ROFR "theory" question

[Beca]

Hi,

First of all, thanks for reading this. I know people get REALLY tired of ROFR threads. I posted this on the ROFR thread, but since that one is so long, I think it got lost, and I really would like some opinions on this one.

I have a friend who got a "smokin'" contract. 200pt BCV Oct UY with 130 '03 points, 200 '04, and 200 '05, $86 . A REALLY great contract. He went to ROFR AFTER me (220pt, BCV Aug, no points 'til 06 $83). He heard back on his ROFR in less than 4 business days....seriously, it was submitted on a Wed, and he heard on Mon.

Mine is taking MUCH longer. I would think it was the "price per point" issue, but someone on the ROFR board recently paid $88 per point for a BCV contract with all '03-'05 points, and she had to wait three weeks to hear.

So, here's my question....why do some people get thru ROFR super fast, and others do not? There has got to be some sort of "criteria"....I don't think it is random. But, for the life of me...I cannot seem to figure this one out.

I would LOVE to hear any and all theories on this one.

Thank for your help!!!



Beca

 

[CapeCodFam]

Maybe stripped contracts coincide with future price increases.... After all, they can buy and hold until '06. (That assume's BCV from DVC might go above $89/point in 06..)

Just a guess...

 

[spiceycat]

maybe problems with the contract - the contract is not paid in full to Disney yet - or some of the stuff in the contract might be wrong - Disney insist that all contracts be correct.

the best way to find out is to call the person who are buying from (either the owner or the broker) and see if they can't find out what the delay is.

 

[CarolMN]

My "theory" is that there are several DVC people who review contracts for ROFR opportunities and that they divide the contracts among them as they come in.

Beca - Maybe your guy is on vacation (or maybe his supervisor is, LOL). Or maybe he's a slow reader. Or maybe he has almost reached his quota and is waiting for a better offer to top off his portfolio. Or maybe his calculator broke.

Seriously, hope you hear good news soon.

Best wishes -

 

[Beca]

Thanks for the quick replies. I really am not "stressing" about my contract (gosh, I hope i am not jinxing myself here!!), and I don't mean to "whine". I'm not upset that someone's contract went thru quickly and mine did not. Actually 15-19 days seems to be the norm right now.

I really am interested in "speculating" and "brainstorming" on what would make DVC pass one so quickly, and have them hold on an almost identical one for a while.

Here's what I know about ROFR. A committee meets once or twice a week (it seems, maybe Mon. and Thurs based on when people hear from their agents).

Here's what I don't know. How long does it take to get into "a meeting"? Based on how long it takes to hear, I assumed that DVC did some "back work" on the contract, and you got into a meeting 15-19 days after your contract was submitted.

Based on how quickly my friend heard, I'm not so sure this is true.

I'm just looking to:

1) Pool our info about what we know for sure concerning ROFR
2) Speculate on why some contracts pass quickly and some do not

Thanks again,


Beca

 

[LIFERBABE]

I have a friend who got a "smokin'" contract. 200pt BCV Oct UY with 130 '03 points, 200 '04, and 200 '05, $86 . A REALLY great contract. He went to ROFR AFTER me (220pt, BCV Aug, no points 'til 06 $83). He heard back on his ROFR in less than 4 business days....seriously, it was submitted on a Wed, and he heard on Mon.

I agree, there really is no difference in your contract vs. his in Disney's eyes.

Your price is high enough to pass ROFR as was his.

With an October UY on your friends contract, the only thing he picked up was the 130 2003 points and saved $3 ppt vs. buying from Disney (He still would have received 2004 points and 2005 points with a DVD purchase
), so I can see why his passed so quickly.

Maybe they have a "no-brainer" pile that the price is high enough that they don't even ponder over it, like your friends and his $3 a point difference and then a pile that needs to be "deliberated" over like yours with a $6 point difference. Maybe they have a cut-off, say $5 or more from their selling price of $89 gets deliberated and anything less gets passed.

I still believe that Disney doesnt care about banked or borrowed points unless it is a huge number of points (maybe 500 or more banked) because they can restore any contract.

That would be my theory and most likely the way I would do it if I had a stack of contracts to review. Your situation could be the difference of only a $1 that threw your contract into the review pile.

So I would say there is a "cut-off" of what goes to panel and what doesnt based on your friends situation.

 

[dizplanner]

I would also guess that the use year makes a difference - as in we have plenty of points in the Oct use year (or a small wait list) but we don't have any points in the Aug use year and a long wait list - this might change the "trigger" price for review. Also I think the total price is important, not the per point price. Did he pay maintenance fees for the 2003, 2004 and/or 2005 points? Did you? Did he pay closing costs, transfer fee? Did you? Add ALL the costs up, THEN divide by the number of points. Compare this number to your "need to review" number. Maybe the "need to review" number is the same for all use years and the review is to decide how much they really want that contract based on the wait lists.

Or maybe they just throw darts

 

[JimMIA]

I also mentioned something in response to Beca's earlier post which may affect ROFR.

There may be some things DVC simply cannot or will not do -- either because various agreements prohibit it, or because their own internal policies preclude it.

For example, if my memory serves me correctly, Beca's friend had a provision in the contract that they were going to reimburse the seller for the '05 dues on that 'smokin' contract she mentioned. It may be that DVC either a) CAN'T do that, or b) doesn't want to do that EVER, regardless of the price on the contract, because of the precedent it could set.

Just a theory, since we're talking theory here.

 

[Beca]

For example, if my memory serves me correctly, Beca's friend had a provision in the contract that they were going to reimburse the seller for the '05 dues on that 'smokin' contract she mentioned. It may be that DVC either a) CAN'T do that, or b) doesn't want to do that EVER, regardless of the price on the contract, because of the precedent it could set.

Just a theory, since we're talking theory here.

Actually, Jim....that is standard. I bet if you look at your OKW contract, you are reimbursing the seller for any unused '05 points.



Beca

 

[JimMIA]

Ooops, you are right...duh! How did I NOT notice that???

 

[JimMIA]

I would also guess that the use year makes a difference - as in we have plenty of points in the Oct use year (or a small wait list) but we don't have any points in the Aug use year and a long wait list - this might change the "trigger" price for review. Also I think the total price is important, not the per point price. Did he pay maintenance fees for the 2003, 2004 and/or 2005 points? Did you? Did he pay closing costs, transfer fee? Did you? Add ALL the costs up, THEN divide by the number of points. Compare this number to your "need to review" number. Maybe the "need to review" number is the same for all use years and the review is to decide how much they really want that contract based on the wait lists.

Or maybe they just throw darts

In addition to the price/wait list question, I'm sure there is also the issue of maintaining some relevance between the price DVC is currently selling new contracts for and the prices that are available via resale. They certainly do not want TOO large a disparity between those prices, so I am sure there are also prices with each property below which they simply will not allow contracts through.

An example would be a recent contracts ROFR'd at OKW for $65 and $69 pp. They were both stripped -- one had 15 2005 points and the other had nothing until '06 -- but DVC ROFR'd them both at the same time they were emailing members offering a big backlog of OKW points. You have to think that particular situation was more price-support driven than anything else.

Or...maybe they just throw darts.