DVC Buyback Question

[NHLFAN]

Hi All,
Just curious if Disney encourages owners to sell back their contracts directly to them instead of owners going through the resale market?

Reason I ask is that I placed an offer with a broker and a few days later the broker claimed Disney decided to buy it back so the owners canceled the listing. Sounded like the owners were taking a loss in doing so.

 

[KAT4DISNEY]

No, that is not something DVC does. The only instance might be if the guide really messed up in misrepresenting something but then they'd be refunding otherwise DVC does not buy back thru any process other than ROFR. Foreclosure is the other route that DVC gets contracts back. A long time ago I believe DVC might have offered the rare buy back but at a greatly reduced price. With the strong resale market there's next to no reason for owner to do that.

 

[LAX]

I wonder what really happened to OP's interested contract. I didn't realize the owner can back out after a contract has been submitted for ROFR. Besides, if the owner was willing to accept a price on the contract so that it can go to ROFR, why would he/she care whether the eventual buyer is a 3rd party or DVD?

LAX

 

[KAT4DISNEY]

I wonder what really happened to OP's interested contract. I didn't realize the owner can back out after a contract has been submitted for ROFR. Besides, if the owner was willing to accept a price on the contract so that it can go to ROFR, why would he/she care whether the eventual buyer is a 3rd party or DVD?

LAX

Yes, an owner can back out at anytime although typically they would owe the broker their full fee if they had a signed agreement with someone. My impression in this case though is that OP just made an offer, not that they had an agreement on the contract.

 

[NHLFAN]

Yes, an owner can back out at anytime although typically they would owe the broker their full fee if they had a signed agreement with someone. My impression in this case though is that OP just made an offer, not that they had an agreement on the contract.

You are correct, I had only made the offer.

More I think about it they might have been upside down on the contract and owed Disney back fees and would have had to bring cash to closing so they might have worked something out or are going the foreclosure route.

 

[disneynutz]

Disney gets contracts back through foreclosures due to owners not paying their dues or loan payments and through ROFR. They also have a working relationship with a couple of resale brokers who they refer owners to when they want to sell.

Bill

 

[Dean]

Hi All,
Just curious if Disney encourages owners to sell back their contracts directly to them instead of owners going through the resale market?

Reason I ask is that I placed an offer with a broker and a few days later the broker claimed Disney decided to buy it back so the owners canceled the listing. Sounded like the owners were taking a loss in doing so.

I only recall one report of DVD buying a resale contract directly and it was a very low amount, well below the going rate. IIRC it was BCV at about 2/3 to 3/4 the going resale rate. I wonder if they just backed out or if they had it listed with multiple companies or it could have been they took it due to being behind on fees/payments.

 

[supersnoop]

You are correct, I had only made the offer.

More I think about it they might have been upside down on the contract and owed Disney back fees and would have had to bring cash to closing so they might have worked something out or are going the foreclosure route.

When you say you "only made the offer," what do you mean? Had you signed the deal? Disney only buys contracts one way, though ROFR, which occurs when a contract for sale is signed.

Disney can take contracts back by foreclosing on outstanding loans and dues. I haven't heard of Disney taking "deed in lieu" (where you give the deed back to avoid foreclosure), but that might be possible. But they wouldn't pay anything for that.

So, in short, either they were foreclosed or They signed a contract and Disney took it back at those terms.

 

[NHLFAN]

When you say you "only made the offer," what do you mean? Had you signed the deal? Disney only buys contracts one way, though ROFR, which occurs when a contract for sale is signed.

Disney can take contracts back by foreclosing on outstanding loans and dues. I haven't heard of Disney taking "deed in lieu" (where you give the deed back to avoid foreclosure), but that might be possible. But they wouldn't pay anything for that.

So, in short, either they were foreclosed or They signed a contract and Disney took it back at those terms.

I made an offer on a contract and after two days the broker responded back "Disney made them an really low offer for their contracts, and convinced them that they would be better off giving them back to them…at a loss."

 

[sndral]

I made an offer on a contract and after two days the broker responded back "Disney made them an really low offer for their contracts, and convinced them that they would be better off giving them back to them…at a loss."

I'd be a bit cautious w/ this broker going forward, as DVC does not make offers on contracts - rather it sounds like the owners were trying to salvage a bad financial situation & your offer wasn't soon enough (or high enough) to save them from whatever proceedings DVC was bringing against them to collect the debt they owed DVC. It may be that the owners did not realize that they were too far into arrears to salvage things via a sale to a third party. In any event the broker is being less than candid w/ you about why the contract is no longer for sale, or the owners were less than candid w/ the broker when they listed. Communication & honesty is important for getting through any real estate transaction, especially w/ a DVC resale as the broker will be representing both your and the seller's interests.

