Need for escrow

I have a potential buyer, but he doesn't want to pay the escrow fees, saying he can do it cheaper by himself . . .

Am I SAFE selling this way?

tmassa7 wrote:

I have a potential buyer, but he doesn't want to pay the escrow fees, saying he can do it cheaper by himself . . .

Am I SAFE selling this way?

IMO, escrow protects mainly the buyer. Is he talking about all the other fees as well, i.e. title search, recording the deed, etc. This can be handled individually if all the proper steps are taken. You need to make sure the deed gets properly recorded and the resort gets notified of the new ownership, otherwise you could get an unexpected bill for MFs.

Check state laws, some states may require an attorney to "handle" the real estate transaction.

tmassa7 wrote:

I have a potential buyer, but he doesn't want to pay the escrow fees, saying he can do it cheaper by himself . . .

Am I SAFE selling this way?

Many buyers close their own timeshare purchases. Have you asked for a down payment or earnest money? If so, I wouldn't worry about it ..... if the sale doesn't go through and the deed is not changed into the buyer's name then the timeshare will still be yours plus the earnest money.

I, myself, always chose a reliable timeshare closing company which also includes escrow, but I never had a buyer that wanted to do the closing themselves.

On another note, as Mike stated above, some states require a licensed attorney to do closings. I sold one timeshare in SC where I had to find a local attorney to do the closing.

Absolutely not-------if you don't know the buyer, GO THRU ESCROW. There's too much fraud out there and escrow PROTECTS BOTH PARTIES---------YOU DON'T GET YOUR MONEY UNTIL HE GETS HIS DEED........THAT'S what escrow is for----researching the title to make sure the buyer isn't buying something full of encumbrances or liens------I cannot stress enough how important it is to use an escrow service..........not in today's world when people are becoming more and more creative in how to fraud someone else.

Surely an escrow service just holds the money until both parties are satisfied with the transaction? It isn't the escrow company that checks the title, unpaid fees/liens/etc. is it? That would be dealt with be the closing company which ought to be separate from the escrow (but, in many cases, isn't).

Escrow services do not hold the money until both parties are satisfied with the transaction. Generally the company merely processes the paperwork and after they record the deed they release funds to the seller. I've bought a few timeshares where I became the owner but the closing company failed to properly record a deed to properly convey ownership to me. sometimes a deceased party was not properly addressed, or a spouse, etc.

also be very careful about companies selling timeshares. Mayn times they use a closing company they own. at no time is the closing company acting to protect you, it is acting on behalf of the seller.

peterp151 wrote:

Escrow services do not hold the money until both parties are satisfied with the transaction. Generally the company merely processes the paperwork and after they record the deed they release funds to the seller.

Exactly, I used a reputable timeshare closing company to handle all my closings and this is exactly how the escrow worked.

Hawaii Escrow and Title companies do, indeed, search title............if a resort slaps a lein on an owner escrow will find it and that lien will be paid thru escrow........

Also, in addition to escrow holding the monies, escrow also orders, records and holds the deed----the seller doesn't get his money until the buyer gets his deed and all bills are paid---whether it's liens for unpaid maintenance or what.....believe it or not, for resorts who have Rights of First Refusals on sales, they will want to know what Title & Escrow service is being used...that way they can make sure that all unpaid monies due them is paid thru escrow.

Not true at all...........closing companies have a responsibility to the buyer and seller........they have to because they are the facilitator------Realtors are one sided-------not the facilitator.

CUT AND PASTED FROM OLD REPUBLIC TITLE & ESCROW

Prepares escrow instructions as directed by the parties involved Requests a preliminary report Orders a statement of identity (information) on buyer and seller Orders demands or beneficiary statements at client's request Complies with lender’s requirements specified in the escrow agreement Receives bills from termite, roof, appliance inspection and home warranty companies At the direction of the client, receives purchase funds from client Prepares or secures the deed or other documents Prorates taxes, interest, insurance and rents according to instructions Secures release of contingencies/conditions as imposed on any particular escrow Records deeds and any other documents as instructed Closes escrow when all the instructions of buyer and seller have been carried out Disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs Collects all outstanding fees (i.e. title insurance premiums, real estate commissions, inspection charges) Prepares final statements for the parties accounting for the disposition of all funds deposited in escrow

karik27 wrote:

CUT AND PASTED FROM OLD REPUBLIC TITLE & ESCROW

Prepares escrow instructions as directed by the parties involved Requests a preliminary report Orders a statement of identity (information) on buyer and seller Orders demands or beneficiary statements at client's request Complies with lender’s requirements specified in the escrow agreement Receives bills from termite, roof, appliance inspection and home warranty companies At the direction of the client, receives purchase funds from client Prepares or secures the deed or other documents Prorates taxes, interest, insurance and rents according to instructions Secures release of contingencies/conditions as imposed on any particular escrow Records deeds and any other documents as instructed Closes escrow when all the instructions of buyer and seller have been carried out Disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs Collects all outstanding fees (i.e. title insurance premiums, real estate commissions, inspection charges) Prepares final statements for the parties accounting for the disposition of all funds deposited in escrow

The above is for home closings not timeshare closings. Timeshare closings are much less complicated.

