DVC Right of First Refusal (ROFR): June ’18 Report

Filed in Animal Kingdom, Boardwalk, Buying DVC, Disney Vacation Club, DVC Resale, Grand Floridian, Hilton Head, Old Key West, ROFR

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Disney's Hilton Head

In the month of June, Disney exercised their right of first refusal (ROFR) on 36 of 267 Disney Vacation Club (DVC) contracts sold through the DVC Resale Market, representing 13.5% of the contracts sold. The waiver rate for June was 86.5%. At 36 buy backs, June 2018 represented the highest volume since February 2017, which saw 37 buy backs.

The streak of each month’s buy back rate increasing ended in June.  At 13.5%, June took a very slight dip from the 13.6% seen in May.  The year-to-date (YTD) buy back rate for 2018 is now 9.2%, which remains more than double 2016’s rate of 4.4% and ahead of 2017’s rate of 6.9%.  The YTD waiver rate is 90.8%.

The chart below shows the relationship between the average selling price per point and the buy back rate from June 2017 through June 2018.  When averaged out across all DVC resorts, resale prices have leveled off in 2018, on average staying between $110/pt. to $115/pt.  Additionally, for the 1st time this year, the buy back rate has leveled off.  It is interesting to note the buy back rate remains historically high between 13-14% while resale prices remain at historical high prices as well.

Historically, we have seen an inverse relationship with selling price per point and buy back rate, however in 2018, despite prices remaining fairly steady, the buy back rate has continued to increase or remain at high levels.  This phenomenon could be signaling that Disney Vacation Club has a very strong sales forecast ahead, which would make sense based on DVC’s direct sales being strong, hotel rooms / villas at high occupancy levels and even more big Disney World projects yet to be unveiled (i.e., new attractions, Star Wars: Galaxy’s Edge, Gondola Skyway, etc.)

 

 

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 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

Saratoga Springs, Animal Kingdom and Old Key West remain the focus of buy backs in 2018, representing over 90% of all buy backs in 2018.

Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold by DVC Resale Market through the month of June in 2018:

ROFR chart by resort 7.3.2018

Details on DVC Buybacks

In June, DVC Resale Market had buy backs of Animal Kingdom, Boardwalk, Hilton Head, Grand Floridian, Old Key West and Saratoga Springs. For the 4th consecutive month, Saratoga Springs led all resorts for buy backs with 15, followed by Animal Kingdom with 9.

Details on the contracts bought back in June are below:

