International Seller Experience

[accm]

We're needing more points, and I'm considering selling a 100pt contract to buy a larger one instead.

Can any international DVC owners who have sold a contract let me know how exactly the experience went. We're in Canada if that makes any difference.

 

[Ruttangel]

If you need more points then I would keep your current contract
Selling can be a pain and incur fees such as broker fees 7-9%, estoppel $150, FIRPTA agent fee $500
The 15% due back via FIRPTA is taking over a year now.

Kind of depends on your circumstances how you want to play it

 

[accm]

If you need more points then I would keep your current contract
Selling can be a pain and incur fees such as broker fees 7-9%, estoppel $150, FIRPTA agent fee $500
The 15% due back via FIRPTA is taking over a year now.

Kind of depends on your circumstances how you want to play it

The reason I'm considering it is if I decide to buy direct points, the discounts are a lot better over 200pts compared to only 100pts.

How exactly does FIRPTA work? Assuming I sell my contract for the same or less than what I bought it for, I'm assuming I get that 15% back?

 

[Ruttangel]

How exactly does FIRPTA work? Assuming I sell my contract for the same or less than what I bought it for, I'm assuming I get that 15% back?

Yes, that’s right, you would pay tax on any profit element but if same or less it would be no tax due
The title company withhold 15% of sale proceeds and then ask you to get a ITIN number from IRS (you can do this earlier in the selling process) and they prepare a withholding certificate
To get ITIN you will need to get signed copies or original documents to IRS, we got our passports signed at US Embassy in Edinburgh
The certificate from title co goes off to IRS to agree, this process is taking 12+ months, could be more if IRS have less staff now

We have had no update since selling a contract last June

You could ask a broker about this in advance, lots of videos on YouTube about it too

 

[CVG]

Yes, that’s right, you would pay tax on any profit element but if same or less it would be no tax due
The title company withhold 15% of sale proceeds and then ask you to get a ITIN number from IRS (you can do this earlier in the selling process) and they prepare a withholding certificate
To get ITIN you will need to get signed copies or original documents to IRS, we got our passports signed at US Embassy in Edinburgh
The certificate from title co goes off to IRS to agree, this process is taking 12+ months, could be more if IRS have less staff now

We have had no update since selling a contract last June

You could ask a broker about this in advance, lots of videos on YouTube about it too

I'm at the start of the same process (going thru ROFR at the moment). With the size of my contract, I think I'm going to lose over half of the 15% withheld just in the fees to recover it! I'm hoping that when I sell a subsequent contract that I'll be half-way there thru the process. In my mind, I've written off the 15% so when I finally get anything back I'll be delighted.

 

[Ruttangel]

I'm at the start of the same process (going thru ROFR at the moment). With the size of my contract, I think I'm going to lose over half of the 15% withheld just in the fees to recover it! I'm hoping that when I sell a subsequent contract that I'll be half-way there thru the process. In my mind, I've written off the 15% so when I finally get anything back I'll be delighted.

This is a good point, selling a low value contract can mean the 15% is less than if you are paying a FIRPTA agent $500 to get it back

You could, of course, do the job of the FIRPTA agent yourself if you felt confident

 

[accm]

Thank you both. That sounds like a royal pain in the .... I'll run some numbers to see if its even worth it, or if I should just get more points anyways, because let's be honest, can you ever have too many points?

 

[CVG]

can you ever have too many points?

That may not be the right question to ask people who are selling their contracts! But I was in the same place once.

 

[Chili327]

The reason I'm considering it is if I decide to buy direct points, the discounts are a lot better over 200pts compared to only 100pts.

Maybe just buy 150 direct to get the benefits, & keep your current, best of both worlds, & least hassle.

 

[farmermax13]

How long does the FIRPTA process take?

I am under contract with an international seller. Are there delays? How does it work?

 

[accm]

Maybe just buy 150 direct to get the benefits, & keep your current, best of both worlds, & least hassle.

I already have direct benefits. I want to add on direct again since I prefer the points not being restricted, and the process is so much smoother (and the extra points are a nice bonus). Our last resale purchase was such a hassle and took forever, so I'm not sure I want to go through it again.

 

[Chili327]

I already have direct benefits. I want to add on direct again since I prefer the points not being restricted, and the process is so much smoother (and the extra points are a nice bonus). Our last resale purchase was such a hassle and took forever, so I'm not sure I want to go through it again.

If you already have benefits, and just want more points then “add on” to your current contract. Smoothest possible and you still get to the right amount of unrestricted points.

 

[sndral]

How long does the FIRPTA process take?

I am under contract with an international seller. Are there delays? How does it work?

FIRPTA shouldn’t delay closing.
Once the closing documents are signed by both parties & the buyer sends their funds to escrow, the title company registers the new deed, notifies DVC of the change in ownership & disburses the funds in escrow to the seller, the broker, the IRS, etc.. At that point the contract is yours. What the seller does afterwards to get a refund or reduction of the w/held 15% FIRPTA is between them & the IRS & perhaps the title company if the seller opted to leave the 15% in escrow rather than sending it to the IRS.
Just verify w/ your title company that 15% is being held in escrow (pending determination by the IRS of how much tax the seller owes) or sent to the IRS to protect yourself from getting a letter from the IRS down the road claiming that you owe that tax.
W/ an international sale delays can occur because of sellers having trouble finding a notary or using slower international mail.

 

[Jimmy Geppetto]

FIRPTA shouldn’t delay closing.
Once the closing documents are signed by both parties & the buyer sends their funds to escrow, the title company registers the new deed, notifies DVC of the change in ownership & disburses the funds in escrow to the seller, the broker, the IRS, etc.. At that point the contract is yours. What the seller does afterwards to get a refund or reduction of the w/held 15% FIRPTA is between them & the IRS & perhaps the title company if the seller opted to leave the 15% in escrow rather than sending it to the IRS.
Just verify w/ your title company that 15% is being held in escrow (pending determination by the IRS of how much tax the seller owes) or sent to the IRS to protect yourself from getting a letter from the IRS down the road claiming that you owe that tax.
W/ an international sale delays can occur because of sellers having trouble finding a notary or using slower international mail.

There are documents the escrow company needs to have which in my experience are completed by the FIRPTA agent. If the FIRPTA agent is not on the ball, this can delay closing and I have had one FIRPTA agent who was a disaster.

 

[darkconz]

As an international owner, can I do some of these long lead items ahead of time in anticipation of selling in like 5-8 years down the road?

 

[JackosinDIS]

As an international owner, can I do some of these long lead items ahead of time in anticipation of selling in like 5-8 years down the road?

You can get an ITIN (tax number) in advance, but it will expire if not kept active.