Can someone please explain ROFR to a newbie :) ?

[4orm]

Thanks! I'm learning the ropes of DVC and hoping to buy sooner than later

 

[Happy Birthday Cat]

Originally posted by 4orm
Thanks! I'm learning the ropes of DVC and hoping to buy sooner than later

It is "Right of First Refusal". It is in all DVC contracts. It gives Disney the right to purchase your points, in case you ever sell your contract. They look over each contract and decide if they want to buy it back at the price (and anything else that may be in the contract) your buyer is willing to pay you for it.

HBC

 

[4orm]

How often to they exercise this? Is there any benefit to the seller either way how buys it (Disney or a buyer?)?

 

[DebbieB]

The seller gets the same deal either way. The reason they do it is to prevent resales from going too low in price. If alot of people starting selling for say $55 a point, that would drive down the market price for everyone trying to sell. By exercising ROFR, DVC discourages this by not allowing sales below a certain point to go through. DVC buys the points at the low price and then they can resell them at their current price ($84 I believe). So then buyers know that a low offer will not go through for them, it keeps the price up. It's a protection for current members.