Timeshare Broker Selling DVC Really Low

[BWV Dreamin]

There is nothing legally or ethically wrong with selling below market that I am aware of, esp with timeshares. If there were, I likely would only own one or two. But is is dumb to do so both for the seller and the agent as they are leaving money on the table since most brokers charge a % of the sale price. Having said that, many brokers are not well familiar with DVC (though that's changing) and may simply not know better. Or it could be that this is an attempt to sell really quickly and it will likely get ROFRed. It could even be set up this way on purpose. Hopefully the broker will tell the prospective buyer and have already informed the seller of the situation. It's also possible they plan to list low then tell the buyer about ROFR to try to get them to increase their bid. Lastly, it's possibly it's a scam though not likely.

I can see this, but on 3 contracts? Could this be the start of a trickle down affect stemming from the housing crisis?
Now, I hadn't considered the low offer so as to "bid up" the price, similar to what auctioners do. In a hot market, I could see that. I don't know about it at this time considering the state of the economy.

 

[DebbieB]

There is nothing legally or ethically wrong with selling below market that I am aware of, esp with timeshares. If there were, I likely would only own one or two. But is is dumb to do so both for the seller and the agent as they are leaving money on the table since most brokers charge a % of the sale price. Having said that, many brokers are not well familiar with DVC (though that's changing) and may simply not know better. Or it could be that this is an attempt to sell really quickly and it will likely get ROFRed. It could even be set up this way on purpose. Hopefully the broker will tell the prospective buyer and have already informed the seller of the situation. It's also possible they plan to list low then tell the buyer about ROFR to try to get them to increase their bid. Lastly, it's possibly it's a scam though not likely.

That's what I don't understand - why leave money on the table? I could see posting it for $55 and maybe negotiating down to $50 but why start at $45?

 

[ZekeKelso]

That's what I don't understand - why leave money on the table? I could see posting it for $55 and maybe negotiating down to $50 but why start at $45?

Here's a couple scenarios - nasty divorce or an institution (bank/trust/etc.) taking control of the DVC contract and needing to get rid of it as fast as possible. To the institution, an extra $500-1500 is pocket change compared to the hassle of paying monthly maintenance fees and mortgage payments, not to mention the black eye a timeshare might be on a balance sheet.

 

[crisi]

Here's a couple scenarios - nasty divorce or an institution (bank/trust/etc.) taking control of the DVC contract and needing to get rid of it as fast as possible. To the institution, an extra $500-1500 is pocket change compared to the hassle of paying monthly maintenance fees and mortgage payments, not to mention the black eye a timeshare might be on a balance sheet.

Or fire sale due to the health of the owner. Or just the owners own financial status. If selling the contract NOW will let them pay the mortgage THIS MONTH and for a few more months, leaving money on the table may be worthwhile may be better than being foreclosed on.

 

[CarolA]

My theory has always been that if I HAD to sell I would just "fire sale" my points at some REALLY low price assuming someone would PICK them up. As a seller I don't care who actually sends me money, a buyer or Disney.... it's all cash LOL!

 

[BWV Dreamin]

My theory has always been that if I HAD to sell I would just "fire sale" my points at some REALLY low price assuming someone would PICK them up. As a seller I don't care who actually sends me money, a buyer or Disney.... it's all cash LOL!

Ok, so lets say someone bites on this really low offer. It gets ROFR'd at $45/pt. Does Disney only compensate the seller at that price, or do they pay them the Disney buy back price (which I think is at $53/pt.)? Also, who pays closing if Disney ROFR's?

 

[salmoneous]

Does Disney only compensate the seller at that price, or do they pay them the Disney buy back price (which I think is at $53/pt.)?

I don't think any of us know that Disney will buy back VB points for $53. If they did, I'd agree that this sale doesn't make a lot of sense.

 

[LisaS]

Ok, so lets say someone bites on this really low offer. It gets ROFR'd at $45/pt. Does Disney only compensate the seller at that price, or do they pay them the Disney buy back price (which I think is at $53/pt.)? Also, who pays closing if Disney ROFR's?

The only change is that Disney steps in in place of the original purchaser. The price is whatever was agreed to between the original buyer and the seller.

Disney does not routinely buy back contracts. There have been reports here where people asked if Disney would buy back their contract and Disney was not interested. The only reports I can remember where Disney was interested were BCV contracts and the price they offered was around $55, far below what an owner could get on the resale market.

