Need for escrow

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?

I understand these days selling or renting harder but you still need to cover your bases. During these hard times possible buyers know they have the upper hand but some become ridiculous with their demands.

If this buyer refuses to use escrow service and you are not selling your resort for almost nothing then I would offer to deduct half the fee from the selling price.

If this buyer still refused I would just feel its not worth it and stop the sale to this buyer. I know this would be a hard choice but better to be safe. When a buyer's demands become strange maybe the best deal would be no deal. If this person really wants your unit and you gave him a good price then you run the show and not him or her.

This is just my opinion on what I would do!

PHILL12

karik27 wrote:

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..........????

One more time:

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.

karik27 wrote:

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..........????

I might be out of touch, but I thought Title and Escrow companies charge $500-$1000 to close a timeshare transaction, plus title insurance if you want it, and often other fees are charged as well. Timeshare closing companies usually charge $250-$500.

Title and Escrow companies are also notorious for resisting clarification on fees charged and nearly always charge more than their good faith statements. I make this last statement based on my experience with houses and condos, but the few times a Title and Escrow company was used where I was the buyer their performance was less than satisfactory and their docs were all worded to address the transfer of a home rather than timeshare. There is no need for docs addressing pest inspections and the like when you are selling a timeshare.

People pay for timeshare title searches because they don't know how to do it. There is nothing magical about having a closing company perform this work. An individual can often look title info up on county recorder websites and often can view/download a copy of the document (deed, lein, etc) now. You don't need a title company to do this, as long as you learn what to look for and know you have been thorough. When in doubt, call or go to the county office. OK, going there will not work for most people, but the website and a phone call is pretty easy.

The same goes for contacting the resort. I have the seller fill out an authorization form allowing me to call and ask questions. You can just as easily do a 3 way call between you, the seller, and the resort to ask the questions.

This all comes down to doing the work yourself or paying someone to do it. Closing companies are not magical, they merely provide a service. In my experience they make a lot of mistakes (between a third and half of my closings performed by closing companies have errors I have to fix later). So if I can convince a seller to let me do the closing, I save money and as long as I verified the ownership and possible liens properly (closing companies do not always do this properly) I'm better off doing this myself.

I might be out of touch, but I thought Title and Escrow companies charge $500-$1000 to close a timeshare transaction, plus title insurance if you want it, and often other fees are charged as well. Timeshare closing companies usually charge $250-$500

YEAH, IT CAN BE THAT MUCH OR NOT---TITLE POLICIES ARE NOT MANDATORY AND IS USUALLY BUNDLED IN THE OVERALL ESTIMATED COSTS. COSTS ARE ESTIMATED AND NEVER ABSOLUTE BECAUSE WHO KNOWS WHAT MAY POP UP IN THE SEARCH THAT WILL REQUIRE MORE WORK. TITLE POLICIES WILL GUARANTEE ANY UNDISCOVERED LIENS, ENCUMBRANCES OR TITLE PROBLEMS. A CLOSING COMPANY CAN'T DO THIS. TITLE POLICIES WILL ALSO PROTECT AGAINST FUTURE PROBLEMS DISCOVERED WITH THE DEED........FOR INSTANCE, I RECENTLY DID A TRIPLE TIMESHARE TRANSFER FOR A CLIENT---EACH UNIT WAS GOING TO SOMEONE DIFFERENT. THE CLIENT BOUGHT ALL THREE AT THE SAME TIME AND HAD PURCHASED A TITLE POLICY. WELL, I DISCOVERED THAT THE 3 DEEDS WERE COMINGLED......SO NOTHING COULD BE TRANSFERED UNTIL CORRECTION DEEDS WERE DONE AND IT WAS THE TITLE COMPANY WHO ISSUED THE POLICY WHO DID THE CORRECTION DEEDS ON THEIR OWN DOLLAR.......HAD THIS BEEN DONE BY A CLOSING COMANY, WITH NO GUARANTEES, THE CLIENT WOULD HAVE BEEN OUT OF LUCK AND WOULD HAVE HAD TO PAY TWICE FOR THE THREE TRANSFERS---ONCE FOR THE CORRECTIONS AND ONCE TO THE 3 RECEIVORS.

