ROFR - explain, please

[kellyb2000]

Hi

I just recently started looking into resales and am still trying to "get" all this. I don't know if I understand Disney's ROFR. This is what I have gathered - 2 parties can agree on any kind of price they want but Disney can refuse the sale if they don't like it? Is that right? Does this happen often? I guess what I really want to know is do places that sale resales (like The Timeshare Store) let sellers put a price on their points that they think could be denied? Or is it so vague that you can't even guess whether it will be approved or not?

Thanks for any clarification


Edited to add:
Now I've read other posts and got this - does Disney buy the seller's point after they've refused the sale and then they (being Disney) sell them?

 

[DVCconvert]

All DVC ownership contracts have a clause that gives Disney the right to always have the first opportunity to purchase back any contract which is being re-sold. So once a buyer and a seller agree to terms & price, the broker contacts DVC, gives them the details and a Disney review board decides if Disney will exercise it's right and buy the ownership interest back directly from the seller - thereby closing out of the deal the would be buyer.

A good broker will have some idea of what will, or will not "fly" with Disney - and should advise a buyer if they think Disney would step in to buy a contract if the offer price is too low.


InRe you edit - this is how Disney 'restocks' their inventory of resales in the resorts that have previously sold out.

 

[tjkraz]

This Right Of First Refusal clause keeps resales from changing hands at very low rates (say, $50 per point) while DVC is still trying to sell points for $95 each.

If a contract comes through with an abnormally low selling price, DVC will exercise ROFR and take the contract themselves at the agreed-upon terms.

They can then sell those points to current DVC members looking for an add-on at $89 per point.

One clause that particularly works in DVC's favor is the fact that owners cannot subdivide a contract, while Disney can. Someone who purchased a single 600 pt contract must sell those entire 600 points as a block. However, if DVC were to pick-up the contract via ROFR, they could then divide the points and sell them off in whatever unit the buyer is looking for.

 

[tamu91]

well put DVCconvert. Not much to add other than to say I haven't read about a Contract that did not pass ROFR in quite some time.
I guess Disney is busy promoting SSR and as long as the price per point is not below what Disney has in mind, I'm guessing it's in the $66-$67 neighborhood, they have been allowing the sales to go through.
BTW, when I put an offered in for my contract @ $68/pt, my Disney guide told me very clearly that my offer would not pass ROFR because it was too low in his opinion. Well, I passed and the rest is history. Your resale agent should be able to give you some guidance on how much to offer.
Good luck

 

[RuthnPaul]

Originally posted by tamu91
Not much to add other than to say I haven't read about a Contract that did not pass ROFR in quite some time. I guess Disney is busy promoting SSR and as long as the price per point is not below what Disney has in mind

Someone posted this morning that Disney exercised ROFR on their OKW contract at $67 per point just yesterday. From what several others have posted, effective immediately, Disney is going to start charging $89 per point for sold-out resorts and they are also implementing a wait-list for people wanting to purchase add-ons (this came from their guides). Things may be a changing which is unfortunate since we're trying to get a VWL contract through ROFR!!

 

[Mike]

Originally posted by RuthnPaul
Someone posted this morning that Disney exercised ROFR on their OKW contract at $67 per point just yesterday. From what several others have posted, effective immediately, Disney is going to start charging $89 per point for sold-out resorts and they are also implementing a wait-list for people wanting to purchase add-ons (this came from their guides). Things may be a changing which is unfortunate since we're trying to get a VWL contract through ROFR!!

I agree - looks like things are changing and DVC will be pushing the price of resales up with their $5 increase and by exercising ROFR accordingly.

 

[kellyb2000]

So the sellers can't lose then, right? Because if they were willing to sell at say $68/point, they are going to get that price either from an individual or from Disney and Disney certainly doesn't lose because they can buy back for $68/point and then turn around and sell it at $89/point.

Can anyone buy the points that Disney has "bought back" or do you have to be a current DVC member? (do you call these "add-ons?)

Also, can I ask one more question that is off topic but just so I don't have to start another thread, how do you pay for your maintence fees? Do you get a bill every month? every year? Is that bill straight from Disney?

Thanks, again!

 

[tjkraz]

Originally posted by Mike
I agree - looks like things are changing and DVC will be pushing the price of resales up with their $5 increase and by exercising ROFR accordingly.

