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Ebay sellers and title companies same: Is it legal?

sjuhawk_jd

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I am sure this has been discussed before.

In my state, the seller of the real estate can not dictate the closing/title company that will handle the closing (I have the choice). However, most of the large ebay sellers (of timeshares) have their own inhouse closing companies and you are required to use them. If you have problems with the closing company, the sellers are known to ban you from bidding on their auctions.

Are these practices legal?
 

BocaBum99

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It is illegal for a broker/agent (at least in my state of Florida, but probably for many if not most states) to direct business to a title company. However, the seller of a timeshare can negotiate as a deal point that they want to use a specific title company. If the buyer refuses, it's simply a rejection of an offer/counteroffer. That is legal.

In my state, there is also an affiliated business relationship disclosure requirement if either party or the broker of a transaction has a financial relationship with the title company.
 

Carolinian

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This is an issue I would raise with both the Real Estate Commission of the state where the timeshare is located and with a copy to eBay.

Our Real Estate Commission in North Carolina takes a firm position that anyone selling a timeshare in North Carolina other than a bonafide owner/user must be licensed in North Carolina no matter where the seller is located, and they have gone after some out of state timeshare resellers hammer and tongs. I suspect that if anyone ever stirs this issue, they will come down on both the eBay resellers and probably eBay itself like a ton of bricks.

Then there is also the issue of these closing companies rampantly breaking state law by having deeds prepared by people not licensed in the state where the timeshare is located. In some states like North Carolina, that is a criminal offense.

In many states, a buyer should have plenty of leverage to make these eBay sellers back off on this illegal requirement.

As to a contract provision to give up your rights to choose the closer being legal, when a buyer is compelled to give up his rights as a condition of the contract, I cannot imagine any court or state agnecy upholding that provision.

Someone needs to give these Ebay sellers a comeupance.
 

e.bram

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How about companies like Legal Zoom which "show" you how to do whatever legal action but do not actually do it?
 

BocaBum99

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As to a contract provision to give up your rights to choose the closer being legal, when a buyer is compelled to give up his rights as a condition of the contract, I cannot imagine any court or state agnecy upholding that provision.

It's called freedom. We have that in this country.

If a seller of real estate offers up a timeshare for sale and as part of the negotiation process (or if it is listed in an eBay auction as a condition required of the purchase) they specify that they want to use a specific title company to close, they can do it.

The buyer has the freedom to reject that deal (or auction) based on that requirement. So, there is no basis for any court or state agency to even render an opinion on any provision.
 

Carolinian

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How about companies like Legal Zoom which "show" you how to do whatever legal action but do not actually do it?

In most states there are exceptions for providing blank forms. In days past, office supply stores used to sell fill in the blank deed forms, which was perfectly legal. Indeed, in the pre-computer days, attorneys often bought them and used them! I suspect that Legal Zoom probably uses that exception for its business.

The old saying that the person who represents themselves in a legal matter has a fool for a client is very much on point. Back when I practiced law, I had a woman come in with what she thought was a claim for marital property. Her problem was that she had done her own divorce to save $300 on legal fees and did not know that by failing to either make the marital property claim or at least reserve it as part of that divorce, she forfeited it under North Carolina law. So, to save $300, she forfeited a substantial marital property claim of many times that amount. I also had a couple of clients on the other side of that equation, who were served with do-it-yourself divorces and by sitting back and letting the other spouse go forward uncontested allowed the other spouse to forfeit substantial marital property claims.
 

Carolinian

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It's called freedom. We have that in this country.

If a seller of real estate offers up a timeshare for sale and as part of the negotiation process (or if it is listed in an eBay auction as a condition required of the purchase) they specify that they want to use a specific title company to close, they can do it.

The buyer has the freedom to reject that deal (or auction) based on that requirement. So, there is no basis for any court or state agency to even render an opinion on any provision.

The right to contract is not absolute, and if a contractual provision violates the law, it can be voided. Of course in any given situation with the right to choose the closer, there are lots of aspects that may vary from state to state as to the origin of this right. Thus there might be some states and circumstances where one could contract it away.

That is why in dealing with any of these overbearing eBay sellers who try to force a buyer to use a particular closing company, it is best to contact the state Real Estate Commission in the state where the timeshare is located to see if they indeed can legally do that. It is also good to contact the State Bar in the state where the timeshare is located to see if they can use a person not duly licensed in that state to prepare the deed.

If I ever see a timeshare I want to buy in North Carolina offered by one of these eBay sellers, they will get their comeupance if they try to strongarm me with any of this crap.
 