 

[BWV Dreamin]

The only change is that Disney steps in in place of the original purchaser. The price is whatever was agreed to between the original buyer and the seller.

Disney does not routinely buy back contracts. There have been reports here where people asked if Disney would buy back their contract and Disney was not interested. The only reports I can remember where Disney was interested were BCV contracts and the price they offered was around $55, far below what an owner could get on the resale market.

Interesting. So then Disney's buy back price,if they so choose to do so, is resort dependent? They have refused to buy back resorts? Well, if they don't buy back some resorts, and don't rofr low offers, does that send a message to potential buyers of these resorts that Disney will not protect your investment?

 

[CarolA]

Ok, so lets say someone bites on this really low offer. It gets ROFR'd at $45/pt. Does Disney only compensate the seller at that price, or do they pay them the Disney buy back price (which I think is at $53/pt.)? Also, who pays closing if Disney ROFR's?

Disney pays the seller what the contract was for. So if I sold at $45 with buyer to pay closing then that's what Disney does!

As I said, I would only do this if I was desperate, but the truth is I think that as I get close to the end of my contract it will be common to DUMP for next to nothing. If I have five years left and my health fails then I will give it to someone who takes over MF for example....

 

[BWV Dreamin]

I wonder how this scenario might cross over to other, older resorts, or those that don't extend (ie; OKW)?

 

[LisaS]

Interesting. So then Disney's buy back price,if they so choose to do so, is resort dependent? They have refused to buy back resorts?

I assume the reason they have been willing to buy back BCV contracts is because they have a long waiting list for points there. If they can buy back points for $55/pt and resell them immediately for over $100/pt, they make some quick money and satisfy the demands for some of the members looking to add on at BCV. The waiting list for add-ons at other resorts isn't as long and they seem to be able to meet it just with the contracts that get bought back via ROFR or foreclosures so there is little reason for Disney to offer to buy back contracts at any other resorts.

Well, if they don't buy back some resorts, and don't rofr low offers, does that send a message to potential buyers of these resorts that Disney will not protect your investment?

For as long as I've been hanging out here at the DVC boards there have always been different ROFR levels for different resorts (much lower for VB than for BCV for example) so supply and demand plays a big role.

 

[Goofy2937]

I don't think it's always about supply and demand, DVC also wants to protect the investment by exercising ROFR on undervalued resales. Below is a list copied from another thresd of recent contracts that DVC bought back through ROFR.


ROFR'D - BCV:
spsmyk------------- 130 BCV (Apr) $85, no '07 pts, buyer pays closing (updated 6/25, ROFR'D 7/3/07)


ROFR'D - BWV:
mla973 -------------- 50 BWV (Apr) $80, no ‘06 pts & all ‘07 pts, buyer pays closing (sub 3/12, ROFR 3/22) – non-member
MJToast ------------- 200 BWV (Feb) $75, No pts until ‘09, buyer pays closing costs, seller pays ‘08 MF (sub 3/30, ROFR 4/11) - non-member
grumpynomore-------- 170 BWV (???) $82, buyer & seller split closing (ROFR 7/20)
mommacat56--------- 180 BWV (Feb) $79, no '08 pts, buyer & seller split closing, seller pays '08 mf (ROFR 2008)



ROFR'D - HHI:
lmb -------------- 150 HHI (???) $66, 30 ’07 pts, buyer pays closing and prorated ’07 MF (sub ???, ROFR 3/01?) – assumed non-member
WalterS (seller) --- 200 HHI (Apr) $68
lisalefebvre ------- 250 HHI (???) $66
Tamar (seller)----- 150 HHI (Dec) $67, 27 '07 pts, all '08 pts, buyer pays closing, seller pays '07 mf (ROFR 9/20)

ROFR'D - OKW - original:
Michael623------------- 160 OKW (Feb) $70, 20 '08 pts, all 08 pts, buyer pays closing, buyer pays '08 mf for 20 pts (sub 8/16, ROFR 8/29)

ROFR'D - OKW - extended:


