DVC Right of First Refusal (ROFR): July ’17 Report

Summary

In the month of June, Disney exercised their right of first refusal (ROFR) on 5 of 207 contracts sold through the DVC Resale Market, representing 2.4% of the contracts sold.  This lowers the year-to-date (YTD) buy back rate to 7.6%.  Although, July represented a 5th straight month in the buy back rate declining, the buy back in July was nearly the same as June’s buy back rate of 2.5%. In July, 97.6% of contracts were waived by Disney, bringing the YTD waiver rate to 92.4%.

In a year of a lot of change in buy back rate and sometimes what was being acquired back, the month of July was a bit of departure as it proved to provide some consistency. July was fairly steady in having a similar buy back rate as the previous month and in having resorts that are commonly bought back.  The four different resorts we saw buy backs from in July (Animal Kingdom, Bay Lake Tower, Boardwalk and Saratoga Springs) are among the 5 most common resorts we typically see being taken back.  The only resort not purchased back in July that is commonly bought back was Old Key West.

In July, as DVC resale prices rose, the buy rate continued to stay low.  This year continues to show an inverse relationship of price per point and buy back rate as visually 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.

Resorts 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 July of 2017:

Details and Data

In July, 4 resorts saw buy backs.  All 4 resorts are typically among the most common resorts we observe being bought back. For details on those contracts that were acquired back, please see the table below:

Resort Buy Back Rates

There were 4 different DVC resorts bought back in July for contracts sold by DVC Resale Market.  The table below shows the percentage of buy backs for those 4 resorts: