ROFR-Does it go on forever??

[deerh]

Just got through signing all the DVC papers for an add-on at BWV. Mailing it today! WOO HOO!.
But, I had one question, I read carefully, and it LOOKS like (if I can read Leaglize), that ROFR does not end, and it does not say it has the right to end it. Does that mean it could go on and on, and keep our "values in dollars" up? I read it to meant, that if you sell or transfer you run at a competitive risk against DVD., etc, etc. It said no date, etc.
Anybody confirm this?
This would be nice as the "values' of our DVC would not go down, I guess in 2033-2042 it would, but in the meantime, for the next 4-15 yrs or more, does this mean $125\pt in 2011? Especially if we get an extension to 2054. Wow, that would make it look good if people bought in at $52 now wouldn't it?
DeerH

 

[DebbieB]

DVC will only exercise it's ROFR if they believe they can resell it at a reasonable price. For example, if in 2033 the market will only pay $52 per point, DVC is not going to exercise ROFR for an offer higher than that because they will not be able to resell it.

 

[deerh]

So, I am asuming that for the next 20 years or so, the price will go up and up thanks to ROFR. So, I guess $125/pt does not seem impossible, esp if they build Eagle Pines say in 2007 or 2008, and IF they extend to 2054.... Interesting, a timeshare more than doubling in price..... I guess that is unheard of..........
DeerH

 

[Granny]

At some point, the value of our DVC ownership will undoubtedly begin to decrease. And it will surely do so before 2033, unless resort room pricing and booking goes through the roof in the next 30 years.

All things equal, I think the value of resales will start to decline significantly when we see less than 30 years remaining (2012).

However, if SSR opens with a 2054 ending.....that could negatively influence the resale value of current DVC contracts.

It's important to remember one thing.....Disney has the ROFR for one reason only....to make sure that the resale market does not undermine their ability to sell new construction. If they ever get to the point where they aren't building DVC units anymore, or don't feel that the "older" DVC resorts (current ones) are truly competing with new construction, then they will let the resale market go where it will. And that will definitely be much, much lower.

 

[deerh]

Here it is straight from DVD:
"DVD's right of first refusal is a covenant that runs with the land and shall ALWAYS be a requirement binding on any succesor in title to PURCHASER." So, it SEEMS that DVD will always offer this, I suspect that if it gets to 2011, 2020, or 2030, that they will just not exercise that right, and let all resales go through..
JMHO.
I disagree, 30 years is a long time, so maybe in 2021 or so..
STILL, if you sell by 2011 or so, you COULD double your "investment" if you bought way back when in 1992-from $52 to $120 or so... Not a bad deal. You had 19 years of DVC vacations, and a profit... WOW! Better than my stocks are doing that is for sure!!! (but then again, who in their right mind would sell DVC?) LOL
DeerH

 

[DebbieB]

I remember when I bought in 1999, DVC's price was $65 and the ROFR was around $55, so it has really gone up.

 

[RobDoc]

Originally posted by deerh
So, I am asuming that for the next 20 years or so, the price will go up and up thanks to ROFR. So, I guess $125/pt does not seem impossible, esp if they build Eagle Pines say in 2007 or 2008, and IF they extend to 2054.... Interesting, a timeshare more than doubling in price..... I guess that is unheard of..........
DeerH

ROFR simply means that Disney will have first opportunity to purchase a resale on the same terms as the offered price. It does not mean that the price will continue to rise.

The current resale prices are being supported by ROFR and will do so as long as DVC continues to exercise ROFR by purchasing those resales below a determined price, but DVC can also allow the floor to drop whenever they choose.

I would anticipate continued price support while DVC is actively selling new resorts, at least for another few years. As mentioned above, at some point, the declining years remaining until 2042 will affect the resale value (and likely will affect Disney's interest in price support thru ROFR).

Stay Tuned!

 

[Dean]

It will go on forever or until 31 Jan, 2042 which ever comes first. That is unless there is an extension offered. DVC will only act on it as long as they're selling though. Don't think for a second they make any money on the buy backs themselves but they do encourage people to buy direct when the difference is so low and that is the purpose. As soon as there are no more sales, DVC will stop buying, if not before. After that the prices will drop but more likely just become more variable. Some will find real deals and others will not.

 

[Maistre Gracey]

Personally, I don't think a lack of ROFR will cause resale prices to plunge.
The high cost of the on-site Disney hotels will keep the price up. In other words, prices can not become super-duper low because there would be too much demand from people who want on-site accommodations.

-Just my opinion...

 

[Dean]

Originally posted by Maistre Gracey
Personally, I don't think a lack of ROFR will cause resale prices to plunge.
The high cost of the on-site Disney hotels will keep the price up. In other words, prices can not become super-duper low because there would be too much demand from people who want on-site accommodations.

-Just my opinion...

I've seen resales for $40 pp in the last year, without ROFR, someone would have gotten it for that. That's what I mean by variable. IMO, the prices are about 10-20% higher now simply because of the ROFR. That will evaporate almost immediatley but prices won't be dramatically lower to start. They will simply slowly come down over time.

 

[First Wave]

The way I look at it, if I stayed in one of their better Disney hotels for a week every year for $300 a night plus 12 % tax for ten years, I'd never get ANY of it back. If I own DVC for 10 or 15 years and sell my membership for half of what I paid, at least I've gotten something out of it. Not to mention that the rooms at the club resorts (which include a full kitchen and washers and dryers) are far superior to the standard hotel rooms.

Just a thought!

 

[PamOKW]

Interesting, a timeshare more than doubling in price

We're almost there already. The pre-construction price at OKW was $48 and the opening price was $51.