BocaBum99

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The right to contract is not absolute, and if a contractual provision violates the law, it can be voided. Of course in any given situation with the right to choose the closer, there are lots of aspects that may vary from state to state as to the origin of this right. Thus there might be some states and circumstances where one could contract it away.

What? That's nonsense. Two parties can of their own choosing agree to use a specific title company for closing and then write that agreement into a contract. I claim that there is NO law in ANY state that prohibits such agreement. And, I haven't even researched it. It just makes no sense for any state to regulate such choices.

Rather than putting forth hypothetical scenarios that have NO chance of occurring in the real world, why don't you demonstrate one case in any state that proves your point. Then, I'll agree with you. Until then, I'll keep stating that sellers can stipulate closing/title company required for closing as a mandatory condition of purchase simply by making it a negotiating point.

You want to use a different title company? Then, buy it from someone else.
 

Carolinian

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That's nonsense. An eBay seller requiring a buyer to use a closing company which they either own or are getting kickbacks from is not, by any stretch of the imagination ''two parties ... of their own choosing agree[ing] to use a specific title company''

Boca, I know you are in the resale business. Do YOU require your buyers to use a specific closer????????


What? That's nonsense. Two parties can of their own choosing agree to use a specific title company for closing and then write that agreement into a contract. I claim that there is NO law in ANY state that prohibits such agreement. And, I haven't even researched it. It just makes no sense for any state to regulate such choices.

Rather than putting forth hypothetical scenarios that have NO chance of occurring in the real world, why don't you demonstrate one case in any state that proves your point. Then, I'll agree with you. Until then, I'll keep stating that sellers can stipulate closing/title company required for closing as a mandatory condition of purchase simply by making it a negotiating point.

You want to use a different title company? Then, buy it from someone else.
 

RLG

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In my state, the seller of the real estate can not dictate the closing/title company that will handle the closing (I have the choice).

Do you have a reference for this law?

It certainly sounds odd to me that a seller is required to accept whatever closing/title company the buyer proposes.
 

BocaBum99

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That's nonsense. An eBay seller requiring a buyer to use a closing company which they either own or are getting kickbacks from is not, by any stretch of the imagination ''two parties ... of their own choosing agree[ing] to use a specific title company''

why don't you read my post again and respond to my specific assertion. I never mention anything about eBay or third parties supporting a buyer and a seller. I clearly make a general statement about 2 parties who can agree to using a specific title or closing company and write it into an agreement. I claim they can.

DO YOU DISPUTE THIS SPECIFIC CLAIM?

Here is the quote for your review
What? That's nonsense. Two parties can of their own choosing agree to use a specific title company for closing and then write that agreement into a contract. I claim that there is NO law in ANY state that prohibits such agreement. And, I haven't even researched it. It just makes no sense for any state to regulate such choices.

Rather than putting forth hypothetical scenarios that have NO chance of occurring in the real world, why don't you demonstrate one case in any state that proves your point. Then, I'll agree with you. Until then, I'll keep stating that sellers can stipulate closing/title company required for closing as a mandatory condition of purchase simply by making it a negotiating point.

You want to use a different title company? Then, buy it from someone else.
 
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ricki999

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I attempted to make an ebay purchase awhile back and the seller would not negotiate the closing company. I walked away.

I believe the reason the seller wanted to use their closing company is because they were not the owner of the property and were attempting to do a double closing.

http://en.wikipedia.org/wiki/Double_closing
 
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BocaBum99

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I claim that a specific buyer and seller can contractually agree to use a specific title company for closing a real estate transaction. Therefore, that makes it a negotiating point. Either side can reject the contract if their choice is not agreed by the other side.

With respect to eBay resellers. They probably do a lot of illegal things. But, that does NOT mean that there aren't legal ways to do what they do. Since I do not know specifically how most conduct their normal business, it has to be taken on a case-by-case basis.

The potential problems I see with eBay resellers are

1) are they selling a real estate interest on behalf of a third party? If the answer is yes, then the follow on question is are they licensed real estate agents? If they aren't, they are breaking the law in most states.

2) If they are acting on behalf of a third party, then it is illegal to direct business to a specific title company. And, it is illegal to receive a kickback as well. (Well this is true in the state of Florida, I don't know if it is true elsewhere).