Resort $/Point Pts. on Contract Price Closing Costs Paid by ’18 Dues Paid by Use Year Point Availability
Animal Kingdom $110 160 $17,600 Buyer Seller Aug. 19 Pts. ’18 + 160 Pts. ’19
Animal Kingdom $115 320 $36,800 Buyer Buyer Oct. 640 Pts. ’18 + 320 Pts. ’19
Animal Kingdom $110 160 $17,600 Buyer Seller Apr. 11 Pts. ’18 + 160 Pts. ’19
Animal Kingdom $94 360 $33,840 Seller Pro-Rate Oct. 28 Pts. ’18 + 360 Pts. ’19
Animal KIngdom $104 160 $16,640 Buyer Seller Jun. 21 Pts. ’18 + 139 Pts. ’19
Animal KIngdom $99 200 $19,800 Buyer Seller Feb. 0 Pts. ’18 + 164 Pts. ’19
Animal KIngdom $102 280 $28,560 Buyer Buyer Dec. 280 Pts. ’18 + 280 Pts. ’19
Animal Kingdom $108 160 $17,280 Buyer Buyer Dec. 160 Pts. ’18 + 160 Pts.’19
Animal Kingdom $102 210 $21,420 Buyer Seller Dec. 9 Pts. ’18 + 210 Pts. ’19
Boardwalk $107 200 $21,400 Buyer Buyer Jun. 200 Pts. ’18 + 200 Pts. ’19
Hilton Head $60 300 $18,000 Buyer Seller Apr. 0 Pts. ’18 + 300 Pts. ’19
Hilton Head $60 270 $16,200 Buyer Pro-Rate Jun. 13 Pts. ’18 + 270 Pts. ’19
Grand Floridian $130 850 $110,500 Buyer Pro-Rate Apr. 54 Pts. ’18 + 850 Pts. ’19
Old Key West $81 515 $41,715 Buyer Pro-Rate Jun. 44 Pts. ’18 + 515 Pts. ’19
Old Key West $87 230 $20,010 Buyer Seller Jun. 82 Pts. ’18 + 230 Pts. ’19
Old Key West $90 220 $19,800 Split Seller Feb. 85 Pts. ’18 + 220 Pts. ’19
Old Key West $87 220 $19,140 Split Seller Mar. 0 Pts. ’18 + 220 Pts. ’19
Old Key West $90 260 $23,400 Buyer Seller Apr. 220 Pts.’18 + 260 Pts.’19
Old Key West $85 210 $17,850 Seller Buyer Aug. 210 Pts. ’18 + 210 Pts. ’19
Old Key West $89 150 $13,350 Buyer Buyer Apr. 150 Pts. ’18 + 150 Pts. ’19
Old Key West $90 230 $20,700 Buyer Pro-Rate Aug. 222 Pts. ’18 + 230 Pts.’19
Saratoga Springs $91 260 $23,660 Buyer Seller Mar. 5 Pts. ’18 + 260 Pts. ’19
Saratoga Springs $92 295 $27,140 Buyer Pro-Rate Jun. 10 Pts. ’18 + 295 Pts. ’19
Saratoga Springs $96 225 $21,600 Buyer Seller Dec. 0 Pts. ’18 + 225 Pts. ’19
Saratoga Springs $93 250 $23,250 Buyer Seller Mar. 0 Pts. ’18 + 250 Pts. ’19
Saratoga Springs $94 120 $11,280 Buyer Pro-Rate Mar. 46 Pts. ’18 + 41 Pts. ’19
Saratoga Springs $95 160 $15,200 Seller Seller Dec. 2 Pts. ’18 + 160 Pts. ’19
Saratoga Springs $97 160 $15,520 Buyer Seller Dec. 9 Pts. ’18 + 160 Pts. ’19
Saratoga Springs $87 250 $21,750 Buyer Seller Dec. 0 Pts. ’18 + 250 Pts. ’19
Saratoga Springs $95 220 $20,900 Buyer Seller Jun. 0 Pts. ’18 + 220 Pts. ’19
Saratoga Springs $86 450 $38,700 Buyer Seller Aug. 0 Pts. ’18 + 450 Pts. ’19
Saratoga Springs $84 650 $54,600 Buyer Seller Apr. 0 Pts. ’18 + 650 Pts. ’19
Saratoga Springs $90 250 $22,500 Buyer Pro-Rate Jun. 17 Pts. ’18 + 250 Pts. ’19
Saratoga Springs $86 300 $25,800 Buyer Buyer Oct. 300 Pts. ’18 + 300 Pts. ’19
Saratoga Springs $93 300 $27,900 Buyer Seller Dec. 20 Pts. ’18 + 300 Pts. ’19
Saratoga Springs $94 170 $15,980 Buyer Pro-Rate Mar. 88 Pts. ’18 + 170 Pts. ’19

Buy Back Rates for Disney Vacation Club Resorts

The table below shows the percentage of buy backs for all 6 different resorts purchased back in June:

Resort Buy Backs Number Sold Percentage Bought Back
Saratoga Springs 15 62 24.2%
Animal Kingdom 9 41 22.0%
Old Key West 8 18 44.4%
Hilton Head 2 13 15.4%
Boardwalk 1 21 4.8%
Grand Floridian 1 13 7.7%

 

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

Comments

  • Homer
    July 13, 2018

    How long is Disney sitting on these contracts before hey are resold? Are they being sold to existing wait listed buyers or are they building an inventory for future?

    • Nick Cotton
      July 13, 2018

      Homer, great question, but I’m unsure of the precise answer to your question. Only someone working directly at DVC in corporate could probably answer this question accurately. They can use the inventory for rental purposes or to resale. I would assume it goes to the highest and best use of value and that may change based on business demand.

  • Gabe Paul
    July 10, 2018

    I’m kicking the tires on whether to seek out a BLT contract (potential first time buyer for DVC). I have a couple of questions:

    1. I know that you can get on the waitlist for buying direct through DVC, but how long does that usually take? I don’t see any BLT buybacks for 18 so far. Is that because of the ‘newness’ of the resort?

