Not ROFR thread - general discussion

[LittleBitGoofy]

Is it though? They aren’t preventing a buyer from choosing their own title company, just have a contract that doesn’t include that language.

Is it a scare tactic?

Use our in-house, non-disclosed-affiliated title company and you'll be protected. Use someone else, and gee who knows what could happen.

I was literally told if I changed from their in-house company that I wouldn't get that guarantee/protection. What's a guarantee if not a promise of security in a process? Taking it away suggests the opposite.

 

[VGCgroupie]

So I have a somewhat unique perspective on this, since I just went through a very stressful purchase. I was using a not widely used broker and their contract did not have the point guarantee in the contract so I was very paranoid about the purchase, I posted about it here. https://www.disboards.com/threads/h...ller-transferring-points-during-sale.3957181/

I can say that not every title company is created equal and I can 100% understand why they would not guarantee points and be willing to pay you for them when using a title company they don't recommend. Prior to this recent purchase I would have said the opposite and also been mad about that "tactic". The title company can be completely incompetent (and some shockingly are) they can make errors that the broker would then be financially liable for. I do think they should have more than one recommended company though.

 

[AstroBlasters]

Is it though? They aren’t preventing a buyer from choosing their own title company, just have a contract that doesn’t include that language.

My guess is the bulk of the buyers out there are fine using them and knowing the broker will make it right without waiting for the seller to make it right is a nice guarantee.

It may not be a business model that some prefer, and that is why if it matters, it’s good there are other brokers!

I had a situation a while back where the amount of points on the account was different than what on the listing and the contract.

The broker called me, explained that the seller got something mixed up, and let me know that the contract had a clause which states the seller will credit the buyer at the rate of $25pp for any discrepancy.

I was getting the contract at such a good price and it was only a small discrepancy… so I thanked the broker for letting me know and said I would be perfectly fine having the difference credited to my final cash to close amount.

So, for a broker to say that if you use our in house title agent that you get a point guarantee….. BUT if you use another title company then we will remove language that protects you and not replace it with some other form of remediation….. it does start to feel like a scare tactic…..

 

[SheSingsAlong]

So I have a somewhat unique perspective on this, since I just went through a very stressful purchase. I was using a not widely used broker and their contract did not have the point guarantee in the contract so I was very paranoid about the purchase, I posted about it here. https://www.disboards.com/threads/h...ller-transferring-points-during-sale.3957181/

I can say that not every title company is created equal and I can 100% understand why they would not guarantee points and be willing to pay you for them when using a title company they don't recommend. Prior to this recent purchase I would have said the opposite and also been mad about that "tactic". The title company can be completely incompetent (and some shockingly are) they can make errors that the broker would then be financially liable for. I do think they should have more than one recommended company though.

Sure, but I'm not asking for the Broker to be on the hook for any issues, just the seller. So really, what I think they should say is if you don't go with their title company you get no point guarantee whatsoever, not "you don't get our exclusive point guarantee" because there is a difference. They can run their business how they like, but there was no way for me to know any of this prior to raising the issue. Now that I am better informed, I can make adjustments to my contract searches in the future.

 

[VGCgroupie]

Sure, but I'm not asking for the Broker to be on the hook for any issues, just the seller. So really, what I think they should say is if you don't go with their title company you get no point guarantee whatsoever, not "you don't get our exclusive point guarantee" because there is a difference. They can run their business how they like, but there was no way for me to know any of this prior to raising the issue. Now that I am better informed, I can make adjustments to my contract searches in the future.

Well the thing with that is.. how would you get the money from the seller? Small claims court? Huge hassle imo. My contract had a blurb that seller was responsible for any missing points but not the broker guarantee and I was still very scared they would us use points and the new transfer rules make even more so that they can transfer out points and you are SOL.

 

[AstroBlasters]

Well the thing with that is.. how would you get the money from the seller? Small claims court? Huge hassle imo. My contract had a blurb that seller was responsible for any missing points but not the broker guarantee and I was still very scared they would us use points and the new transfer rules make even more so that they can transfer out points and you are SOL.

I have a contract that “closed” on 1/23 where I am the seller, I long ago received the money, and the points are still on my Dashboard….

Tomorrow will be the 6 week mark…. after closing…. I’m secretly hoping that Disney screwed up and loaded points from their own stock to the buyer, HA!

