties so, depending on the language, it could be 60 days from when the buyer signs it, since the seller signed first.

Yes we signed on the 25th and the buyer signed on the 26th and sent in a $2,500 deposit.

 

[NickBCV]

Ugh. That's frustrating.

1) The terms of our contracts state that 1/2 the deposit (less fees incurred not to exceed $150) will go to the seller other half goes to broker. Revisit your contract as this is true across all four of mine. I think the buyer is technically on the hook for the commission, but brokers never pursue this.

2) Just like the buyers on your contract, you're on the hook.

Our contract states:
If either Buyer or Seller fails to perform any duty required under this Agreement, such party is in default, Upon Buyer default, Seller may terminate this contract and Buyer shall forfeit the deposit. Escrow agent shall deduct all expenses including escrow fees, and title exam fees, and pay the remainder of deposit to Seller, which shall be Seller's sole and exclusive remedy. Buyer also agrees upon Buyer default to pay broker liquidated damages of treble the deposit, except that the Broker's portion shall not exceed the full commission and/or transaction fee.

Sounds like I might be in better shape that I thought.

 

[NickBCV]

#1 - contract is executed, but by whom? A contract is not fully executed until it's been signed by both parties so, depending on the language, it could be 60 days from when the buyer signs it, since the seller signed first.

On the initial paperwork we signed it states:
The contract shall be closed within 60 days of the effective date, unless extended by other provisions on the contract. If the Seller or Buyer does not execute this contract by 5/31/2018 or upon presentation, the deposit shall be refunded to the Buyer. The contract shall be deemed closed upon performance by Seller and Buyer of all obligations under the contract and a determination by the title agent that (1) Title is insurable (if requested) in accordance with the contract (2) The closing documents have been correctly executed and returned to the title agent.

 

[mustinjourney]

So you’re not past 60 days, right? There’s still a couple weeks left if you signed on 5/26/18.

 

[NickBCV]

So you’re not past 60 days, right? There’s still a couple weeks left if you signed on 5/26/18.

Exactly......I am trying to plan as we approach the 60 days. Usually buyers are really anxious to get their points and they have not responded with closing docs that have been in their hands for 10 days so far so I am getting a bit nervous. I suppose they could be on vacation too so not panic yet, but a little worried.

 

[kboo]

Has your broker said anything? Maybe they are trying to come up with the money, or lining up a loan or something. I had sellers who had to come up with money to close, and so they got their docs back pretty quickly but then it was several days more to close because they had to pay off their mortgage.

 

[NickBCV]

Has your broker said anything? Maybe they are trying to come up with the money, or lining up a loan or something. I had sellers who had to come up with money to close, and so they got their docs back pretty quickly but then it was several days more to close because they had to pay off their mortgage.

Broker has been unsuccessful in reaching them thus far. Could be nothing and they are away on vacation.... but odd.

 

[kboo]

Sorry. That is stressful. I hope it works out for you, NickVGF.

 

[NickBCV]

Sorry. That is stressful. I hope it works out for you, NickVGF.

Thank you kboo

 

[mustinjourney]

Thank you kboo

As you said, they could be on vacation -- so I'd give it a few more days. Also, as @kboo said, they might be waiting for a check to come in and perhaps were caught a little flatfooted that the closing happened faster than expected. Just like you're counting on selling this contract in order to pay your VGF, they could be doing the same -- and often times, people are too embarrassed to admit that they are currently short on funds.

 

[NickBCV]

As you said, they could be on vacation -- so I'd give it a few more days. Also, as @kboo said, they might be waiting for a check to come in and perhaps were caught a little flatfooted that the closing happened faster than expected. Just like you're counting on selling this contract in order to pay your VGF, they could be doing the same -- and often times, people are too embarrassed to admit that they are currently short on funds.

Completely agree....don't mind waiting until the date we "must close by" but I also want to be prepared to claim the deposit in case they had a change of heart.

 

[KAT4DISNEY]

Resale is best gone into with patience. And yes, it could be vacation. I recently bought a small VGF add on and of course received notice of passing ROFR just before vacation. Now I did see the notice prior but if timing were a day or two later I might not have until we returned. I let my broker know I wouldn't be returning the docs until the following week.

 

[NickBCV]

Resale is best gone into with patience. And yes, it could be vacation. I recently bought a small VGF add on and of course received notice of passing ROFR just before vacation. Now I did see the notice prior but if timing were a day or two later I might not have until we returned. I let my broker know I wouldn't be returning the docs until the following week.

Great point....In fact I just heard back from the broker after I said I would be looking to claim the deposit on the close by date, that they were able to reach the buyer and they were away for vacation and plan on sending in the papers and deposit this week.

All is well that ends well I suppose.

 

[mustinjourney]

Great point....In fact I just heard back from the broker after I said I would be looking to claim the deposit on the close by date, that they were able to reach the buyer and they were away for vacation and plan on sending in the papers and deposit this week.

All is well that ends well I suppose.

looks like you're going to have to change your screen name to NickVGF now.

 

[NickBCV]

looks like you're going to have to change your screen name to NickVGF now.

Sure does.....You are not the only one to suggest that to me

 

[Deb & Bill]

I had buyers back out twice after ROFR was passed. I got half their deposit each time. The other half went to the real estate broker. If the seller backs out, they still owe the real estate broker the commission on the sale.

 

[Bing Showei]

I had buyers back out twice after ROFR was passed. I got half their deposit each time. The other half went to the real estate broker. If the seller backs out, they still owe the real estate broker the commission on the sale.

Unfortunately, because it’s cost prohibitive, brokers will not pursue sellers for their commission on a breached contract. This, of course, creates a terribly uneven playing field that favors sellers heavily.

Sellers can list their contracts even though they can’t close for 8 months. Should the market go down, they have a contract in place; should the market go up, they can just back out and sell with another broker (or the same broker - not convinced that a broker would turn down the opportunity to pursue that commission on a second sale). All the meanwhile, a buyer’s deposit is held while they watch the resale market pass them by.

No thanks, Mr. I-Have-a-Rental-in-8-Months-but-You-Should-Pay-Market-Value-Today-And-If-You-Negotiate-a-Fair-Price-That-Reflects-That-Added-Assumed-Risk-I’ll-Just-Be-More-Tempted-To-Back-Out-In-8-Months.

Hate that guy.