Is this legal????

[icydog]

I heard from a friend that a man "sold"a relative his Boardwalk property, with many banked points, for $66 a point.

He got what he wanted, Disney exercised their ROFR and bought the property. He didn't have to wait for someone to buy his property on a broker's list of DVC properties and he didn't have to pay the 10% commission that brokers charge.
Is this legal? Is it done all the time? I am intrigued.

 

[luckytso]

How interesting!! Sounds like a great idea. I guess you need to have the price low enough to make sure Disney will buy it back. If they don't, then you don't necessary need to really close the trasaction with the "relative" and just try it again some other time.

 

[icydog]

Yeah, I thought it was an interesting idea myself but I am wondering if it is legal. Sounds too good to be true!

 

[Cruelladeville]

Actually, if you are selling to a relative, I don't think you even need to file the ROFR. I asked Member Accounting, and that's what I was told, but haven't tried it yet, so it's possible that they told me wrong. The people in Member Accounting are very smart, but their greatest gift is not teaching and explaining to others.

 

[skelooch]

I don't think Disney can tell anyone what the minimum cost per point you can sell at, all they can do is buy it from you at your asking price.

My question is you offer to sell you point at a low per point price and Disney execrises there ROFR can you then change your mind and not sell at all. I know with regular real estate even if someone agrees to your asking price you are still not obligated to sell.

 

[HeatherPage]

Well, if there is a contract pending or something like that I think you are obligated to sell, i.e. my parents made an offer on a house a few years ago, pending the sale of their house, they had until "X" date to sell their house" they were still within the "X" date of contract when the seller was offered the full original asking price and the other buyer was going to pay cash, the man was going to take that offer when his real estate agent reminded him that he had signed a contract for "X" amount from my parents and was contractually obligated to sell if the parents sold their house in time-which they did. The seller "thought" he could sign the contract and only take it if nothing better came along (he's probably still kicking himself-oh well). Sooo, my parents got their house, this guy was a complete (fill in the blank) at the closing and all ended well. I guess some people could say he didn't have to honor the contract, but then he would have been sued.

 

[Dean]

You can't just offer it to DVC and them buy it. You have to have a buyer first. Your desciption fits someone I know. He did indeed sell OKW for $66 pp privately and since it was a private sale, no commission. No reason one need s broker to sell DVC.

 

[icydog]

Originally posted by Dean
You can't just offer it to DVC and them buy it. You have to have a buyer first. Your desciption fits someone I know. He did indeed sell OKW for $66 pp privately and since it was a private sale, no commission. No reason one need s broker to sell DVC.

Dean or anyone for that matter,
If you sell privately does the contract go before Disney's review board and can they exercise the ROFR. I think that was this guy's intent to MAKE Disney buy back his property without going through a broker. He really wanted the money from Disney and not really from the relative so he low balled the asking price..
What do you think, is this possible??

 

[Dean]

Originally posted by icy-dog
Dean or anyone for that matter,
If you sell privately does the contract go before Disney's review board and can they exercise the ROFR. I think that was this guy's intent to MAKE Disney buy back his property without going through a broker. He really wanted the money from Disney and not really from the relative so he low balled the asking price..
What do you think, is this possible??

Sure it's possible but why would anyone want to do that. Anyone looking for a resale at that resort would be interested at that price. I'm sure some would pass because of the risk with ROFR but overall I would expect many willing to take the chance. You still have to go through the ROFR. Besides, he couldn't force DVC to buy it back, only present them with an offer they couldn't refuse. The only advantage is that one can avoid the sales commission and possibly force a quick sale. I don't know why anyone would use a broker for DVC sales anyway, it isn't that hard to find a buyer if one is price appropriately. May as well save the money. The closing can be handled the same with or without a broker.

 

[HeatherPage]

Does anyone know what the average percentage is that a broker charges?

 

[Dean]

Originally posted by HeatherPage
Does anyone know what the average percentage is that a broker charges?

Most are 12-15% with a min of around $1000, which ever is the higher amount. Some will do fixed amount regardless. I think $795 and 10% is the cheapest I've seen in the past few years. Most will do a non exclussive contract so you could list and still look for a buyer on your own. I know Shontell lists that way.