 

[VGCgroupie]

I have a contract that “closed” on 1/23 where I am the seller, I long ago received the money, and the points are still on my Dashboard….

Tomorrow will be the 6 week mark…. after closing…. I’m secretly hoping that Disney screwed up and loaded points from their own stock to the buyer, HA!

It's a very dangerous type of transaction. Yes most people are honest which many have pointed out to me but it's so crazy that you pay thousands of dollars and officially own the contract but the old owner only has full access to it for weeks. I really feel Disney should deactivate a membership once it passes ROFR, but I know they aren't in the game to help out resales.

 

[SheSingsAlong]

Well the thing with that is.. how would you get the money from the seller? Small claims court? Huge hassle imo. My contract had a blurb that seller was responsible for any missing points but not the broker guarantee and I was still very scared they would us use points and the new transfer rules make even more so that they can transfer out points and you are SOL.

Yep, I guess you're right, if the seller wants to be unscrupulous. I'm not saying this broker's exclusive guarantee isn't different/easier/whatever from what I'm asking for; I just want what I want. I guess it doesn't need to make sense to anyone but me.

 

[VGCgroupie]

Yep, I guess you're right, if the seller wants to be unscrupulous. I'm not saying this broker's exclusive guarantee isn't different/easier/whatever from what I'm asking for; I just want what I want. I guess it doesn't need to make sense to anyone but me.

I totally get where you are coming from I do. Like I said this most recent title co was so so bad, using wrong emails for Disney, losing documents and checks. I can now see why a broker wouldn't want to put a financial guarantee on all title companies. They should really expand and not only have 1 title co option for their guarantee though since there are many competent title companies. But, in the end if you can use TRCS I would do that since they solve the whole problem by withholding funds til you get all the points.

 

[Sandisw]

Yep, I guess you're right, if the seller wants to be unscrupulous. I'm not saying this broker's exclusive guarantee isn't different/easier/whatever from what I'm asking for; I just want what I want. I guess it doesn't need to make sense to anyone but me.

I think it makes perfect sense that you want this as part of your contract.

But, this particular broker doesn’t seem to offer it unless it also includes the guarantee which comes with the title company they require for it.

As you mentioned, you simply will find a broker who can offer you what you want or go with the one title company who does hold back funds which is pretty much as good of a guarantee as you see going to get, outside of this particular title company!

 

[Sandisw]

Is it a scare tactic?

Use our in-house, non-disclosed-affiliated title company and you'll be protected. Use someone else, and gee who knows what could happen.

I was literally told if I changed from their in-house company that I wouldn't get that guarantee/protection. What's a guarantee if not a promise of security in a process? Taking it away suggests the opposite.

See, I just don’t see it as a scare tactic. I see it as being upfront with a buyer that if you use The title company we make sure that if there is an issue, we take care of it for you

If not, then we don’t get involved. I can see why it’s an either or.

Not saying it might not sit well with some buyers but it’s their business decison. And let’s be honest, outside of the DIS members, my guess is 99% use the title company the broker they are buying from recommend.

So, IMO, it makes sense for them to have two options only and deal with whatever fall out comes with it.

 

[AstroBlasters]

Yep, I guess you're right, if the seller wants to be unscrupulous. I'm not saying this broker's exclusive guarantee isn't different/easier/whatever from what I'm asking for; I just want what I want. I guess it doesn't need to make sense to anyone but me.

You can “want what you want”, but that doesn’t mean anyone is going to give it to you.

 

[Brian Noble]

If not, then we don’t get involved. I can see why it’s an either or.

But the broker isn't involved in a post-sale contract dispute. And, if the proposed clause is included ("Seller is responsible for reimbursing missing points at $20pp"), there are missing points, and the seller doesn't pay, that's what it is: a contract dispute. That's between the buyer and the seller and, if necessary, the courts. At that point the broker has nothing to do with it, presuming they've satisfied any of their own duties. Possibly the escrow agent holds the funds until points are loaded, possibly they don't. That's a different role than the broker's role, unless for some reason the broker is also the escrow agent.