So, the answer to the question stated by the OP is really determined by whether or not the eBay seller is legally or illegally acting on behalf of the seller in the transaction. Many states have loopholes that allow non-licensed parties to act as agents for owners in real estate transactions. For instance, if an estate is being liquidated. But, I think these eBay resellers use the Power of Attorney provisions of such loopholes to do what they do. It would be interesting to see it challenged in court.

But, let's say that the reseller loses the case. All they need to do is become licensed. Then, the can legally act on behalf of the seller. Then, if the seller requires a specific title company, then they are just carrying out the requirements of the seller.

I believe the laws were set up in Florida as they are to minimize unscrupulous real estate brokers from directing business to title companies and receiving kickbacks. The laws are pretty relaxed when someone wants to sell their own property. I don't think the Real Estate Commissions ever envisioned the concept of the PCC. So, they didn't create laws for protecting consumers against what they do.
 
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ricki999

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In my attempted purchase, the ebay seller and the closing company were both located in Florida.

When I backed out of the deal, the seller claimed we had a binding deal and threatened negative feedback as the ad clearly stated that a specific closing company was required. In the end, I walked away from the non binding bid and never received negative feedback. Wonder if this was because the seller knew they were in violation of Florida law?
 

pathways25

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In my attempted purchase, the ebay seller and the closing company were both located in Florida.

When I backed out of the deal, the seller claimed we had a binding deal and threatened negative feedback as the ad clearly stated that a specific closing company was required. In the end, I walked away from the non binding bid and never received negative feedback. Wonder if this was because the seller knew they were in violation of Florida law?

You didn't receive negative feedback because sellers on eBay can no longer leave negative feedback. They can only leave positive feedback or no feedback at all. This change was made to prevent sellers from holding buyers hostage with the threat of negative feedback. A seller's only other recourse is to file an unpaid item case with eBay to get their fees back. Normally a buyer would take a hit for this, but eBay considers bids on cars and real estate to be "non-binding" which means the buyer suffers no consequences for failing to follow through on their bid. All of the bluster at the bottom those timeshare listings about strikes and negative feedback are just empty threats. A timeshare seller can't really do anything to a bidder.

Having said all that, I personally think it's bad form to bid, then back out unless there was a material error in the timeshare listing or description...
 
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nazclk

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Title Company

In California the seller dictates the Title/Escrow Company, which of course can be negotiated. If the seller refuses to use the buyers company, and the buyer refuses to use the sellers company, like the TV show NO DEAL
 

ricki999

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You didn't receive negative feedback because sellers on eBay can no longer leave negative feedback. They can only leave positive feedback or no feedback at all. This change was made to prevent sellers from holding buyers hostage with the threat of negative feedback. A seller's only other recourse is to file an unpaid item case with eBay to get their fees back. Normally a buyer would take a hit for this, but eBay considers bids on cars and real estate to be "non-binding" which means the buyer suffers no consequences for failing to follow through on their bid. All of the bluster at the bottom those timeshare listings about strikes and negative feedback are just empty threats. A timeshare seller can't really do anything to a bidder.

Having said all that, I personally think it's bad form to bid, then back out unless there was a material error in the timeshare listing or description...

Thanks for the info. Would you back out it if the seller were violating law? Personally I'm more concerned with the details of a real estate contract than an ebay bid. I think about form during tennis and golf.
 
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Carolinian

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Boca, one really does have to take the entire thread in context to get the full meaning of a post.
 

pathways25

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Thanks for the info. Would you back out it if the seller were violating law? Personally I'm more concerned with the details of a real estate contract than an ebay bid. I think about form during tennis and golf.

Do you mean violating the law by requiring their in-house closing company? Based on the other posts in this thread, it appears that this practice is not always illegal though I don't know what the law actually says on this issue. In any case, the eBay listings almost always state that the use of their in-house closing company is required and non-negotiable and if you don't like it, don't bid. That seems like fair warning to me...
 

Carolinian

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Do you mean violating the law by requiring their in-house closing company? Based on the other posts in this thread, it appears that this practice is not always illegal though I don't know what the law actually says on this issue. In any case, the eBay listings almost always state that the use of their in-house closing company is required and non-negotiable and if you don't like it, don't bid. That seems like fair warning to me...

In many states, these practices are illegal, and these PCC outlets need to be forced out of their illegal practices by bringing the appropriate agencies down upon their heads. State laws do vary and there may be some places where they can get away with this practice. These companies tend to take a ''one size fits all'' approach based on the laxest standard and that is simply not going to fly a lot of places if they get called on it. I for one would like to clean up these slimmy practices, especially since many of the closing companies they use are incompetent to begin with.
 
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