Resale Market & Disneys right of refusal...

[JimmyDisney]

I just put a deposit on a little less then 500 points at BWV. I now have to wait to see if Disney will buy them back first. Has Disney purchased back points in the $69-$72 dollar range? Anyone have any experience with this, or Disney's history of buy backs?
Thanks in advance for your help!
Jimmy

 

[CarolMN]

Without hearing any other specifc details about the contract, I would bet (heavily) that Disney will buy it. Hope I'm wrong.

Best wishes -

 

[tjkraz]

I agree with Carol. DVC's current selling price for points at BWV is $89 per point. Assuming that you offered $72 plus maintenance and closing (assume about $77 per point), DVC can still gross about $6000 by exercising ROFR and selling off the points to current members. And there is almost certainly a waiting list of current members who would take those 500 points off DVC's hands in a heartbeat.

One big advantage that DVC has is that they can break apart the 500 points into as many units as they wish. Buying resale, you need to buy the entire contract intact, which tends to drive down the per-point price on the larger contracts. With fewer individuals willing (or able) to acquire that many points at once, you end up with a lower selling price and increased chance of ROFR.

Good luck.

 

[Cruelladeville]

It also depends upon use year, and if Disney has any people waiting for those points. For example, a Feb use year almost certainly would be bought back, because there are LOTS of people on the waitlist for Feb points. Now, if it was a March use year, and no one was waiting for March points, you might squeek through. And are you paying closing and dues? That makes a difference(it might help you if you were). Are there banked points? That could be the kiss of death for getting those points, depending upon who's on the waitlist at Disney.

I once bought a contract that was way under Disney's cut-off, and they let it go thru because (Ithink) the points had been borrowed. It's a less attractive contract to Disney if they can't immediately divide up the contract and sell it to others.

 

[DVCforMe]

There's a long thread over on the DVC Community board started by Beca that lists dozens of re-sales that have passed, been bought up by Disney, or are waiting to clear ROFR. It's a good way to see what is getting through ROFR. Good luck, if you get the contract you've gotten a bargain!

 

[jel0511]

I also agree that at that price range, you're most likely going to have ROFR acted upon that contract. As stated above, DVC is currently selling points at $89 per point, and if this a particularly atractive contract, meaning the contract isn't heavily borrowed, DVC most likely will buy it back.

 

[ColoradoBelle1]

Yep,
Cruella is right. Disney will buy it back if it can make enough money off of it.
If Disney exercises ROFR then it assumes the 'buyer' position and the seller gets paid whatever the seller (and his broker) would normally get..and you get bupkis (sp?).

What you might try, IF this is a contract without a Realtor involved, is structuring it so that it LOOKS like the seller is getting $76.00-$80 per point (I just had a BWV at net $76.50 pass ROFR) and that YOU are paying 2005 dues. You'd have to be creative...say maybe have a third party (assuming you aren't using a broker) to get a commission for the sale...paid for by the seller. After the sale...that money might find its way back to you. But if Disney RORFd anyway, the seller would end up with BIG bucks and they would be happy either way...so win/win.

Good luck!

 

[DizWacko]

What I would be interested to know is why the seller would ever sell BWV for high 60s low 70s per point?? What kind of resale broker would ever suggest such a price?

 

[DrTomorrow]

What I would be interested to know is why the seller would ever sell BWV for high 60s low 70s per point?? What kind of resale broker would ever suggest such a price?

3 possibilities:

1. Family emergency, where cash is needed NOW!

2. Legal issues - divorce, disagreement between owners, etc. - where maximizing price per point is not a priority.

3. Difficulty in selling a large (500 point) contract. As mentioned, Disney can split contracts up for resale; also, they offer financing whereas other sellers do not.

ETA: Found this comment in an "eBay Auction" thread:

My medical bills this past year were huge, I just want to sell, pay off debts and go on a cruise, I am more than willing to take a loss just to get back the capital.

 

[tjkraz]

What you might try, IF this is a contract without a Realtor involved, is structuring it so that it LOOKS like the seller is getting $76.00-$80 per point (I just had a BWV at net $76.50 pass ROFR) and that YOU are paying 2005 dues. You'd have to be creative...say maybe have a third party (assuming you aren't using a broker) to get a commission for the sale...paid for by the seller. After the sale...that money might find its way back to you.

"Creative" is an interesting way to describe fraud.

What I would be interested to know is why the seller would ever sell BWV for high 60s low 70s per point?? What kind of resale broker would ever suggest such a price?

Hard to tell without knowing the details. Could be a contract that's been borrowed against and doesn't have any points available for a year or two. Or it could just be the nature of the market on such a large contract. We are talking about a $40,000 purchase here.

We also don't know for certain that there was a broker. Arranging a direct sale would save the 12-15% commission, still leaving more in the seller's pocket even if he/she agrees to accept a lower per-point fee.

 

[RWinNOLA]

The $69-72 range seems pretty low unless perhaps all of next years points were borrowed. I suspect that Disney may exercise their ROFR on this contract.

I'm waiting on a 150 pt contract at $78/pt (none banked or borrowed) submitted 2/28 and feel pretty good about it going throught but still don't feel like it's a slam dunk.

Someone else already mentioned the thread started by Beca on the DVC Community Board. This would be a good place for you to check out and get a feel for what the "cut-off" at the BWV is. My guess is it's in the neighborhood of $76 / pt for BWV and even higher for BCV.

 

[RWinNOLA]

3. Difficulty in selling a large (500 point) contract. As mentioned, Disney can split contracts up for resale; also, they offer financing whereas other sellers do not.

In a situation like this, does the sellar have the option to split the contract into two or three different resales (250-250 or 200-150-150)?

Sorry for getting off topic.....just curious.

 

[DrTomorrow]

In a situation like this, does the sellar have the option to split the contract into two or three different resales (250-250 or 200-150-150)?

Sorry for getting off topic.....just curious.

No - but Disney does .

 

[tjkraz]

No - but Disney does .

And buyers can request contracts from DVC in smaller increments without penalty or additional fees. In other words, the original owner of the 500 pts could have purchased three separate contracts of 150-150-200 pts. Any or all of those contracts could later be sold-off individually.

In addition to Dr. T's list of reasons for selling, add that the owner may have simply discovered after many years that 500 points is too many. As the owner of a single 500pt contract, the only course of action available is to sell the entire contract and buy another containing fewer points. In the example above with the 3 separate contracts, it would have been relatively simply to sell the two 150pt contracts and keep the 200pt contract.