Realistically, there isn't enough money at stake. If a seller wants to screw you over a grand or two, they can and there isn't much you can do about it because it will cost as much or more to pursue a remedy as it would to be made whole. The point of the clause is not to make sure the buyer is made whole. The point is to get a clear agreement about what is being transferred.

 

[Brian Noble]

It's also worth mentioning that most people are honorable and aren't out to hoodwink anyone. So, it's probably fine if the clause is not there in most cases, and if it is there, it probably won't stop anyone hell bent on taking advantage.

 

[Sandisw]

But the broker isn't involved in a post-sale contract dispute. And, if the proposed clause is included ("Seller is responsible for reimbursing missing points at $20pp"), there are missing points, and the seller doesn't pay, that's what it is: a contract dispute. That's between the buyer and the seller and, if necessary, the courts. At that point the broker has nothing to do with it, presuming they've satisfied any of their own duties. Possibly the escrow agent holds the funds until points are loaded, possibly they don't. That's a different role than the broker's role, unless for some reason the broker is also the escrow agent.

Realistically, there isn't enough money at stake. If a seller wants to screw you over a grand or two, they can and there isn't much you can do about it because it will cost as much or more to pursue a remedy as it would to be made whole. The point of the clause is not to make sure the buyer is made whole. The point is to get a clear agreement about what is being transferred.

I get that part. But, if you have a contract that puts in a remedy for missing points which includes you covering it and one that doesn’t, to me, it keeps it clean from a business perspective.

If you know add language that has it but removes the guarantee, maybe they think it makes it messy and now they need to be involved?

I don’t know and maybe they will come back and be willing to add it.

I simply don’t see it as a scare tactic or a conflict of interest. It may not be a popular model for some but it doesn’t have to be.

I agree that it’s a clause that is meaningless with a seller who chooses to do something.

 

[VGCgroupie]

But the broker isn't involved in a post-sale contract dispute. And, if the proposed clause is included ("Seller is responsible for reimbursing missing points at $20pp"), there are missing points, and the seller doesn't pay, that's what it is: a contract dispute. That's between the buyer and the seller and, if necessary, the courts. At that point the broker has nothing to do with it, presuming they've satisfied any of their own duties. Possibly the escrow agent holds the funds until points are loaded, possibly they don't. That's a different role than the broker's role, unless for some reason the broker is also the escrow agent.

Realistically, there isn't enough money at stake. If a seller wants to screw you over a grand or two, they can and there isn't much you can do about it because it will cost as much or more to pursue a remedy as it would to be made whole. The point of the clause is not to make sure the buyer is made whole. The point is to get a clear agreement about what is being transferred.

This is the different part about this instance though, this is the broker guaranteeing points so in this respect they do get involved by ponying up the funds themselves not the seller. Thats why even though it sounds unfair and a scare tactic to some I understand it.

 

[Brian Noble]

But they are not: they struck that clause when the buyer chose not to use their in-house closing arm. So, once that clause is gone, the broker no longer has any responsibility for ensuring the points transfer---unless for some reason there is some other clause that causes them to bear that responsibility.

If I understand things correctly, there are three different versions of the "missing points" clause we are talking about:

1. Broker guarantees payment: the version when using the broker's in-house closing arm. This is an agreement involving all three parties.
2. Seller guarantees payment: the version that the PP would like. This is an agreement involving only the buyer and the seller, not the broker.
3. Silent on the issue: the version that the broker proposes to use when buyer chooses another closing agent.

 

[VGCgroupie]

But they are not: they struck that clause when the buyer chose not to use their in-house closing arm. So, once that clause is gone, the broker no longer has any responsibility for ensuring the points transfer---unless for some reason there is some other clause that causes them to bear that responsibility.

If I understand things correctly, there are three different versions of the "missing points" clause we are talking about:

1. Broker guarantees payment: the version when using the broker's in-house closing arm. This is an agreement involving all three parties.
2. Seller guarantees payment: the version that the PP would like. This is an agreement involving only the buyer and the seller, not the broker.
3. Silent on the issue: the version that the broker proposes to use when buyer chooses another closing agent.

I thought we were still just speaking on them not offering the broker clause and how some think it's a scare tactic.

but yes the 3 points above are correct

 

[Brian Noble]

Gotcha. I don't think it is a scare tactic so much as I am guessing the in-house closing company holds disbursement long enough to make sure the points load.