 

[wdrl]

FYI - Disney does buy back deeds using a document called a "Warranty Deed in Lieu of Foreclosure." It appears these are deeds involving owners that are in the early stages of the foreclosure process. Based on the Deed Document Tax recorded on these deeds, it appears they are reacquired by Disney at prices comparable to what it pays for ROFRed deeds.

In my opinion, the situation described by the OP is plausible. The deed's owner was in arrears on the loan principle and/or annual dues and had been in discussion with Disney about their options. They decided to list the deed on the resale market, hoping to recover something from their deed. At the same time, Disney offered to buy the deed back at a certain price. The OP made an offer, but the owners decided to take Disney's offer instead.

As a point of reference, my numbers show that since BLT's inception Disney has reacquired 592 of 1,679 deeds via the "Warranty Deed in Lieu of Foreclosure" process.

 

[Dean]

FYI - Disney does buy back deeds using a document called a "Warranty Deed in Lieu of Foreclosure." It appears these are deeds involving owners that are in the early stages of the foreclosure process. Based on the Deed Document Tax recorded on these deeds, it appears they are reacquired by Disney at prices comparable to what it pays for ROFRed deeds.

In my opinion, the situation described by the OP is plausible. The deed's owner was in arrears on the loan principle and/or annual dues and had been in discussion with Disney about their options. They decided to list the deed on the resale market, hoping to recover something from their deed. At the same time, Disney offered to buy the deed back at a certain price. The OP made an offer, but the owners decided to take Disney's offer instead.

As a point of reference, my numbers show that since BLT's inception Disney has reacquired 592 of 1,679 deeds via the "Warranty Deed in Lieu of Foreclosure" process.

But most of those are effectively administrative foreclosures I believe.

 

[wdrl]

But most of those are effectively administrative foreclosures I believe.

Yes, they are administrative foreclosures, but the process fits the situation described by the OP.

 

[supersnoop]

Doesn't a deed-in-lieu effectively settle the debt? So the price reflected on the deed should be basically what was owed, right?

 

[NHLFAN]

As a point of reference, my numbers show that since BLT's inception Disney has reacquired 592 of 1,679 deeds via the "Warranty Deed in Lieu of Foreclosure" process.

It was a BLT contract that the offer was made on.

 

[wdrl]

Doesn't a deed-in-lieu effectively settle the debt? So the price reflected on the deed should be basically what was owed, right?

Not necessarily. In fact, there are instances where I know that is not the case. Some owners are in arrears only on their maintenance fees and owe less than $2,000. DVD will buy back the deed at, for lack of a better term, the going "ROFR" rate. The proceeds are used to pay any outstanding debts and fees, and if there is any money left over the owner pockets the difference.

There is a wide range of prices DVD pays to reacquire deeds for the same resort, much like the wide range of prices that are seen on the resale market for deeds for the same resort. I have no reason to think DVD sets the reacquired price based on what is owed on the deed.

 

[Wakey]

If you want to buy to rent a lot consider s cheaper resale contract like SSR. You will be able to rent the points still no problem (they'll still go within a day or so) and people can rent the points in the summer months at 7 months or less and book virtually anywhere, particularly 1 beds. ROI is much sooner on a $75 a point contract.

 

[Neytiri411]

You are correct, I had only made the offer.

More I think about it they might have been upside down on the contract and owed Disney back fees and would have had to bring cash to closing so they might have worked something out or are going the foreclosure route.

NHLFan, I'm so curious what resale site you used. Because I had a sort of similar weird experience with am offer I made. The contract was a nice one (loaded) but was over priced, even for a loaded contact. The contract had been available for at least 2-3 weeks as i was watching it. When I spoke with the broker before I made an offer, she told me the seller needed to bring cash to the table, was having life issues, had bought the contract with a loan, etc. Honestly I didn't care, the seller canot take my offer, negotiate, or decline so I just didn't really care about those details. When I made the offer I was annoyed because I didn't hear anything from the broker for 2 days. That is too long imo to hear SOMETHING. Like, "We've received your offer" or, the seller is considering, or just no. Whatever. When the broker did get in touch, she said the seller is still having life issues and needs to see if they can "move some money around". Whatever that means. She said they would know within the next week or two. Lol, no. So I removed my offer because I'm not waiting around for that mess. I noticed about 5 days later that the listing was gone. Sold? I don't know? Removed by seller? Who knows. I just thought that particular experience was weird because the broker wasn't very responsive and may have been pulling my chain, I'm still not sure. I never made another offer with them though.

 

[NHLFAN]

NHLFan, I'm so curious what resale site you used.

My offer was with DVCSales .

 

[Neytiri411]

My offer was with DVCSales .

That's interesting. Exact same resale site from my story above. In my case, it made me wonder if a better offer came along and they just didn't want to tell me and deal with a bidding war? Or are there really this many life issue sellers out there? Seems fishy to me personally. I have a contract pending and awaiting ROFR with another company (my 3rd one) so I'm hoping to not have to do this again for awhile.