DVC Right of First Refusal (ROFR): February ’18 Report27 Comments
In the month of February, Disney exercised their right of first refusal (ROFR) on 13 of 233 Disney Vacation Club (DVC) contracts sold through the DVC Resale Market, representing 5.6% of the contracts sold. The waiver rate for February was 94.4%.
February showed a small increase in buyback rate when compared to January’s rate of 3.6%. Overall, February raised the year-to-date buyback rate to 4.5%, which is still lower than the 6.9% for 2017 and very much in line with the 4.4% for 2016.
The chart below shows the relationship between the average selling price per point and the buyback rate from February 2017 through February 2018. Generally, as price has risen, the buyback rate has declined and vice versa. This correlation continued in February as the average resale price dropped slightly from $113/pt. to $112/pt., the buyback rate rose 2 percentage points.
What is Right of First Refusal?
For those new to the concept of Right of First Refusal, it is the option Disney Vacation Club has to purchase any resale contract after a sales price has been agreed upon, and the contract has been executed. Each contract must be forwarded to DVC for review.
DVC may take up to 30 days to review the contract. At their discretion, Disney may step in and purchase the property themselves at the terms agreed upon by the Seller and original Buyer. DVC then becomes the Buyer, and the purchase is complete. Once DVC is the buyer there is not an opportunity to come back with a better offer in hopes of still purchasing the contract.
Disney Vacation Club Resort Contracts Bought Back in 2018
Three resorts continue to lead the way for 2018: Animal Kingdom, Old Key West and Saratoga Springs. Notably, other resorts such as Bay Lake Tower and Boardwalk, that have been historically popular for buybacks that have not had any thus far in 2018.
Please refer to the graph below for the total amount of buybacks at each DVC resort for contracts sold by DVC Resale Market through the month of February in 2018:
Details on DVC Buybacks
In February, DVC Resale Market had buybacks of Animal Kingdom, Old Key West and Saratoga Springs. Old Key West and Saratoga Springs led the way with 5 buybacks each. Additionally, the proportion of Old Key West buybacks was by far the highest. While Animal Kingdom and Saratoga Springs had a similar number of buybacks to Old Key West, the proportions were quite different due to the volume of each resort sold. Roughly around 10% of the Animal Kingdom and Saratoga Springs contracts were bought back, while nearly 24% of the Old Key West contracts were bought back.
Details on the contracts bought back in February are below:
|Resort||$/Point||Pts. on Contract||Price||Closing Costs Paid by||’18 Dues Paid by||Use Year||Point Availability|
|Animal Kingdom||$105||160||$16,800||Buyer||Pro-Rate||Mar.||41 pts.’18 + 160 pts.’19|
|Animal Kingdom||$101||150||$15,150||Buyer||Pro-Rate||Sept.||32 pts.’18 + 150 pts.’19|
|Animal Kingdom||$100||250||$25,000||Buyer||Pro-Rate||Sept.||204 pts.’17 + 46 pts.’18 + 250 pts.’19|
|Old Key West||$80||310||$24,800||Buyer||Pro-Rate||Jun.||155 pts.’18 + 310 pts.’19|
|Old Key West||$85||200||$17,000||Seller||Buyer||Oct.||400 pts.’17 + 200 pts. ’18 + 200 pts.’19|
|Old Key West||$84||150||$12,600||Buyer||Seller||Aug.||0 pts.’18 + 150 pts.’19|
|Old Key West||$87||150||$13,050||Buyer||Buyer||Mar.||150 pts.’18 + 150 pts.’19|
|Old Key West||$86||270||$23,220||Buyer||Buyer||Aug.||270 pts.’18 + 270 pts. ’19|
|Saratoga Springs||$86||210||$18,060||Seller||Pro-Rate||Sept.||108 pts.’17 + 140 pts.’18 + 210 pts.’19|
|Saratoga Springs||$88||255||$22,440||Buyer||Buyer||Apr.||255 pts.’18 + 255 pts.’19|
|Saratoga Springs||$88||200||$17,600||Buyer||Seller||Sept.||4 pts. ’18 + 200 pts.’19|
|Saratoga Springs||$95||180||$17,100||Buyer||Seller||Apr.||180 pts.’18 + 180 pts.’19|
|Saratoga Springs||$90||250||$22,500||Buyer||Seller||Apr.||0 pts. ’18 + 250 pts.’19|
Buy Back Rates for Disney Vacation Club Resorts
The table below shows the percentage of buybacks for all 3 different resorts purchased back in February:
|Resort||Buy Backs||Number Sold||Percentage Bought Back|
|Old Key West||5||21||23.8%|