DVC Right of First Refusal (ROFR): August ’17 Report
In the month of August, Disney exercised their right of first refusal (ROFR) on 21 of 227 contracts sold through the DVC Resale Market, representing 9.3% of the contracts sold. This raises the year-to-date (YTD) buyback rate to 7.8%. In August, the buyback rate increased nearly 300% month to month, going from a rate of 2.4% in July to 9.3% in August. In August, 90.7% of contracts were waived by Disney, lowering the YTD waiver rate to 92.2%.
The month of August saw the highest buyback rate since February of this year. Additionally, August was the first month in 2017 in which the average resale price increased and the buyback rate did not behave inversely. Typically, every month resale prices have increased, the buy rate has decreased. However, in August despite the average resale price increasing from approximately $101/pt. to $104/pt., the buy rate increased. Perhaps this could be signally a potential future price increase from Disney or perhaps it’s a result of approaching the end of the fiscal year (September 30th) with additional funds for buying back inventory.
In August, as DVC resale prices rose, the buy rate dramatically increased, which was a complete reversal from every month thus far in 2017. This relationship between price per point and buyback rate is shown in the graph below:
What is Right of First Refusal?
For those new to the concept of Right of First Refusal, it is the option Disney Vacation Club has to purchase any resale contract after a sales price has been agreed upon, and the contract has been executed. Each contract must be forwarded to DVC for review.
DVC may take up to 30 days to review the contract. At their discretion, Disney may step in and purchase the property themselves at the terms agreed upon by the Seller and original Buyer. DVC then becomes the Buyer, and the purchase is complete. Once DVC is the buyer there is not an opportunity to come back with a better offer in hopes of still purchasing the contract.
Disney Vacation Club Resort Contracts Bought Back in 2017
Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold through the DVC Resale Market year-to-date through August of 2017:
Details Data on DVC Buybacks
In August, 6 resorts saw buy backs. Of the 6 resorts bought back in August, 4 of them are among the most commonly bought back: Saratoga Springs, Old Key West, Bay Lake Tower and Animal Kingdom. For details on those contracts that were acquired back, please see the table below:
| Resort | $/Point | Pts. on Contract | Price | Closing Costs Paid by | ’17 Dues Paid by | Use Year | Point Availability |
| Animal Kingdom | $91 | 220 | $20,020 | Buyer | Buyer | Dec | 440 pts.’17 + 220 pts.’18 |
| Animal Kingdom | $88 | 200 | $17,600 | Buyer | Seller | Dec | 0 pts.’17 + 200 pts.’18 |
| Animal Kingdom | $95 | 200 | $19,000 | Buyer | Pro-Rate | Dec | 165 pts.’17 + 200 pts.’18 |
| Animal Kingdom | $95 | 110 | $10,450 | Buyer | Seller | Sep | 25 pts.’17 + 85 pts.’18 |
| Bay Lake Tower | $110 | 160 | $17,600 | Buyer | Seller | Feb | 0 pts.’17 + 12 pts.’18 |
| Bay Lake Tower | $110 | 160 | $17,600 | Buyer | Seller | Feb | 0 pts.’17 + 0 pts.’18 |
| Bay Lake Tower | $115 | 200 | $23,000 | Buyer | Buyer | Aug | 340 pts.’17 + 85 pts.’18 |
| Boulder Ridge | $88 | 100 | $8,800 | Buyer | Seller | Mar | 0 pts.’17 + 100 pts.’18 |
| Boulder Ridge | $87 | 400 | $34,800 | Buyer | Buyer | Aug | 800 pts.’17 + 400 pts.’18 |
| Old Key West | $76 | 230 | $17,480 | Buyer | Seller | Dec | 4 pts.’17 + 230 pts.’18 |
| Old Key West | $75 | 200 | $15,000 | Buyer | Seller | Feb | 0 pts.’17 + 200 pts.’18 |
| Saratoga Springs | $87 | 160 | $13,920 | Buyer | Seller | Feb | 26 pts.’17 + 184 pts.’18 |
