Percent of Resales Passing ROFR -- UPDATED 4/09/2013

Discussion in 'Purchasing DVC' started by wdrl, Mar 27, 2013.

  1. wdrl

    wdrl DIS Veteran

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    Out of curiosity, I looked at the Orange County Comptroller's website to see how times Disney Vacation Development waives its Right of First Refusal on resale transactions. Given the number of resale transactions, I limited my search to records recorded by OCC during January and February 2013.

    Whenever a DVC deed changes ownership, DVD issues a Notice of Waiver of Right of First Refusal. If it is gratuitous change of ownership in which no financial consideration is involved, such as when a deed is given to another family member, DVD issues a Notice of Waiver that explicitly states it is a gratuitous transfer. If an owner wishes to sell his or her deed, then the Notice of Waiver indicates it is being sold and includes language about the exchange limitations placed on the future use of the deed.

    In January and February 2013, 621 Notices of Waiver were filed and recorded by OCC. Of these, 228 were Gratuitous Waivers and 393 involved deeds being sold.

    For the 393 deeds that were being sold, DVD could have exercised its Right of First Refusal and stepped in and purchased the deed from the owner. However, it declined to do so. Instead, data I track in another thread shows that DVD exercised ROFR on only 27 deeds during January and February 2013.

    The following chart shows the number of Notices of Waiver by DVC resort for January and February 2013. The column "% Passing ROFR" is based on "ROFRed Deeds" divided by "Waiver of ROFR."

    EDITED: While going through records filed by DVD with Orange County Comptroller, I discovered some Notices of Waiver are recorded on the OCC website as "Affidavits." There were five affidavits recorded in January and February 2013 (two for BLT and one each for BCV, SSR, and VWL). I have revised the chart below to reflect these additional deeds.

    [​IMG]



    While collecting this data, I did not attempt to count the number of points contained in each deed, nor the Use Year of each deed. Although this information can be extrapolated from information on the Notice of Waiver, it is a very tedious process for such a large population.

    OCC no longer displays the Sale Consideration Amount on deeds. Thus, it is impossible for me to determine the prices on the deeds that DVD does or does not ROFR.

    There are several precautions I should list about interpreting this data. One, this is just a one-time snapshot of the data. The time period I picked might not be typical compared to other time periods. And two, there is a delay between when DVD issues a Notice of Waiver and when the Notice is recorded with OCC. Notices are not filed until a resale transaction has closed, which can sometimes be several weeks or months after DVD issued the Notice of Waiver.

    Edited: Revised spreadsheet to correctly compute percentages, as pointed out by Rob S.
     
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  3. bobbiwoz

    bobbiwoz I'm happy to dance with you!

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    Thank you again for your information! I do enjoy reading your similar posts.

    Bobbi:)
     
  4. Rob S.

    Rob S. DIS Veteran

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    wdrl - I absolutely appreciate and admire all that you do (and post) both here and at dvcnews.com. But, after reading the above sentenace I paused a minute to think about it (I am a stat geek myself). You are saying that 27 of 393 deeds in your sample were ROFR'ed. I'm thinking that it should read 27 of 420 (393 plus 27) were ROFR'ed if I understand it correctly. My interpretation is that of the 420 possible "sales", DVD exercised ROFR on 27 and waived ROFR on 393. This would change your percentages slightly.

    Again, I am greatful for all that you post and I certainly not trying to be picky (no flames please). I'm just trying to understand the data better.

    The one thing that stands out to me is the number of BLT contracts that have passed ROFR. They (DVD) are still selling BLT at a premium ($150+) so I am a little surprised that DVD would not be buying up points at $90, even if they have to sit on them for a few months before they can sell them.
     
  5. wdrl

    wdrl DIS Veteran

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    You're right. I'll modify the spreadsheet and post a corrected copy soon.
     
  6. awilliams4

    awilliams4 DIS Veteran

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    Look forward to seeing what the March numbers look like.
     
  7. dbs1228

    dbs1228 DIS Veteran

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    Me too since March had quite a few more ROFR'd! When I got the call about mine being taken on Monday the agent said there were 3 in the office for BWV that were taken on Monday but other then mine no one else posted on the DIS boards.
     
  8. psac

    psac DIS Veteran

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    Yeah, from the other threads, March seemed like a huge uptick. It would be interesting to see if the sample posts here are NOT an indication of percentage, e.g., people here are more informed, offer lower prices, and therefore got on the bad side of ROFR more often!

    We just passed last week, though, as others have lately. It seemed like the last week in Feb and the first two weeks of March were especially brutal.
     
  9. wdrl

    wdrl DIS Veteran

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    Until August 2011, the OCC website displayed sale consideration amounts on ROFRed deeds. In July 2011, DVD reacquired two BCV deeds for a weighted average price of $81.02/point (see here). At that time, the direct price of BCV was only $115, so DVD had a margin of only $33.98. If it made financial sense for DVD to ROFR a deed with a margin of $33.98, a reasonable person would think a margin of $60 or $75 would be very enticing for DVD. I keep waiting for more BLT deeds to be ROFRed, especially since DVD has so few BLT points in its inventory that it can sell to the general public (see here).


