DVC Right of First Refusal (ROFR): January ’19 Report

Filed in Bay Lake Tower, Disney Vacation Club, ROFR

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bay lake tower with monorail

In the month of January, Disney exercised their right of first refusal (ROFR) on 50 Disney Vacation Club (DVC) contracts, and DVC Resale Market sold 561, resulting in an 8.9% buy back rate. (Contracts Bought Back in January / Contracts Sold in January). The waiver rate for January was 91.1%.

With 50 buy backs, January became the 2nd highest month we have observed for volume of buy backs. The highest volume of buy backs seen in one month was the previous month, December of 2018, which saw 55 buy backs. Not only was the volume high in December, but the percentage of buy backs was record breaking at 27%. This led to speculation in December of a potential direct price increase, which did occur on January 16th.

The reason the buy back rate is much lower in January despite the high volume of buy backs is due to the large amount of sales in January, driven by not only peak buying season (typically January – April), but also the urgency created from DVC resale restrictions that went into effect on January 19th.

The average price per point for DVC resales reached a record high in January at $118/point. If the higher selling price per point maintains, it will be interesting to see if that impacts the buy back rate going forward. The chart below shows the relationship between the average selling price per point and the buy back rate from January 2018 through January 2019.

YTD Price Per Point vs. Buy Back Rate 2019

What is Right of First Refusal (ROFR)?

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 typically takes no more than 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 2019

In January, eight different DVC resorts experienced buy backs.  Bay Lake Tower, which went completely under the buy back radar in 2018 until December, starts off 2019 with a whopping 13 buy backs.  Bay Lake Tower also had the highest percentage of buy backs for any one resort in January at 20%.

Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold by DVC Resale Market year-to-date in 2019:

YTD Buy Back Chart 2.3.19

Details on DVC Buybacks

In January, DVC Resale Market experienced buy backs for Animal Kingdom, Bay Lake Tower, Beach Club, Boardwalk, Grand FloridianHilton Head, Old Key West and Saratoga Springs.

Details on the contracts bought back in January are below:

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Animal Kingdom $104 160 $16,640 Buyer Pro-Rate Jun. 115 pts.’19 + 160 pts.’20
Animal Kingdom $110.5 160 $17,675 Seller Seller Apr. 0 pts.’19 + 160 pts.’20
Animal Kingdom $103 200 $20,600 Buyer Buyer Sept. 200 pts.’19 + 200 pts.’20
Animal Kingdom $104 225 $23,400 Buyer Buyer Oct. 225 pts.’19 + 225 pts.’20
Animal Kingdom $104 200 $20,800 Buyer Buyer Oct. 200 pts.’19 + 200 pts.’20
Animal Kingdom $84 320 $26,880 Buyer Seller* Apr. 0 pts.’19 + 0 pts.’20
Animal Kingdom $102 160 $16,320 Buyer Seller* Mar. 0 pts.’19 + 0 Pts. ’20
Animal Kingdom $111 100 $11,100 Buyer Buyer Dec. 101 pts.’18 + 100 pts.’19
Animal Kingdom $105 240 $25,200 Buyer Buyer Oct. 168 pts.’18 + 240 pts.’19
Animal Kingdom $100 160 $16,000 Buyer Seller Feb. 1 pt.’19 + 150 pts.’20
Animal Kingdom $105 160 $16,800 Buyer Buyer Dec. 160 pts.’19 + 160 pts.’20

* Seller Provided Credit to Buyer for 2020 Points Used

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Bay Lake Tower $138 200 $27,600 Buyer Buyer Aug. 48 pts.’18 + 200 pts.’19
Bay Lake Tower $126 160 $20,160 Buyer Pro-Rate Aug. 7 pts.’19 + 160 pts.’20
Bay Lake Tower $130 201 $26,130 Buyer Seller Feb. 1 pt.’19 + 201 pts.’20
Bay Lake Tower $130 160 $20,800 Buyer Pro-Rate Apr. 65 pts.’19 + 160 pts.’20
Bay Lake Tower  $133 220 $29,260 Buyer Pro-Rate Apr. 128 pts.’19 + 220 pts.’20
Bay Lake Tower $134 200 $26,800 Buyer Buyer Dec. 160 pts.’19 + 160 pts.’20
Bay Lake Tower $137 200 $27,400 Buyer Buyer Sept. 200 pts.’19 + 200 pts.’20
Bay Lake Tower $135 160 $21,600 Buyer Buyer Aug. 160 pts.’19 + 160 pts.’20
Bay Lake Tower $139 160 $22,240 Buyer Buyer Apr. 8 pts.’18 + 160 pts.’19
Bay Lake Tower $145 250 $36,250 Buyer Buyer Jun. 350 pts.’18 + 250 pts.’19
Bay Lake Tower $137 100 $13,700 Buyer Seller Jun. 0 pts.’19 + 100 pts.’20
Bay Lake Tower $139 110 $15,290 Buyer Buyer Aug. 110 pts.’19 + 110 pts.’20
Bay Lake Tower $135 200 $27,000 Buyer Buyer Sept. 320 pts.’18 + 160 pts.’19