| Saratoga Springs | $90 | 250 | $22,500 | Buyer | Seller | Mar | 115 pts.’17 + 250 pts.’18 |
| Saratoga Springs | $79 | 150 | $11,850 | Buyer | Seller | Feb | 0 pts.’17 + 0 pts.’18 |
| Saratoga Springs | $87 | 150 | $13,050 | Buyer | Seller | Feb | 0 pts.’17 + 150 pts.’18 |
| Saratoga Springs | $88 | 200 | $17,600 | Buyer | Pro-Rate | Mar | 104 pts.’17 + 200 pts.’18 |
| Saratoga Springs | $89 | 150 | $13,350 | Buyer | Pro-Rate | Sep | 88 pts.’17 + 150 pts.’18 |
| Saratoga Springs | $90 | 110 | $9,900 | Buyer | Seller | Mar | 0 pts.’17 + 110 pts.’18 |
| Saratoga Springs | $85 | 175 | $14,875 | Buyer | Pro-Rate | Sep | 127 pts.’17 + 175 pts.’19 |
| Saratoga Springs | $85 | 200 | $17,000 | Buyer | Buyer | Sep | 200 pts.’17 + 200 pts.’18 |
| Vero Beach | $60 | 200 | $12,000 | Buyer | Pro-Rate | Jun | 84 pts.’17 + 200 pts.’18 |
Buy Back Rates for Disney Vacation Club Resorts
There were 6 different DVC resorts bought back in August for contracts sold by DVC Resale Market. The table below shows the percentage of buybacks for those 6 resorts:
| Resort | Buy Backs | Number Sold | Percentage Bought Back |
| Animal Kingdom | 4 | 46 | 8.7% |
| Bay Lake Tower | 3 | 21 | 14.3% |
| Boulder Ridge | 2 | 11 | 18.2% |
| Old Key West | 2 | 10 | 20.0% |
| Saratoga Springs | 9 | 47 | 19.1% |
| Vero Beach | 1 | 5 | 20.0% |
Comments
Is it possible to see the contracts they didn’t buy? I want to see what they considered reasonable bids. Thanks.
Robert, great question. While we do not have a complete list to share, certainly if there is a particular resort and point size you are interested in we can talk you through recent comparable sales over the phone. Generally, right now many listings are selling for close to asking price given it is a seller’s market with very limited inventory (over 90% of listings selling in under 7 days). For example, there were over 1,300 listings in January, now there are less than 400.
I am a current DVC owner with 2 December contracts at the Boardwalk.
If I bought another aftermarket contract what would happen should l need to use some of those points to complete a reservation?
Just say it’s half the points are aftermarket,how would / could this affect the reservation?
Thanks
Ed,
Thank you for your question. You can use resale points with direct points for reservations at any of the 14 DVC Resorts or World Collection (RCI).
Is there detail on when the buyback’s occur? Meaning is Disney more likely to execute ROFR earlier vs later in the month?
Clay,
Great question. To date we have never seen a correlation with the time of the month in regards to buybacks.
Nick
Can I add my children’s name to my deeds? Yes they are adults.
Thanks
Joe, yes, as long as they are 18 or older and there are no liens (i.e., loan on contract has been paid off if ever taken out).
I’m already a DVC Member looking to buy more points at resale. I read that I would not get the extra member perks if I bought points this way, but how does that work if one is already a member? Thanks.
Julie, if you have a contract bought direct or a resale contract bought prior to 4/4/2016 then you would be unaffected. For more details, please see: https://www.dvcresalemarket.com/blog/less-incidental-benefits-for-new-dvc-resale-members-but-how-much-do-these-incidentals-matter-2/
I’m confused about ROFR when I want to add someone’s name to my deed. I understand all of the paperwork that’s legally necessary but adding someone’s name shouldn’t been such a big hassle when it’s someone who’s been with me every time I’ve visited. I’m confused about the possibility of losing my contract.
PatKC, if it is a gratuitous transfer or just adding a name it does not have to go through ROFR.
Thank you for the information.