notorious for resisting clarification on fees charged BECAUSE WJHO KNOWS WHAT WILL BE DISCOVERED AFTER THE RESEARCH

An individual can often look title info up on county recorder websites and often can view/download a copy of the document PROVIDING THE SOURCE IS CURRENT- PLUS, COUNTY RECORD DATA BASES OFTEN MISPELL A NAME THEREFORE A SEARCH MAY NOT PULL UP A GIVEN DOCUMENT---THIS HAPPENS ALL THE TIME---I HAVE AN ONGOING RELATIONSHIP WITH OUR BUREAU; WHENEVER I FIND A MISSPELLED NAME, I SEND IN A REQUEST FOR CORRECTION---MISSPELLED NAMES CAN CAUSE MAY PROBLEMS IN SEARCHES.

The same goes for contacting the resort BUT THE RESORT WON'T HAVE "OTHER' LIENS OR ENCUMBRANCE INFORMATION THAT AREN'T RELEVENT TO THE RESORT

Closing companies are not magical, they merely provide a service. TRUE, THEY PROVIDE A SERVICE BUT NOT A GUARANTEED SERVICE AND DEFINITLY NOT THOROUGH ENOUGH WHICH IS WHY THERE ARE SO MANY ERROR ON DEEDS DONE BY CLOSING COMPANIES.....

I'm better off doing this myself. MOST PEOPLE AREN'T AS SAAVY-----BUT, STILL, CAN YOU PROVIDE GUARANTEES FOR ERRORS DISCOVERED IN THE FUTURE?

The OP said he/she had a buyer, but the buyer did not want to pay the escrow fees. So after reading all these posts on escrow and closing companies, I ask this question. If the seller gets the money, the new deed is properly recorded, and the resort is notified of the ownership transfer, then does it matter if the buyer used an escrow company? Doesn't escrow, title searches, etc protect the buyer from an unscrupulous seller or a faulty title? IF the buyer wants to accept these risks, then that’s his prerogative.

mike1536 wrote:

The OP said he/she had a buyer, but the buyer did not want to pay the escrow fees. So after reading all these posts on escrow and closing companies, I ask this question. If the seller gets the money, the new deed is properly recorded, and the resort is notified of the ownership transfer, then does it matter if the buyer used an escrow company? Doesn't escrow, title searches, etc protect the buyer from an unscrupulous seller or a faulty title? IF the buyer wants to accept these risks, then that’s his prerogative.

Escrow provides assurance for both the seller and the buyer. Escrow holds all funds until the transaction is complete after notification of transfer of ownership to the county and resort. That's why I always used a reputable "timeshare closing company" for all my timeshare transactions. Escrow and reputable timeshare closing companies offer peace of mind.

karik27 wrote:

... TITLE POLICIES WILL GUARANTEE ANY UNDISCOVERED LIENS, ENCUMBRANCES OR TITLE PROBLEMS. A CLOSING COMPANY CAN'T DO THIS...

Closing companies have always fixed title problems for me without charging an additional fee. While they have many deficiencies, so do Title and Escrow companies. IN FACT, Summit Title has so many disclaimers and indemnity docs to sign if you don't pay for title insurance I say they are worse than a closing company for service and assurances. They are also excessively slow.

The cost of Title Insurance Policies are relatively very expensive when buying a timeshare. Perhaps if you are buying a $10,000 to $80,000 timeshare and you are the type who wants all the protection you can get, title insurance is good to buy. But when buying a $1 to $4,000 timeshare and the title policy is $500 in addition to the title/escrow service of $500-$1,000, I suggest your money is better spent on other things in life.