 

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Beach Club $138 250 $34,500 Buyer Buyer Dec. 239 pts.’18 + 250 pts.’19
Beach Club  $120 300 $36,000 Buyer Seller Mar. 29 pts.’19 + 300 pts.’20
Beach Club $130 150 $19,500 Buyer Pro-Rate Jun. 115 pts.’19 + 150 pts.’20

 

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Boardwalk $117 170 $19,890 Buyer Pro-Rate Sept. 98 pts.’19 + 170 pts.’20
Boardwalk $113 350 $39,550 Seller Buyer Dec. 355 pts.’18 + 350 pts.’19
Boardwalk $110 220 $24,200 Buyer Buyer Apr. 250 pts.’19 + 250 pts.’20
Boardwalk $116 225 $26,100 Buyer Buyer Dec. 225 pts.’19 + 225 pts.’20

 

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Grand Floridian $150 110 $16,500 Buyer Buyer Apr. 168 pts.’19 + 110 pts.’20
Grand Floridian $154.5 200 $30,900 Buyer Buyer Apr. 222 pts.’19 + 200 pts.’20
Grand Floridian $156 160 $24,960 Buyer Buyer Dec. 160 pts.’19 + 160 pts.’20
Grand Floridian $155 170 $26,350 Buyer Pro-Rate Jun. 56 pts.’18 + 165 pts.’19

 

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Hilton Head $66 170 $11,220 Seller Seller Aug. 172 pts.’19 + 170 pts.’20

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Old Key West $99 150 $14,850 Buyer Buyer Sept. 150 pts.’19 + 150 pts.’20
Old Key West $90 220 $19,800 Buyer Pro-Rate Feb. 169 pts.’19 + 220 pts.’20
Old Key West $95 172 $16,340 Buyer Buyer Dec. 172 pts.’19 + 172 pts.’20

 

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’19 Dues Paid by Use Year Point Availability
Saratoga Springs $93 200 $18,600 Buyer Seller Jun. 0 pts.’19 + 200 pts.’20
Saratoga Springs $95 150 $14,250 Buyer Pro-Rate Feb. 21 pts.’19 + 150 pts.’20
Saratoga Springs $95 240 $22,800 Buyer Pro-Rate Jun. 114 pts.’19 + 240 pts.’20
Saratoga Springs $97 200 $19,400 Buyer Seller Jun. 0 pts.’19 + 200 pts.’20
Saratoga Springs $95 500 $47,500 Seller Buyer Mar. 500 pts.’19 + 500 pts.’20
Saratoga Springs $98 270 $26,460 Buyer Buyer Mar. 275 pts.’19 + 270 pts.’20
Saratoga Springs $99 200 $19,800 Buyer Buyer Oct. 200 pts.’19 + 200 pts.’20
Saratoga Springs $100 200 $20,000 Buyer Buyer Aug. 131 pts.’18 + 200 pts.’19
Saratoga Springs $101 270 $27,270 Buyer Buyer Jun. 439 pts.’19 + 270 pts.’20
Saratoga Springs $96 100 $9,600 Buyer Seller* Feb. 0 pts.’19 + 0 pts.’20
Saratoga Springs $99 100 $9,900 Buyer Seller Dec. 6 pts.’19 + 100 pts.’20

* Seller Provided Credit to Buyer for 2020 Points Used

Buy Back Rates for Disney Vacation Club Resorts

The table below shows the percentage of buy backs for all 8 different resorts purchased back in January:

Resort Buy Backs Number Sold Percentage Bought Back
Animal Kingdom 11 100 11%
Bay Lake Tower 13 66 20%
Beach Club 3 24 13%
Boardwalk 4 34 12%
Grand Floridian 4 40 10%
Hilton Head 1 12 8%
Old Key West 3 19 16%
Saratoga Springs 11 122 9%

 

Access all DVC resale listings and learn more about buying and selling with DVC Resale Market.

Comments

  • beth lerner
    February 7, 2019

    Hi Nick! Love reading your ROFR report. Thanks for taking the time as it’s very interesting.
    Do you have an explanation as to why disney’s suddenly going so crazy over BLT after completely ignoring it for most of 2018?
    I’m thinking i should have bought more BLT than i did, but of course that’s probably a common thought after buying points (should have bought more).

  • Paul
    February 7, 2019

    Nick
    What are the new restrictions effective 1-19-19

    • Nick Cotton
      February 7, 2019

      Paul, please see below:

      Effective for resale purchases submitted on or after January 19, 2019: Disney Vacation Club resale contracts purchased for the original 14 DVC resorts will only be able to exchange into those 14 existing resorts in the DVC network. These contracts will not be able to exchange into Disney’s Riviera Resort, Reflections – A Disney Lakeside Lodge and possibly additional future properties in the DVC system. All Members will still be able to exchange with RCI.

      Once sales of Disney’s Riviera Resort begin, Members who purchase a resale of Riviera will only be able to stay at Disney’s Riviera Resort in the DVC network. Those Members will still have access to RCI.