ROFR'D - SSR:
billyb1 (seller) ----- 210 SSR (Jun) $82, 202 '07points, 59 '06 banked, Buyer paid prorated MF for 07 points (202/210) (sub 2/28,ROFR 3/8)
mikeandkarla ------ 160 SSR (Dec) $82, 45 ‘05 pts banked, 160 ‘06 pts & 160 ‘07 pts, buyer pays closing & ’07 MF (sub 3/10, ROFR 3/22) – member
DisDreamerKJ ------ 150 SSR (Dec) $82, 150 ’06 pts & 150 ’07 pts, buyer pays closing and ’07 MF (sub 3/13, ROFR 3/22) non-member
Amy5000 ---------- 100 SSR (Feb) $82, no pts until ’08, buyer pays closing and ’08 MF (sub 3/23, ROFR 4/3) – non-member
Coach81 ----------- 150 SSR (Feb) $80, six ‘07 pts & all ’08 pts, buyer pays closing & MF on remaining '06 points (6pts), seller to pay rest (sub 3/23, ROFR 4/4) - non-member
Crazed Pluto ------- 150 SSR (Aug) $83, 47 '06 pts, 185 '07 pts, buyer plays closing fees, seller pays '07 dues - non-member
VTNuke------------- 120 SSR (Feb) $79, 0 '07 pts, all '08 pts, buyer pays closing, seller pays '07 MF (sub 6/16)
dbprimeaux--------- 260 SSR (Feb) $81
MEK---------------- 200 SSR (Mar) $80, all '08 pts, seller pays '07 mf (sub 9/8) - Non-member (ROFR 9/21)
kkmauch (seller)---- 150 SSR (Jun) $77, 24 '08 pts, buyer pays closing (ROFR 4/24/08)


ROFR'D - VB:


ROFR'D - VWL:
WDWguruDH (seller) --- 150 VWL (Sep) $82, 104 banked ’07 & all ’08 pts, buyer pays closing and ’07 MF (sub ???, ROFR 3/23) – member
soonertxmickey-------- 240 VWL (Apr) $78, no '07 pts, all '08 pts, seller pays closing
Maistre Gracey (seller) - 450 VWL (Sep) $75, 410 '07 pts, buyer pays closing, buyer pays mf on 410 '07 pts
luvindisneyworld(seller) - 140 VWL (Apr) $75 (sub 3/5, ROFR'D 3/19)
Frankiesmom----------- 150 VWL (Jun) $84, 126 '07 pts, all '08 pts, buyer pays closing and '08 mf (ROFR'D 4/24/08)
GrumpyBa*D----------- 250 VWL (Aug) $72, 72 '08 pts, all '09 pts, buyer and seller split '08 mf (sub 4/21, ROFR'D 4/29)


****WAITING****

 

[Dean]

Interesting. So then Disney's buy back price,if they so choose to do so, is resort dependent? They have refused to buy back resorts? Well, if they don't buy back some resorts, and don't rofr low offers, does that send a message to potential buyers of these resorts that Disney will not protect your investment?

Disney's goal is to protect their investment and to drive a certain % of owners to retail that otherwise might do resale. While there is some vicarious protection of the owners, there is not Disney intent on doing so. ROFR can set the sale price which it has done at times in the past while at others times the usual sale price for most resorts has been above the ROFR price. It will vary by resort and there are FEW examples where DVC has ever agreed to buy back and in every case by one, it was a low ball offer well below the ROFR price. The only exception I am aware of is my own where DVC offered to buy it back and make me whole due in large part to incorrect information given by the sales guide, and that's even though I was likely one of the first, if not the first resale.

DVC will make little money on ROFR contracts, esp when you consider they're competing with themselves for their developer inventory.

 

[BWV Dreamin]

I would like to just take a moment to express my appreciation for such due diligence and professionalism with Jason of TSS. Per this discussion, Jason has resurrected my contract from the file dungeon at TSS, and I indeed did sign a waiver of representation. Again, what a thorough and professional agency, that even through a discussion forum would take time out for customer satisfaction. And your thoughts have been greatly appreciated in this thread!

 

[mickeyfan0805]

I would like to just take a moment to express my appreciation for such due diligence and professionalism with Jason of TSS. Per this discussion, Jason has resurrected my contract from the file dungeon at TSS, and I indeed did sign a waiver of representation, although the form was not exactly as posted. Again, what a thorough and professional agency, that even through a discussion forum would take time out for customer satisfaction. And your thoughts have been greatly appreciated in this thread!

Thanks for the update. Glad it got cleared up for you. I'm feeling pretty good about the fact that we're using them ourselves.