Timeshare closing companies process timeshares as timeshares. I don't care to use them, but they do a good basic job, cost a lot less than Title and Escrow companies, and when they do something incorrectly or a task was ommitted they have always fixed oversites in regard to proper deeding, maintenance payments, etc. Paying more for a Title and Escrow company to process your timeshare like a house, subjecting you to documents which are not directly applicable, requiring you to sign waivers/indemnities which remove a lot of their responsibility if you don't pay for title insurance, is less than optimal.

While there is a risk of not receiving clean ownership, the nature of timeshares is different enough that title insurance is probably not neccessary. Your timeshare doesn't need title insurance to protect you against incorrect property lines. The HOA/resort you belong to should already have that type of protection. Title insurance will not protect you from your HOA/resort declaring bankruptcy. The two largest risks are proper transfer of ownership and liens. As I've already said, the standard closing companies not only process this well, when they make an error they fix it.

mike1536 wrote:

The OP said he/she had a buyer, but the buyer did not want to pay the escrow fees. So after reading all these posts on escrow and closing companies, I ask this question. If the seller gets the money, the new deed is properly recorded, and the resort is notified of the ownership transfer, then does it matter if the buyer used an escrow company? Doesn't escrow, title searches, etc protect the buyer from an unscrupulous seller or a faulty title? IF the buyer wants to accept these risks, then that’s his prerogative.

I agree, and as long as I was paid for my timeshare before I signed the deed and mailed it to the buyer I almost agree 100%.

For most sellers though, I wouldn't recommend signing the deed until after a 14 day period past when the certified check was deposited is over. And before depositing the check I'd call the issuing bank to verify funds.

This part is probably a bit advanced for most people, but I've done a form of this for a few sales which I was not certain about the buyer. A seller might also be best protected by having the buyer sign a contract giving seller power of attorney to transfer the ownership back without the new owner's signature (current seller with POA signs on new owner's behalf) in the event the deed is not recorded within 90 days and/or the timeshare is still in the seller's name when annual maintenance is due and the buyer fails to pay it.

Hmmmm. Are closing companies capable of discovering tax liens? I came across 2 of those this week while doing a couple of deeds for a client.

RE: reasons to get, at the least, a Preliminary Title Report (no insured policy) is to make sure that the person you're giving money to 1) owns the timeshare; and, 2) to make sure there are no liens or encumbrances of record. If you don't know didly squat about the person/people you are buying from, you could get hurt and 4K is 4K.

Many transfers are sales between family, friends and acquaintances --people knowing each other. These can also be said to be gift for gift. One helps someone out financially and the other thanks them with a timeshare gift........these can be done outside of escrow. A straight deed transfer can be done.

In Hawaii, however, much of our business is from attorneys in the states who don't want to tackle Hawaii property transfers because of our multiple recording systems. We have the Bureau of Conveyances and we have Land Court and we have both. In addition, if a marital change took place with the owners who are transferring their timeshare (or property) and the deed is a Land Court deed, then the Judiciary must get involved and the deed must also be accompanied with a Petition & Order. Our Land Court people are EXTREMELY tough!!! They will reject a deed if a '.' is missing.

I often get calls from people who are at their ends wit with trying to do their own transfer--and have had multiple rejections.

In addition, many transfers of 'divorced" parties can be tricky especially if the divorce happened years ago and one party has died.........there's a probate.

Do timeshare closing companies know everything about each state's requirements? I think not, because we're often left cleaning up messes.

So, having said that, we're all talking the same talk. A timeshare is valued only at what someone is willing to pay and the cost of the transfer process is what it is wherever you go. Either you want to pay a reputable company and sleep well or not. As busy as we are, I think alot of people choose to sleep well.