      For more details, please see: https://www.dvcresalemarket.com/blog/new-dvc-resale-restrictions-and-who-is-most-impacted/

  • Eric
    February 4, 2019

    Nick- Thank you for the great information & insight. Regarding Disney’s ROFR process, everything I’ve read states that Disney has up to 30 days from date of receipt to decision their ROFR. Is this guidance/best efforts, or a contractual obligation? Along that thread, does a contract buyer have any recourse or grievance avenue should Disney exercise the ROFR outside of the 30 day window? Thank you, Eric

    • Wil
      February 5, 2019

      Disney must be given at least 30 days before a resale transaction can go to closing. The POS states “Owners or Cotenants desiring to sell their Unit or Ownership Interest must notify DVD in writing no less than thirty (30) days in advance of the proposed closing date of their intent to sell and must include a copy of the proposed transaction reduced to writing in all respects.”

      In theory, if a transaction was submitted to Disney today and the proposed closing was scheduled for 75 days in the future, Disney could take the full 75 days to decide whether it wants to ROFR the deed.

    • Nick Cotton
      February 4, 2019

      Eric – they generally try and keep it at 30 days or under and for the most part the vast majority are, but they have stated they do not have to keep it at 30 days or under. In terms of taking recourse, given they have made it clear their position, you would have to seek legal advice on challenging their position.

  • Geoff
    February 4, 2019

    Does this mean certain resorts not mentioned had no buy backs?

    • Nick Cotton
      February 4, 2019

      Geoff – correct, if the resort is not mentioned in the blog, it did not have a buy back in January.

      • Geoff
        February 4, 2019

        Thanks Nick.

  • Ian
    February 4, 2019

    Hi Nick. The monthly info on contracts bought back is really helpful. Do you also publish the details of contracts which are waived. We want to get a feel for what prices seem to ‘get through’ at the Beach club as we have already suffered two buy backs

    • Nick Cotton
      February 4, 2019

      Ian – we don’t publish full details on every contract that gets waived, mainly due to the enormity of the data (i.e., 561 contracts sold in January), however, we try to provide a summary of selling price for all resorts to provide directional information. Please see our latest report for more details: https://www.dvcresalemarket.com/blog/dvc-resale-average-resale-prices-for-2018-january-december/.

      I should have January’s report on average selling prices done later this week. Combining this average selling price report with the ROFR report should provide some strong direction for those wanting to avoid ROFR, but of course when you call us we can provide any more specific details on contracts that were waived that were perhaps strong comparables to what you are buying.

      • Ian
        February 4, 2019

        Thanks Nick

  • Ellen Olson
    February 3, 2019

    My beach club contract that got bought back by Disney for an Oct use year and 220 points isn’t listed.

    • Nick Cotton
      February 4, 2019

      Ellen – I just double checked, I don’t see any contract matching that description with your name as the buyer from the January data. Do you have a contract number or a listing ID from us?

  • Chris
    February 3, 2019

    Do these include ones that are still in the Right if refusal process? (Decision not yet made)?

    • Nick Cotton
      February 3, 2019

      Chris – thank you for your question, and hopefully I haven’t created too much confusion. If you are referring to the buy back rate, it is a monthly calculation (Contracts Bought Back in January / Contracts Sold in January) so yes, it would include sales numbers from some contracts we have not heard back on and we would have some buy backs that were submitted in the previous month. The main reason we provide the rate using a monthly methodology vs. per contract methodology is using a per contract methodology would delay the data potentially up to 5-6 weeks as that is how long Disney is taking with some buy back decisions now. Waiting that long would obviously begin to make the data less relevant and hurt the intent of providing the data in a timely manner for making purchasing decisions, which is the main purpose of the blog.

      The main substance of the report is really the actual contracts bought back. The buy back rate is to give people a general idea of Disney’s current aggression level if you will. And historically, the market has be so consistent with sales and Disney has be so quick (historically within 2-3 weeks) in making buy back decisions even doing it on a monthly basis would have little variance to doing it on a per contract method. However, this month could easily be an exception with so many sales and Disney so far behind with making ROFR decisions that the monthly methodology may not be giving the best idea of Disney’s aggression level, hence why I alluded to a low rate due to a high number of sales.

      Hopefully, this helps clear up any confusion.

      • Alex
        February 5, 2019

        Nick, Thanks for the very informative monthly rofr updates and also for this clarification. Does this mean that the assumingly large number of contracts sent to rofr just prior to Jan 19th resale restrictions are actually mostly not in this data yet. And consequently we will see how Disney reacted to these in February report?

        • Nick Cotton
          February 5, 2019

          Alex, yes, a large number of those sent prior to the 19th are still in the ROFR process. The latest date Disney has reviewed to date is submissions to them on January 9th.

  • matt
    February 3, 2019

    Thanks for the info… however ..some confusion… you listed those as sold in Jan 2019… yet my sale is not there and I haven’t heard from anyone yet… are all the listing only from Jan?

    • Nick Cotton
      February 3, 2019

      Matt – the only contracts listed in detail are those that got bought back, not all contracts sold.

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