    This might have been a one time peek at the data. Of course, by next month I might again be curious about the data.
     
  10. kkolbusz1

    kkolbusz1 Mouseketeer

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    I just posted something about this the other day, wondering about the % that they pass. Great info, thanks! Gives me some hope!
     
  11. ELMC

    ELMC DIS Veteran

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    wdrl, thank you for taking the time to do this. I especially appreciate the information in the following quote:

    Obviously we would all be interested to see what these numbers look like for the past 30 days, as there has seemingly been unusually high levels of ROFR activity. I also appreciate the point you make about the lag time between exercising ROFR and recording that information. For that reason, I think there is going to be some bleed between the two time periods which might make the contrast seem less stark than it actually might be. The general consensus is that ROFR activity is up, but I would love to see the numbers to support this hypothesis. I can't wait for your next update to this thread. :)

    Again, the troubling aspect of all of this is that we have no real information as to why DVD decides to exercise ROFR. We have seen some inferences made based on available data, some good and some not so good. But this is one of those cases where I would love to have the inside knowledge. Perhaps I should work on my smile and go apply for a job at DVD...
     
  12. beefnot

    beefnot Earning My Ears

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    So unless March figures looked very different, which is entirely possible, then either (a) the increase in ROFR activity could be more perception rather than fact or (b) there was an increase in ROFR activity, but only because there was a run on resales, so as a % of transactions it could be in line with history.

    Either way, with the increased retail pricing, does it suggest that any uptick in resale pricing will "stick" for awhile, or once this frenzy dies down, resale pricing will soften back to prior levels?
     
  13. PCMama

    PCMama Mouseketeer

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    Hey beefnot good to see you here on this board.. sorry for being a stalker from the other board lol..

    I'm interested to see the data too for march. Keep reading in here and check other Dvc boards. All kinds of theories for why the uptick in pricing. Disney's profit margin with rofr and the higher prices, the recent Disney marketing frenzy that resulted in a rush of waitlisting for various resorts.. and lack of distressed properties that Disney has to get rid of with the improved economy.

    Im pearl city from the other board btw.
     
  14. beefnot

    beefnot Earning My Ears

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    Ah, good to see you too. I got it bad to pick up a contract. Good thing this buzz is happening, plus other financial priorities, otherwise I'd do something foolish like buy into DVC sooner than I really should...
     
  15. PCMama

    PCMama Mouseketeer

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    Nothing foolish about buying something that will make your kids smile :)
     
  16. wdrl

    wdrl DIS Veteran

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    Whenever a DVC deed changes ownership, DVD issues a Notice of Waiver of Right of First Refusal. If it is gratuitous change of ownership in which no financial consideration is involved, such as when a deed is given to another family member, DVD issues a Notice of Waiver that explicitly states it is a gratuitous transfer. If an owner wishes to sell his or her deed, then the Notice of Waiver indicates it is being sold and includes language about the exchange limitations placed on the future use of the deed.

    In March 2013, 352 Notices of Waiver were filed and recorded by OCC. Of these, 88 were Gratuitous Waivers and 264 involved deeds being sold. Also in March, DVD exercised ROFR on 28 deeds that were being sold.

    The following chart shows the number of Notices of Waiver by DVC resort for March 2013. The column "% Passing ROFR" is based on "ROFRed Deeds" divided by "Waiver of ROFR."

    [​IMG]

    The data shows that a significant number of resale transactions are not ROFRed by DVD. However, since the OCC website does not display the sale consideration amount for deeds, it is not possible to determine the prices paid for deeds that are ROFRed.

    There have been numerous reports that DVD has recently exercised ROFR on BWV deeds. None, however, have appeared on the OCC website in the last few months. There is a delay between when DVD issues a Notice of Waiver and when the Notice is recorded with OCC. Notices are not filed until a resale transaction has closed, which can sometimes be several weeks or months after DVD issued the Notice of Waiver.
     
  17. Minnies Dad

    Minnies Dad Earning My Ears

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    Thanks, great data.
     
  18. dbs1228

    dbs1228 DIS Veteran

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    So this data is really from sales that happened before March correct? I know from talking to 2 resale brokers that MOST BWV contracts were refused in the month of March - I am guessing there is a month or 2 delay?

    Thanks for the information it is interesting!
     
  19. wdrl

    wdrl DIS Veteran

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    When compiling the data, I did not track the day that DVD issued the Notice of Waiver. In most cases, the Notices of Waiver that were recorded by OCC in March 2013 were issued by DVD in February and early March, including the Waivers for BWV.
     
  20. mom_rules

    mom_rules <font color=FF66FF>LOVES the Yachtsmen!<br><font c

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    Great information! Thanks
     
  21. Richmond566

    Richmond566 Earning My Ears

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    I have a question. I just signed a contract at OKW for 270 points, December use year, expiration of 2042. I signed at $50 per point. Do you think Disney will exercise ROFR or let me purchase?
     

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