ROFR -how does disney evaluate

[badeacon]

Does Disney probably evaluate the closing cost added to cost per points in determining whether to take.
i was just talking to a broker on a resale which is much below average resale. i expressed concern that would not pass ROFR. I asked if i could offer higher price per point and have closing cost paid by seller to get price up close to average. Was told Disney looks at closing cost and probably would not affect ROFR.
Also does anyone know if the average prices for resales which are published include all the costs paid by buyer or just the price per point?

 

[_auroraborealis_]

ROFR is a black box. No one knows.

 

[The Jackal]

I think they put them in a hat and randomly draw a couple. There is no rhyme or reason. Not sure even DVC knows what they do and why?

 

[zavandor]

The general consensus is they put all contracts on a board and let a monkey throw darts at them. Those hit are the ROFRed contracts.

 

[disneynutz]

Pretty simple really, if it makes them enough money, they ROFR.

Bill

 

[miTnosnhoJ]

In the past, we might surmise that Use Year would be critical. If they had a buyer on tap who needed an August Use Year, they might ROFR an August contract at $150 per point, while passing on a December contract for $130 per point.

Now that they have declared that they can launder a ROFRed contract to have a different Use Year, this will probably change. But probably still a monkey with a dart. We might think that low-ball offers would be more vulnerable to the monkey, but this remains to be seen.

ALSO, the average prices that I have seen published are not the entire market. They are just that one broker, that tends to skew on the high side. If you look at the Orange County web site, you can get a better feel for the market. There is no perfect source. The OC Comptrollers website has all the transactions, but does not have information on stripped vs no stripped or closing costs. The ROFR thread here has a small subset of transactions, but has good information on points included and closing costs. The brokers list is a list of only that broker.

 

[KAT4DISNEY]

Anyone that tells you they know how the evaluate ROFR would either had to have been part of the process to know or else is simply making a best guess. Crazy prices you'd think were too low pass. High prices you're certain will pass do not. Ie - very few people actually know and they won't tell you.

 

[Lumpy1106]

Here's what I don't understand; if Disney doesn't exercise ROFR on resorts that are not sold out (and typically they don't), why is the resale price so high? I would think you could throw out a lowball offer on a Copper Creek contract and get a really good deal. Granted the seller could reject the offer, but nothing ventured nothing gained...

 

[KAT4DISNEY]

Here's what I don't understand; if Disney doesn't exercise ROFR on resorts that are not sold out (and typically they don't), why is the resale price so high? I would think you could throw out a lowball offer on a Copper Creek contract and get a really good deal. Granted the seller could reject the offer, but nothing ventured nothing gained...

Because the seller would have to agree. If someone is desperate enough they might accept but if they don't have to sell then they will sit and wait. ROFR does not control pricing. It may influence it some but it's still a contract between 2 parties that has to be agreed to by both parties.

 

[DisneyOutsider]

Here's what I don't understand; if Disney doesn't exercise ROFR on resorts that are not sold out (and typically they don't), why is the resale price so high? I would think you could throw out a lowball offer on a Copper Creek contract and get a really good deal. Granted the seller could reject the offer, but nothing ventured nothing gained...

If Disney isn't exercising ROFR, then the market sets the price on it's own. I can assure you that sellers receive low-ball offers with regularity across all resorts, and they are most often rejected. If you throw a low-ball offer at Copper Creek, chances are there are other buyers willing to beat that price.

 

[stewart715]

It really isn't that random. There are a few factors that can be unpredictable. One is, the number of points, available points and price. If it is a loaded contract at the right price, they will take it. It also depends on the needs. How long is the waitlist for that resort, for example? They will take what they need or think they will need at the right price. At that point, it can be random because there can be so many contracts that they don't need them all, so it seems random why some make it through and others don't. The other is to control the market. Part of the reason the resale prices are what they are is to try to stay at or above the ROFR price point. If tomorrow, ROFR was gone, the resale prices would plunge. This is why often seasoned buyers will offer $10-15-20 over asking if they know the price is too low and has no chance at making it through ROFR.

 

[striker1064]

It also depends on the needs. How long is the waitlist for that resort, for example?

This doesn't seem super correct to me. Waitlists have been closed for resorts like VGC and BCV in the past. You would think that means there are many more people wanting the resort than Disney can accommodate, and therefore they might ROFR all of them. They don't though.

