Resale Negotiation Question

[bhiggs7]

I am currently looking into DVC and was wondering something. Does a seller paying for closing costs change your chances with ROFR or is the per point amount the key? Or is the whole package - closing, mf, total cost what matters? Just thought this info might help in negotiating. Thanks for the help - love the boards.

 

[cvjw]

We always pay closing as the buyer. We don't want to have the seller pay closing - that could make the contract more attractive to Disney as the buyer. We negotiate on price per point, and usually find a contract where the seller pays all or most of the maintenance fees. We have had 3 contracts pass ROFR in the last year, with one more before ROFR right now.

 

[disneynutz]

Disney considers the whole package for ROFR.

Bill

 

[walkdmc]

I was told by the agency we used to purchase a DVC resale that Disney likes to see the buyer pay some of the maintenance fees and closing costs. He didn't get more specific and I didn't ask but he's been in the business for a long time. We took his advice and passed.

Seems to me the only thing Disney would care about is the price/pt.? But I guess that's not true.

 

[Sandisw]

I was told by the agency we used to purchase a DVC resale that Disney likes to see the buyer pay some of the maintenance fees and closing costs. He didn't get more specific and I didn't ask but he's been in the business for a long time. We took his advice and passed.

Seems to me the only thing Disney would care about is the price/pt.? But I guess that's not true.

I was told something similar but that basically, they do look at the total cost they would assume as a buyer.

For example, a 50 point contract at $80/ppt with buyer paying closing would cost Disney $4350 to buy through ROFR (assuming $350 for closing costs).

But, a 50 point contract for $83/ppt with seller paying closing would only cost Disney $4150 to buy through ROFR.

In this case, even though the price per point was higher, the total cost of the contract is less. Could make it more attractive to Disney this way.

 

[JimMIA]

I think we're all guessing here, and DVC's ROFR decisions have been a mystery to me since I first started looking at DVC more than 5 years ago.

I would find a contract that you like and offer a fair price that you feel confident will pass ROFR. I hate to see people go through all the research and searching and then get their contracts ROFR'd for a couple hundred bucks.

 

[godalejunior]

We as the buyers negotiated to not pay closing...and only paid mf on 37 of the 200 points as those were not borrowed.

 

[JimMIA]

We as the buyers negotiated to not pay closing...and only paid mf on 37 of the 200 points as those were not borrowed.

That's a good illustration of the fact that you have to evaluate each resale contract on its own merits because no two are the same, even if they have the same number of points at the same resort.

If you find a resale contract with a huge number of banked points, you're going to pay a higher price and have less negotiating leverage. For a contract with full points or only a handful used, you should pay a middle-of-the-road price and expect more or less "normal" terms.

If you're buying a contract stripped of 80+% of the points for next year (as appears to be your case), you have much more leverage. If you don't need the points next year anyway, sometimes a stripped contract can be a great buy for the right price.

The important thing is to find a contract that meets your family's needs and then get it through ROFR.

As Becca (the originator of the ROFR thread) wrote: "The best contract is the one with YOUR name on it!"

 

[DenLo]

Disney considers the whole package for ROFR.

Bill

I agree, Disney likes a bargain just like we do. If the whole package is a good price, it has a higher chance of being ROFRd.

 

[LouisianaDisneyFan]

Honestly, I think there is little method to the madness that is currently the ROFR decision process. Look at Dale's recent purchase at GCV. He paid $20/point less than the current going rate at Disney and the seller paid closing costs. GCV is a property with current inventory and a current promotional process, so Disney is prime for flipping the property quickly.... yet they still let it pass. Then take a look at some of the low-ball contracts at other resorts that have passed recently. I think anything other than BCV will pass right now, regardless of price or seller concessions.

If you find a contract that you like, make an offer for what you are willing to pay. If you find an unwilling seller, move to the next contract. With so many contracts currently available, you will be able to find what you want at a FAIR price eventually. And, in the unlikely event that Disney exercises it's right and purchases the contract, there are plenty more available. I went through the process of "what-if'ing" with the first resale we purchased, and I ended up paying too much. I was too busy worrying about passing the first time through instead of what the bottom line should be. By the time I had closed on that property, prices across the board had dropped and I felt pretty frustrated that I had wasted the extra money to ensure the contract would pass ROFR. It's in the buyer's best interest to go through this process with an open mind and time to spare before you "need" the points. Then, you can approach each offer with a relaxed, well-thought-out strategy.

 

[godalejunior]

And...I bought a fully loaded contract with all 2009 points with 2010 points being borrowed but available for use. It was not stripped.