Questions about purchasing a contract in bankruptcy through EBAY

[Dean1953]

i noticed an EBay listing a couple of days ago. It is for a DVC Boardwalk contract with 170 points. I placed three bids, at $5,400, $6,00 and $6,800. One other person keeps outbidding me, and with 2 days left and 87 people watching, I think that I'll pass on it. First, above the winning bid, there is a $200 fee from the company selling it. Second, as it is in bankruptcy, the Judge handling the case has final say if the Court will accept the winning bid. Third, because the seller didn't pay MF for two years, there is a lien on the contract by Disney for around $3,800, with penalties and interest accumalating daily (the winning bidder pays these on top of their bid). The company handling the sale on EBay will supply all of the documents needed to do closing, presumably either with a title company or by yourself. Finally, of course, Disney has the right of first refusal. If Disney exercises it, the winning bidder get back their money paid to date.
Right now, the winning bidder would pay $6,855, plus $200, plus $3,800 separately to DVC. A little over $11,000. I'm quitting because I believe that it will sell for $1,000 to $2,000 above that. Just checking Fidelity, a comparable contract would sell for $15,000 to $17,000. There is a very real possibility that Disney would exercise its ROFR, particularly if they can just pay the MF of $2,200 and waive the interest and penalties on their purchase. If it got by Disney, how comfortable would you be paying $11,000 to $13,000 for a series of documents that you could, presumably, turn into a recorded title and have Disney accept the title? Personally, I don't want to tie up that kind of money for 30 days, if I believe that all of this will end with Disney buying the contract. I'm assuming that the people handling this sale did contact Disney about purchasing the contract but were told that Disney could only take it in ROFR.

 

[NickBCV]

i noticed an EBay listing a couple of days ago. It is for a DVC Boardwalk contract with 170 points. I placed three bids, at $5,400, $6,00 and $6,800. One other person keeps outbidding me, and with 2 days left and 87 people watching, I think that I'll pass on it. First, above the winning bid, there is a $200 fee from the company selling it. Second, as it is in bankruptcy, the Judge handling the case has final say if the Court will accept the winning bid. Third, because the seller didn't pay MF for two years, there is a lien on the contract by Disney for around $3,800, with penalties and interest accumalating daily (the winning bidder pays these on top of their bid). The company handling the sale on EBay will supply all of the documents needed to do closing, presumably either with a title company or by yourself. Finally, of course, Disney has the right of first refusal. If Disney exercises it, the winning bidder get back their money paid to date.
Right now, the winning bidder would pay $6,855, plus $200, plus $3,800 separately to DVC. A little over $11,000. I'm quitting because I believe that it will sell for $1,000 to $2,000 above that. Just checking Fidelity, a comparable contract would sell for $15,000 to $17,000. There is a very real possibility that Disney would exercise its ROFR, particularly if they can just pay the MF of $2,200 and waive the interest and penalties on their purchase. If it got by Disney, how comfortable would you be paying $11,000 to $13,000 for a series of documents that you could, presumably, turn into a recorded title and have Disney accept the title? Personally, I don't want to tie up that kind of money for 30 days, if I believe that all of this will end with Disney buying the contract. I'm assuming that the people handling this sale did contact Disney about purchasing the contract but were told that Disney could only take it in ROFR.

I saw that listing as well and thought about bidding. I assumed a bid of about $9,000 would win it given the outstanding dues etc.....I actually would be surprised if Disney took it as they could recover the unpaid dues from whoever buys it assuming that it goes for around that price.

My bigger concern was dealing with a bankruptcy proceeding and the hassle that goes with that. If I was to buy it I would absolutely make sure I purchased title insurance for it. For me just too much hassle. If you bid again good luck.

 

[CraigInPA]

The thing that worries me about this auction (I was one of those 87 watchers) is that the full amount has to be paid before it is submitted to the judge for approval. And then it's held until ROFR is completed. Because it's a bankruptcy situation, your money could be held for several months before you know if you're going to own the contract.

For me, the price would have to be cheap to go through all that effort and risk. But, if it's cheap, it'll get taken in ROFR. It's a no-win situation, but interesting to watch!

