DVC Right of First Refusal (ROFR): August ’17 Report13 Comments
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|
|Bay Lake Tower||3||21||14.3%|
|Old Key West||2||10||20.0%|