Peter, one more thing: I don't know what kind of title problems your escrow companies solve for you without added fees but I can tell you that whatever they are, they aren't difficult......like trying to hunt down a mortgage holder---who's dead----whose heirs are fighting; OR, trying to hunt down a mortgage company who folded--who gets to sign; OR trying to hunt down a developer who folded and who never delivered hundreds of deeds to parties who rightfully own the timeshare......these problems can literally take a year to clear up......and no one in their right mind will work on this for nothing.

Mike 1536,

YOU said " Doesn't escrow, title searches, etc protect the buyer from an unscrupulous seller or a faulty title? "

ABSOLUTELY.

YOU said "IF the buyer wants to accept these risks, then that’s his prerogative"

Yes, indeed, but how will the buyer feel if the 'recorded deed" he received is not valid...the seller had already sold it years before but forgot. This may seem ridiculous to you but I can tell you that MANY people, especially the elderly, FORGET what they did years ago....I come across this allthe time. Recently, a woman wanted to sell her Kona timeshares, but guess what? She and her husband, many years before, transferred title to their children. Her husband died so she said she wouldn't be using the timeshares again and she could use the money so she may as well sell them. She was surprised when I told her that the timeshares were held in the names of XXXXXXX--- of course she said "those are my children". THEN she remembered that her husband did that some years before.......

Now, if this woman had of sold these and had some nonreputable company or individual do the deeds outside of escrow, the Bureau could have recorded them......erroneously.

These things happen. People forget. You need to do your due diligence. Seniors don't usually do any due diligence. They just trust good people [like me ;-) ] to do the work for them.

In any event, about the woman above; we got her grown kids to reconvey the timeshare back to her and she is still trying to sell them. She will call me when she finds a buyer and I will walk her thru the maze.

karik27 wrote:

...Are closing companies capable of discovering tax liens? I came across 2 of those this week while doing a couple of deeds for a client... In Hawaii, however, much of our business is from attorneys in the states who don't want to tackle Hawaii property transfers because of our multiple recording systems. ...

It bothers me when people call me a shill and so I have refrained from calling you one, Karik. It has taken a while, but I think you've finally admitted you own or work for a Title and Escrow company.

Rather than hide behind the veil appearing to be a timeshare owner, please admit when you are arguing in support of the services your company provides. That way people will more likely believe you are honest. As it is, your continued insistance that only a title company is capable of doing things like identifying tax liens is not only false - but suspect as well.

I've only had Stuart Title and Fidelity First Title (not Fidelity Title) as title companies to close my timeshares. Stuart title has also closed a few loans on houses for me. So far, 100% of the Title companies which have closed timeshares have done a far poorer job than the vast majority of timeshare closing companies. They don't understand the timeshare environment, don't understand the transfer process, and as I said before they use so many waivers and indemnities I doubt the work they do has any repercusions if they did it incorrectly. I'd like to think the Title companies would stand by their work. If they do, they shouldn't use so many legal docs to protect themselves if they don't.

I'm curious though, Karik. what two timeshare resorts were the subject of the two tax liens you discovered? I've owned 10 different timeshare organizations and all tax bills have been billed from the timeshare resort/company. Only in the case of Wyndham Ocean Walk is the tax bill not integrated in some way with the maintenance bill (some show taxes separate on the same bill). In all cases a timeshare closing company verifying the tax/maint with the resort thru the use of an estoppel will know. The only other case of a tax lein is if the resort wasn't paying the taxes it collected.

karik27 wrote:

Hmmmm. Are closing companies capable of discovering tax liens? I came across 2 of those this week while doing a couple of deeds for a client.

A prospective buyer can check themselves with the county and/or the resort to see if there are any liens. Again, this is call performing due diligence.

Quote:

RE: reasons to get, at the least, a Preliminary Title Report (no insured policy) is to make sure that the person you're giving money to 1) owns the timeshare; and, 2) to make sure there are no liens or encumbrances of record.

See my paragraph above. I learned to do my own due diligence due to my timeshare education via Tug (Timeshare Users Group). It has been discussed on that board many times over the years.