There's another seller who occasionally sells DVC on ebay. Their auctions also have the requirement that you send then payment in full before they send it off to ROFR. (in fact, their payment policy is payment in full within 48 hours.) Their auctions always end with very low prices. When I attempted to buy one of their listings, they couldn't produce a proper bill of sale, wouldn't give me information on the seller or even the unit number to check that it existed (they said it was to prevent me from going directly to the seller!), and acted totally unprofessional. Doing some research on them, they don't have a business license, aren't a licensed real estate broker, wouldn't tell me who would be holding the money I'd be sending them in escrow, and do business out of a location that can't receive mail (at least that's what they told me!). So many red flags, I didn't send them anything and reported them to their state and to Ebay. Ebay cancelled their account. They opened a new account under another name and are back to the same old tricks. I suspect they don't have the actual timeshares to sell, and are using buyer's money to float their business. After they've had your money for a month or two, they'll tell you that the contract got taken because the price is so low, and then (presumably) give your money back to you. As of 10-3-17, this company is listing 300 points at "Wilderness Lodge" on ebay. Obviously, they aren't selling a real DVC membership, since it was renamed Boulder Ridge over a year ago AND they're listing the end date as 2057. Had they had the real contract to sell, they would know those facts. They're also selling an Old Key West (2057) 310 point contract. Seller's ebay id is timesharconnection_0. All sales are private, so you can't see what they've sold in the past. Negative feedback posted by someone else echos my issues with them.

 

[NickBCV]

That is kind of shady. Scary the scams people come up with sometimes. You wish you could take the brokers out of the mix but at least with them you get some sense of a legitimate transaction.

I have a pending contract right now purchasing directly from an owner and was able to confirm the ownership through the OCC website. I was able to pick my own attorney as well.

Got a great price too but now the wait is on to see if I pass ROFR.

I figure it is worth a shot to see if I can get a great value. Only had to send them $1,000 as a deposit.

 

[supersnoop]

I saw that listing as well and thought about bidding. I assumed a bid of about $9,000 would win it given the outstanding dues etc.....I actually would be surprised if Disney took it as they could recover the unpaid dues from whoever buys it assuming that it goes for around that price.

My bigger concern was dealing with a bankruptcy proceeding and the hassle that goes with that. If I was to buy it I would absolutely make sure I purchased title insurance for it. For me just too much hassle. If you bid again good luck.

Why would title insurance be necessary? Wouldn’t the bankruptcy essentially clear any undisclosed claims to the property?

 

[NickBCV]

Why would title insurance be necessary? Wouldn’t the bankruptcy essentially clear any undisclosed claims to the property?

One would think but I wouldn’t want any creditors coming out of the woodwork in the future and making a claim. Not to say they would win but who needs the legal hassle.

Title insurance could give you piece of mind at least.

 

[TexasChick123]

I would run away. There was a great discussion on this by one of the users on here. Basically, it's a mess, and a lot can go wrong included clouded title issues. Be careful if you ever decide to proceed with one of these.

 

[Cyberc1978]

As I have read in the past then Disney can’t rofr on foreclosures and bankruptcies.

So if the contract sell for I.e. 10.000$ Then it will pass.

If Disney always had the last saying then there wouldn’t be any reason to try and buy a foreclosure/bankruptcy contract

 

[NickBCV]

i noticed an EBay listing a couple of days ago. It is for a DVC Boardwalk contract with 170 points. I placed three bids, at $5,400, $6,00 and $6,800. One other person keeps outbidding me, and with 2 days left and 87 people watching, I think that I'll pass on it. First, above the winning bid, there is a $200 fee from the company selling it. Second, as it is in bankruptcy, the Judge handling the case has final say if the Court will accept the winning bid. Third, because the seller didn't pay MF for two years, there is a lien on the contract by Disney for around $3,800, with penalties and interest accumalating daily (the winning bidder pays these on top of their bid). The company handling the sale on EBay will supply all of the documents needed to do closing, presumably either with a title company or by yourself. Finally, of course, Disney has the right of first refusal. If Disney exercises it, the winning bidder get back their money paid to date.
Right now, the winning bidder would pay $6,855, plus $200, plus $3,800 separately to DVC. A little over $11,000. I'm quitting because I believe that it will sell for $1,000 to $2,000 above that. Just checking Fidelity, a comparable contract would sell for $15,000 to $17,000. There is a very real possibility that Disney would exercise its ROFR, particularly if they can just pay the MF of $2,200 and waive the interest and penalties on their purchase. If it got by Disney, how comfortable would you be paying $11,000 to $13,000 for a series of documents that you could, presumably, turn into a recorded title and have Disney accept the title? Personally, I don't want to tie up that kind of money for 30 days, if I believe that all of this will end with Disney buying the contract. I'm assuming that the people handling this sale did contact Disney about purchasing the contract but were told that Disney could only take it in ROFR.

