DVC foreclosures?

[nkereina]

Are DVC contracts that are facing foreclosure ever sold on the re-sale market? I've read scenarios where folks who financed through Disney were behind on several payments and they either had to fork over their balance or be foreclosed on, or they had to option to turn over their deed in lieu of foreclosure. I suppose if Disney relinquishes the deed due to potential foreclosure, they could just dissolve the contract and sell a new one at regular price. But do owners ever try to work something out with a potential buyer like a short sale, etc? Either through Disney or a re-sale broker they may have financed through? Thanks!

 

[vicki_c]

Since DVC gets ROFR, I don't think that could ever happen. As you said, they just take the points and resell them to a new owner.

 

[summabreeze85]

The only thing I've seen are bankruptcy sales through eBay auctions. Lately it's been vero beach contracts and while I really wanted to buy, the exact # of points available this year were unknown and it was too much of a gamble.

 

[Wolfie68]

What is ROFR?

 

[AppleDisneyDad]

Right of First Refusal Basically once a resale price is agreed upon by a seller and a buyer, Disney can take over as the buyer if they want to. The seller gets their price either way. Traditionally Disney takes 3-4 weeks to make their decision if they want to take over.

 

[vicki_c]

ROFR = Right of First Refusal

Means Disney always retains the option to purchase the contract (for the agreed upon price) from a resale offering instead of letting the buyer buy it.

 

[Dean]

Are DVC contracts that are facing foreclosure ever sold on the re-sale market? I've read scenarios where folks who financed through Disney were behind on several payments and they either had to fork over their balance or be foreclosed on, or they had to option to turn over their deed in lieu of foreclosure. I suppose if Disney relinquishes the deed due to potential foreclosure, they could just dissolve the contract and sell a new one at regular price. But do owners ever try to work something out with a potential buyer like a short sale, etc? Either through Disney or a re-sale broker they may have financed through? Thanks!

They are sold but DVD still has ROFR as noted. However, some indirect info suggests they shy away from buying back contracts that they are foreclosing on or at least they have in the past. One of my contracts bought a number of years ago was a foreclosure (didn't know at the time I agreed to buy it) and it went through at $4 under the fairly rigid ROFR price at the time. That was when DVD was very active with ROFR and prices were only maybe 20% less resale. To the point where a broker I know felt they needed to find out why it went through at the price it did and call their contact at DVC. Legally and ethically they likely shouldn't have shared the info with the broker (wasn't involved with the purchase) but they did.