Quote:

In Hawaii, however, much of our business is from attorneys in the states who don't want to tackle Hawaii property transfers because of our multiple recording systems. I often get calls from people who are at their ends wit with trying to do their own transfer--and have had multiple rejections.

This may be true in Hawaii but on the mainland people can perform their own due diligence for reassurance.

Quote:

Do timeshare closing companies know everything about each state's requirements? I think not, because we're often left cleaning up messes.

The timeshare closing company that I use has been in business many years ..... they know what they're doing and what all states require. They have a list of states that they can't do closings (ie: S. Carolina requires a licensed attorney do all timeshare closings as well as some other states and they are aware of any restrictions that may be in place).

Quote:

Either you want to pay a reputable company and sleep well or not. As busy as we are, I think alot of people choose to sleep well.

We're in agreement here, but you don't have to pay a timeshare closing company the same fees that you pay for other real estate closings since you can perform your due diligence yourself.

peterp151 wrote:

It bothers me when people call me a shill and so I have refrained from calling you one, Karik. It has taken a while, but I think you've finally admitted you own or work for a Title and Escrow company.

I don't in any way believe you're a shill and I really don't believe karik is a shill (she hasn't mentioned her company's name that I can recall), however karik works out of Hawaii and they do things differently there than on the mainland. Evidently it's far more difficult to close a timeshare in Hawaii than it is on the mainland, therefore she can only speak for Hawaii.

Peter, I am no schill and I categorically do not own OR have ever worked of a title & escrow company. I do, however, work for a Kona attorney who specializes in property transfers (timeshare or not); wills, trusts and probates and we do thousands of timeshare transfers a year.

The liens on the timeshares I recently worked on were GE TAX LIENS---that's general excise, for those unfamiliar. That means, these people failed to pay their GE taxes.... Any type of lien can be slapped onto a person's property and if a person didn't know how to read the legends in the Bureau's website, or failed to have the savvy to even figure it out, this could be a problem to a new owner who later sells the timeshare to someone requesting a title report or policy. It may even thwart the sale because that lien will have to be cleared and clearing an old lien, tracking the people involved can be an expensive feat.

Sorry to disappoint you about my cover----I'd gladly tell you exactly who I work for and the dba but I'm afraid I'd get another reprimand for trying to 'advertise'.

Peter, this is a post script:

The reason I came on to these blogs is because EVERYDAY I talk to someone who is trying to sell their timeshare but who has been frauded by nasty people out there purporting to be representing a company they are not associated with and about 3 weeks ago, my heart ached for a senior man who called desperate for help......he had given a fraudulent man about 8500.00 to sell his 4 Hawaii timeshares and never heard from him again.........I am an advocate for those who aren't savvy enough or who just don't have the resources; or, who are just so desperate and will trust anyone. And it breaks my heart.

he has to pay that

karik27 wrote:

....... about 3 weeks ago, my heart ached for a senior man who called desperate for help......he had given a fraudulent man about 8500.00 to sell his 4 Hawaii timeshares and never heard from him again.........I am an advocate for those who aren't savvy enough or who just don't have the resources; or, who are just so desperate and will trust anyone. And it breaks my heart.

My sentiments exactly ..... that's the reason I come to these forums everyday ..... to try and educate people concerning scams in the timeshare industry ..... mainly upfront fee resale scammers which I absolutely detest.

I guess my ignorance is showing, so please clear up some things for me. This thread as discussed Escrow and Closing companies as if they are one and the same. Aren't they mutually exclusive? Doesn't the Escrow company hold the money while the closing company does the title and deed work. While these two functions can be performed by the same company, could they be performed by two different companies?

Good question........I only know of Title & Escrow companies...........HAWAII ESCROW AND TITLE; OLD REPUBLIC ESCROW & TITLE; FIRST AMERICAN ESCROW AND TITLE, ETC....