Bid is up to $10,163 with two days left. Starting to get pricey.

 

[Dean1953]

That puts it within $1,000 of buying the same contract from a legitimate resale company. I won't be putting another bid on it.

 

[Pluto777]

What do you guys think is the MOST RELIABLE, most up to date list of DVC's that were taken on ROFR? Just trying to get a sense of what a 'fair price' to pay would be at a DW DVC...

 

[Bing Showei]

What do you guys think is the MOST RELIABLE, most up to date list of DVC's that were taken on ROFR? Just trying to get a sense of what a 'fair price' to pay would be at a DW DVC...

DVC Resale Market has a blog that they update each month on their actual sales ROFRs. They don't report the average price for sales, but it does show you what gets taken.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-rofr-september-17-report/

That said, as many have pointed out, sale price is only one piece of it. When it comes to ROFR, Disney likes to keep us (at least those on this board) guessing.

This may be helpful as well

https://www.disboards.com/threads/r...ost-for-instructions-formatting-tool.3615204/

 

[Pluto777]

DVC Resale Market has a blog that they update each month on their actual sales ROFRs. They don't report the average price for sales, but it does show you what gets taken.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-rofr-september-17-report/

That said, as many have pointed out, sale price is only one piece of it. When it comes to ROFR, Disney likes to keep us (at least those on this board) guessing.

This may be helpful as well

https://www.disboards.com/threads/r...ost-for-instructions-formatting-tool.3615204/

It's weird you know? I mean why is't ROFR simply SET at a certain price point so we know the bottom of the market?

 

[Matty B13]

ROFR isn't set at a certain point to keep all resale buyers guessing, that way DVC doesn't have to buy all the cheap contracts to set the price. They only want to buy the contracts they need to fill direct purchases.

There are countless theories about the reasons for ROFR.

 

[Pluto777]

ROFR isn't set at a certain point to keep all resale buyers guessing, that way DVC doesn't have to buy all the cheap contracts to set the price. They only want to buy the contracts they need to fill direct purchases.

There are countless theories about the reasons for ROFR.

Seems very unfair though that one guy buys at 90 a point and loses to ROFR and another buys the SAME at 85 a point and passes ROFR...

 

[Toreby]

Seems very unfair though that one guy buys at 90 a point and loses to ROFR and another buys the SAME at 85 a point and passes ROFR...

Disney has no interest in setting a minimum floor. That would limit their options as far as what to ROFR and when.

It may seem unfair, but again, Disney couldn't care less. In their perfect world, everybody would buy direct. While they benefit from a healthy resale market, they are not going to do any more to help aside from ROFR, which while annoying, helps the resale market tremendously.

 

[chalee94]

Seems very unfair though that one guy buys at 90 a point and loses to ROFR and another buys the SAME at 85 a point and passes ROFR...

Remember that from Disney's perspective, it's very unfair that either guy gets to buy at less than the $150+ direct price that they are offering. If the losing buyer and 2 friends that he complains to wind up paying extra to buy direct, then Disney would consider that to be a win.

If someone tells you that ROFR sets a price floor that somehow protects your value as an owner, they are simply mistaken.

 

[Dean1953]

The bankruptcy contract sold for $13,500, which becomes over $17,000 when you tack on the $3,800 plus in MF's, penalties and late fees. Whoever bought it could have bought it for less at resale. Hopefully, whoever bought it won't run into any major problems, which they could have avoided by buying resale.