 

[lovin'fl]

I think they have a monthly set $$ amount they can spend to ROFR. And they maybe have a list of needs and just aim to fill it when something catches their eye. Though something I have wondered is if they watch the resale brokers and when they see something they come in as a buyer using some name or another and then ROFR it. I feel like the contract I am selling (in ROFR right now) will get taken.

 

[crvetter]

This doesn't seem super correct to me. Waitlists have been closed for resorts like VGC and BCV in the past. You would think that means there are many more people wanting the resort than Disney can accommodate, and therefore they might ROFR all of them. They don't though.

I would assume the profit margin on BCV (before the last price increase) was too low for them to consider it. However, with the last price increase resale is still around 140-150 per point but the spread is ~85 point it now is worthwhile for them to buy. Post direct price increase you saw them taking some BCV and what we see posted on DIS is a small biased sample set of contracts sold. My guess is they purposefully don't ROFR BCV (and other resorts) because the market is pricing it in an area that isn't hurting their direct sales (no reason to prop it up) and by "closing" the waitlist makes those that want to go direct buy the active resort. Also every contract Disney buys means the price would increase marginally because people would bid a bit higher to get through (especially at small resorts this is more problematic) thus eating the profit margins.

As for VGC I have heard that Disney simply doesn't like to ROFR those because of it being a California Resort and makes it a bit more pricey and complicated than the streamlined process of the WDW and beach resorts (minus AUL) they have setup up.

 

[stewart715]

This doesn't seem super correct to me. Waitlists have been closed for resorts like VGC and BCV in the past. You would think that means there are many more people wanting the resort than Disney can accommodate, and therefore they might ROFR all of them. They don't though.

They have different reasons for closing waitlists at GCV and BCV. BCV is very small and they do allow waitlists for existing members and still do ROFR a fair amount of BCV contracts. I don't think they want a bunch of 75 point members at BCV.

As for the others, trust me, everyone who wants a direct contract gets one. They are ROFRing as much as they need to be.

 

[KAT4DISNEY]

It really isn't that random. There are a few factors that can be unpredictable. One is, the number of points, available points and price. If it is a loaded contract at the right price, they will take it. It also depends on the needs. How long is the waitlist for that resort, for example? They will take what they need or think they will need at the right price. At that point, it can be random because there can be so many contracts that they don't need them all, so it seems random why some make it through and others don't. The other is to control the market. Part of the reason the resale prices are what they are is to try to stay at or above the ROFR price point. If tomorrow, ROFR was gone, the resale prices would plunge. This is why often seasoned buyers will offer $10-15-20 over asking if they know the price is too low and has no chance at making it through ROFR.

Cetainly they have criteria. But they also do not have a fixed criteria that they take every contract that meets that criteria. Or if they do it's something that you might almost never see negotiated like they will take every BCV contract at $75/pt or less. Ie - you never know if they will take a contract or not.

 

[stewart715]

Cetainly they have criteria. But they also do not have a fixed criteria that they take every contract that meets that criteria. Or if they do it's something that you might almost never see negotiated like they will take every BCV contract at $75/pt or less. Ie - you never know if they will take a contract or not.

I guess what I was saying is - there is criteria but they simply don't need every single 'cheap' contract that comes through ROFR. As Direct demand increases, so will ROFR (as it has been with unprecedented ROFR being exercised in past few months).

 

[skippytx]

I haven't discerned a pattern at all. Sometimes they pass lower offers on fully loaded contracts, then turn around and take stripped contracts at above market prices. It doesn't really make sense and it'll just make you crazy trying to do so.

Beach Club and Bay Lake are two hot properties right now. I ran some numbers about 6 weeks ago and Disney was taking almost 50% of the BLT contracts that changed hands (47% exactly). Beach Club so far this year has ROFR'd 72 out of 153 contracts. At Saratoga surprisingly they've ROFR'd (or taken back somehow ie foreclosure) 232 out of 679 contracts that changed hands this year. They've also sold 357 direct SSR contracts so far this year, the largest being 300 points. So there are a lot of people out there buying direct from DVC even for SSR.

 

[gharter]

I think that is the question that everyone would like to know the answer.
When we were looking ar purchasing our 2 contracts, I saw similar contracts to ours at higher and lower prices taken, and others that passed ROFR. just a guess, but I suspect it really either comes down to DVC having people who are looking for certain contracts or prices that are just too low for DVC not to buy and resell.
But sometimes, i see contracts that pass and others that are taken that make no sense to me, but I'm sure they have a reason for what they do.