 

[HeatherPage]

Interesting. Thanks!

 

[icydog]

Originally posted by Dean
Sure it's possible but why would anyone want to do that. Anyone looking for a resale at that resort would be interested at that price. I'm sure some would pass because of the risk with ROFR but overall I would expect many willing to take the chance. You still have to go through the ROFR. Besides, he couldn't force DVC to buy it back, only present them with an offer they couldn't refuse. The only advantage is that one can avoid the sales commission and possibly force a quick sale. I don't know why anyone would use a broker for DVC sales anyway, it isn't that hard to find a buyer if one is price appropriately. May as well save the money. The closing can be handled the same with or without a broker.

I hear you,but finding a candidate to buy at any price w/o a broker seems impossible. I looked at the Tug2 list of DVC property for sale and nobody seems to buy. They just sit there even with low prices since DVC is a hard concept to understand for other TS prospective buyers. When you list points that can be used at other DVC resorts I think people get overwhelmed and don't buy.

In any case it would be cheaper to sell privately and to skip the high brokers fees. If a relative did "buy" your property, with the intent to have Disney use the ROFR, how would thay go about consumating the sale. I am intrigued with this idea and may try it myself!

 

[Dean]

Originally posted by icy-dog
I hear you,but finding a candidate to buy at any price w/o a broker seems impossible. I looked at the Tug2 list of DVC property for sale and nobody seems to buy. They just sit there even with low prices since DVC is a hard concept to understand for other TS prospective buyers. When you list points that can be used at other DVC resorts I think people get overwhelmed and don't buy.

In any case it would be cheaper to sell privately and to skip the high brokers fees. If a relative did "buy" your property, with the intent to have Disney use the ROFR, how would thay go about consumating the sale. I am intrigued with this idea and may try it myself!

I don't think it'd be difficult to find a seller at a fair price. I'm sure one could do as you suggest, structure a sale with the purpose of having DVC buy it. I suspect it's illegal. If DVC did let it go through and you didn't complete it, you'd have some "splainin" to do. Remember that just because an ad has been sitting there doesn't mean it's still available.

 

[bfosbenner]

Could'nt one just offer the points to Disney to buy back. ROFR I believe means that they get first rights to purchase. If the price was set they could buy it back even if there was no buyer.

 

[Dean]

Originally posted by bfosbenner
Could'nt one just offer the points to Disney to buy back. ROFR I believe means that they get first rights to purchase. If the price was set they could buy it back even if there was no buyer.

DVC won't do this. You must submit a valid contract to activate the system.

 

[icydog]

Originally posted by bfosbenner
Could'nt one just offer the points to Disney to buy back. ROFR I believe means that they get first rights to purchase. If the price was set they could buy it back even if there was no buyer.

Don't know if Disney would do that. It they did there wouldn't be a need for those brokers who charge outrageous fees to list your property. Since they do exist one can assume Disney does not get into the business of buying back points. However, I will call and check with member accounting. It is a very good idea in theory though.

Dean,
I thought if an ad appeared on Tug it was NOT sold. I think I might list my property there. I just don't think Tug users would know the value of "banked points available and all of this years points" etc. Do you think they would understand that? DVC seems to be a queer duck when it comes to how they bank points and use years etc.
Marylyn

 

[Dean]

Originally posted by icy-dog
Dean,
I thought if an ad appeared on Tug it was NOT sold. I think I might list my property there. I just don't think Tug users would know the value of "banked points available and all of this years points" etc. Do you think they would understand that? DVC seems to be a queer duck when it comes to how they bank points and use years etc.
Marylyn

On TUG, the add will run for at least 3 months if not removed. So unless the seller contacts TUG to remove it, it wont' be done. If you look at the ads, I doubt the good ones are there. The one for BWV at $93 pp is the latest one but my guess it isn't sold or at least at that price. It never hurts to ask, you could always contract the seller.

Some TUG members would have interest, others not. You're just looking for one buyer. I know several that have sold DVC from TUG.