Sorry Jay, but in Hawaii, deeded properties are deeded properties-----and the when a Title & Escrow company is used to facilitate, the process is the same wether it's timeshares or not........I assist timeshare clients daily in setting them up with Title & Escrow services.........they even take care of HARPTA FIRPTA

Old Republic is a company who processes closings primarily for tradditional home and commercial property. They of course will process closings for timeshares. They use the same process for either type of sale. That does not mean timeshare closing companies do.

I think what JayJay is saying is that a lot of "timeshare closing companies" use a much simpler process than traditional home title and escrow companies, and the county as well as the property management allow that, even in Hawaii.

For example,

"Requests a preliminary report " - This is a preliminary title report and title companies pretty much always get this correct. Timeshare closing companies use an estoppel to request info from the timeshare company and numerous times they have processed a deed incorrectly because they did not verify ownership correctly.

"Receives bills from termite, roof, appliance inspection and home warranty companies " - Doesn't happen for timeshare closings

"Prorates taxes, interest, insurance and rents according to instructions " - On numerous occasions I find out the timeshare closing company allowed ownership to transfer where my first use is "next year" even though closing docs say "this year" and I paid the current year maintenance. That's a mess to get fixed. They also fail to ensure the current fees are paid before sending funds to the seller - just yesterday a DRI letter arrived stating the 2009 maint/tax are due but the closing company said 2009 was already paid for.

karik27, I agree closing companies have a responsibility to the buyer and seller. But in reality the seller owned closing company tends to represent the seller. And while errors are usually corrected, timeshare closing companies make a lot more errors than home title and escrow companies.

karik27 wrote:

Sorry Jay, but in Hawaii, deeded properties are deeded properties-----and the when a Title & Escrow company is used to facilitate, the process is the same wether it's timeshares or not........I assist timeshare clients daily in setting them up with Title & Escrow services.........they even take care of HARPTA FIRPTA

karik27, if you only use title and escrow companies to close timeshares, your point and experience is well made. But those companies cost a lot and timeshare closing companies are often used because they cost less. also, title and escrow companies tend to issue title insurance policies, an expensive document few timeshare owners ever pay for. In many cases the policy is as much as the timeshare (maybe not as often in Hawaii but possibly a Gardens at West Maui might sell for less than the cost of the policy).

peterp151I think what JayJay is saying is that a lot of "timeshare closing companies" use a much simpler process than traditional home title and escrow companies, and the county as well as the property management allow that, even in Hawaii.

That's exactly what I was saying. We have closed on several home sales and purchases and it was far more complicated than a timeshare closing, however as karik stated timeshare closings in Hawaii evidently close differently.

BTW, ALL owned timeshare weeks are deeded properties and recorded in county records.

peterp151 wrote:

karik27, if you only use title and escrow companies to close timeshares, your point and experience is well made. But those companies cost a lot and timeshare closing companies are often used because they cost less.

This is where a prospective buyer's "due diligence" comes into play. They can check with the resort to make sure there are no liens, the prospective seller is the actual owner of the week listed for sale and there are no back maintenance fees/taxes owed.

I have done due diligence many times on timeshares I've bought.

Title Policies are roughly 250.00 and for sales a Policy can be declined however the title companies will still do, and charge for, a Preliminary Title Report........

I do deeds everyday. Many of them and I can tell you that timeshare closing companies make HUGE mistakes, especially in Hawaii where different resorts record in different systems----and if it's a Land Court document and a change in marital status occurred with the current owners, then the Judiciary is involved.......I can't tell you how many calls I get where the client will say they were told that all is needed is a Quit Claim---and their resort is a Land Court deed; and a divorce was involved and remarriages.........Timeshare closing companies should leave Hawaii timeshares alone because cleaning up their mess is no fun.

My experience says that timeshare closing companies are not necessarily cheaper, at all...and without at the least a title search, who will find any other liens or encumbrances of record filed against the current owner..........????