Time will tell what impact it has on the price of resales.

First, DVC needs to establish a demand for the points at their new price of $89. If the higher price ends up lowering demand, ROFR at $67 per point may not last long.

Could be they are just testing the waters, or trying to stockpile a few points to meet current waitlist needs. But it will certainly take a bit longer before any real pattern emerges.

 

[Mike]

Originally posted by kellyb2000
So the sellers can't lose then, right? Because if they were willing to sell at say $68/point, they are going to get that price either from an individual or from Disney and Disney certainly doesn't lose because they can buy back for $68/point and then turn around and sell it at $89/point.

Can anyone buy the points that Disney has "bought back" or do you have to be a current DVC member? (do you call these "add-ons?)

Also, can I ask one more question that is off topic but just so I don't have to start another thread, how do you pay for your maintence fees? Do you get a bill every month? every year? Is that bill straight from Disney?

Thanks, again!

Right the sellers don't lose - they still get what they agreed to sell for. In fact they probably make out since the sale moves much faster if Disney buys the contract.

Anyone can buy the points from Disney but if you are not a DVC owner you have to buy at least 150 points.

Maintenance fees can be either paid in full in January or deducted monthly from your bank account.

 

[DVCconvert]

Because if they were willing to sell at say $68/point, they are going to get that price either from an individual or from Disney and Disney certainly doesn't lose because they can buy back for $68/point and then turn around and sell it at $89/point.

correct

Can anyone buy the points that Disney has "bought back"

So long as Disney is selling them yes

how do you pay for your maintence fees?

You can either have Disney auto deduct a monthly amount from your bank account, or you can pay a lump sum by check or credit card. If you pay lump sum, and have a Disney Visa, you can also get the reward dollars for charging your dues payment with it.

 

[tjkraz]

Originally posted by kellyb2000
Can anyone buy the points that Disney has "bought back" or do you have to be a current DVC member? (do you call these "add-ons?)

DVC isn't actively marketing the sold-out resorts, but if you call and tell them that the ONLY resort you want is BCV (or BWV, OKW, etc) then they will probably agree to sell you a brand new contract at the going rate.

Just be aware that this is a really expensive way to go. You're talking about paying $89 to DVC for a contract you could probably get for $70-75 on the resale market.

The only compelling reasons to go through DVC would be the ease of purchase and their ability to finance. Just be aware that on a 150 point contract, you're immediately costing yourself $2000+ more than you would pay on the resale market.

 

[kellyb2000]

Y'all are just a wealth of information! Thanks so much - you have cleared my mind up A LOT!!!

 

[mydogdrew]

File under full disclosure. While I generally agree that resale is the way to go it can work out better with Disney (depending on how many banked resale points are involved). Consider a Dec UY purchased through Disney today at BWV for example. You get get full 2003 and 2004 points and pay only 4/12 of the 2004 dues. If you rent the points with no dues ( say 250 of 300 points available on a 150 point contract), you are now down to the mid-$60's for a net purchase price without giving up any points you paid dues on and no closing costs. In addition, you can take advantage of Disney financing and quick close. Keep in mind, this assumes that this contract is available! I have had success with fully loaded resale contracts where you can do even better but they are hard to find and more work to close.

 

[disneyberry]

<font face="times" size="+0">I just read about someone who lost their BWV contract at $73.25/pt but the Seller was paying closing costs.
I think in that case, the big flag for Disney was the Seller paying closing costs, so they snatched it up so they can turn it around and sell it themselves for the new $89/pt price. IMO, to get past ROFR, it's best to have the Buyer pay closing costs. HTH.</font>

 

[kellyb2000]

DVC isn't actively marketing the sold-out resorts, but if you call and tell them that the ONLY resort you want is BCV (or BWV, OKW, etc) then they will probably agree to sell you a brand new contract at the going rate.

Going rate being $89/point or $95/point for the sold out resorts?

 

[Mike]

Originally posted by kellyb2000
Going rate being $89/point or $95/point for the sold out resorts?

$89 for the sold out resorts

$95 for SSR

 

[CarolMN]

Originally posted by kellyb2000
Going rate being $89/point or $95/point for the sold out resorts?

$89