Rofr

[vinnie_a72]

My wife and I are looking to buy resale. At this point we only need 100 points. we do want a good deal on our resale purchase. What is generally the cut off when ROFR will buy the contract instead letting me become a member. Are thier any fees that have to be paid up front prior to ROFR reviewing the deaL.
vince

 

[drusba]

It is hard to find 100 point resales since Disney sells to new buyers at a minimum of 150 points; lower point resales consist of sellers who are selling second add-on contracts that they purchased. It is also hard to get one below anything that would be Disney's low threshold for exercise of ROFR because: (a) 100 point resales usually attract more than one buyer to the bidding; (b) sellers when going through a resale agent usually will not sell low because they lose money on the commission. Though the resale agent takes a percent of the sale, in timeshare sales there is usually a set minimum commission that the agent charges and he gets that minimum if the percent commission is lower than that minimum; the minimum commission tends to make it prohibitive for the seller to cut price when selling only 100 points or less. The latter problem for the seller is avoided if not going through an agent. Disney's threshold has been mentioned to be in the low 80's per point lately. The one thing you do not want to insist on is both very low price and seller pay closing costs. You will likely incur closing costs as the buyer anywhere from $350 to $500. If you make seller take the closing costs, Disney can exersise ROFR without having to pay them. In other words, with a very low price and seller paying closing costs you will be giving a written invitation to Disney to take it. Also, below threshold price contracts that usually avoid ROFR are ones in "point distress" where the seller has already used this year's points and often borrowed and used many or all of next year's. There are no fees to discover whether ROFR will be excercised, but you will have to have a signed contract for the sale which is likely to require you to put up a deposit.

 

[LisaS]

In case you have not already found it, this post is used to track which resales are making it through ROFR and which are not: http://www.disboards.com/showthread.php?t=720134

It will give you some idea what you have to pay to get past ROFR. The price target differs from one resort to the next with BCV being the most expensive. This is a very long thread so just go the the last page since the data table is reposted quite frequently with the latest info provided by those going through the resale process.

A couple of other things: smaller contracts, particularly those in the 50-75 point range, will cost more per point than larger contracts. The buyer can ask for (and get) more because of supply and demand -- many people want to get into DVC with fewer than the minimum 150 points that Disney requires so those contracts go for a premium. Also, Disney has been agressively buying up small contracts, presumably to keep people from doing exactly that, so a buyer will need to pay a premium price just to get through ROFR on a very small contract. You are looking to purchase 100 points so you won't have to pay quite as much but again, anything smaller than 150 points is likely to be a little pricier per point just because there aren't that many small contracts available on the resale market.

Also look carefully at the details of each contract. Some are "loaded" with banked points from the previous Use Year, all current UY points and all of the next UY's points. Other contracts are "stripped": no banked or current points and some/all of the next UY's points have been used, too. Most contracts are somewhere in between. The price/point will vary based on how many points the buyer is getting.

So take a look at the data and you will get a sense of what price you will have to pay to pass ROFR. But when it comes to making an offer on a contract, don't try to cut it too close to try to get a great deal. You might be thrilled that you talked the buyer down by $2/point and then lose the contract to Disney in your quest to save $200. Yes you will get your deposit back and be out no money other than the Fed Ex fees you paid to overnight your paperwork, but you will waste about 6 weeks of your time, only to have to start all over again, looking for another 100-point contract.

Good luck!