    2. Would buying resale for BLT trigger a ROFR, given that DVC hasn’t exercised any this year?

    3. One of the main reasons people have cited for not buying into certain DVC properties is the deed end date. I’m familiar with how this works, but should I honestly be worried? To be honest, it likely wont affect me, since I can see myself buying in the near future and keeping it for 10 years or so until both my kids hit college. I don’t anticipate keeping this long enough to pass down.

    4. I’d also be interested in buying direct at Riveria when sales open up, but am wondering if there have been any semi-confirmed reports on pricing? I am going down in Sept and have scheduled a DVC tour, so would any DVC cast member answer to any of the above?

    • Elaine
      July 18, 2018

      Gabe — You don’t even own yet and I am going to give you advice about selling — don’t do it!!! I have owned at OKW since 1994 (when it was simply the Disney Vacation Club) when I was a single mom of a 12 year old son. I remarried in 2000 and acquired a husband and two bonus kids. I bought additional points at Saratoga Springs to accommodate our growing family. When our kids hit college age, they did indeed lose interest in WDW. I sold SSR in 2010. I am now back on the market to buy more points to cover our kids, their spouses and grandkids. I am kicking myself for having sold when I could have simply rented out those points at a profit.

      • John Farrell
        July 22, 2018

        After a friend bought in OKW in the late 90’s, my wife and I bought 270 pts. @ Boardwalk and 70 @ Vero Bach. Our sons were in HS/college then. Now with 4 grandchildren 13, 9, 8 & 7, we continue to go every other year. What grandchild doesn’t want to go to WDW with their grandparents & family?!?! Evenually I will pass my ownership to my sons. Unless you have financial issues why sell? This year we will spend a week in a 3br Boardwalk villa, and my wife and I will used the Vero pts. go us alone.

    • Nick Cotton
      July 10, 2018

      Gabe

      Thank you for your questions, and answers to your questions are below:

      1. I know that you can get on the waitlist for buying direct through DVC, but how long does that usually take? I don’t see any BLT buybacks for 18 so far. Is that because of the ‘newness’ of the resort?

      For a timeline on the direct waitlist I would recommend contacting DVC directly as timelines can change over time and can highly depend on the resort. We haven’t had any buybacks of Bay Lake Tower this year, however, last year we had 20 bought back.

      2. Would buying resale for BLT trigger a ROFR, given that DVC hasn’t exercised any this year?

      We have sold well over 200 Bay Lake Tower contracts this year so while Bay Lake Tower can certainly get bought back, just the act of 1 more selling will not by itself trigger ROFR.

      3. One of the main reasons people have cited for not buying into certain DVC properties is the deed end date. I’m familiar with how this works, but should I honestly be worried? To be honest, it likely wont affect me, since I can see myself buying in the near future and keeping it for 10 years or so until both my kids hit college. I don’t anticipate keeping this long enough to pass down.

      Doesn’t read like the end date will impact your vacations since you are looking to keep it for around 10 years.

      4. I’d also be interested in buying direct at Riveria when sales open up, but am wondering if there have been any semi-confirmed reports on pricing? I am going down in Sept and have scheduled a DVC tour, so would any DVC cast member answer to any of the above?

      I have not heard of any pricing for the Disney Riviera Resort. Typically, DVC doesn’t release that information until they are ready to begin pre-sales, but you are certainly welcome to inquire on your scheduled tour.

  • Patricia
    July 7, 2018

    Disney does not seem to buy back small contracts – is this because there are not enough points for them to make much money, or because smaller contracts have a tendency to sell for a higher price?

    • Nick Cotton
      July 8, 2018

      Patricia – great question. From experience it is because they tend to sell at higher prices. On rare occasion when a small contract has sold at a similar price to a more average or large size contract, Disney has routinely bought them back.

  • Jay
    July 5, 2018

    The AK, OKW and SS frenzy continues I see. We lost 3 OKW in a row to ROFR so decided to try a completely different resort that they rarely take. Hopefully our luck will change with this next one. Love the blog.

  • Sarah S.
    July 3, 2018

    Thank you for this information. It is always interesting to look at. I would be curious to know if there is a pattern in buy backs related to existing DVC members vs. new DVC members. To clarify, are they buying back more contracts from people who are already DVC members adding on or from people who are starting their membership with a resale contract. Not sure if there would be any correlation but it might be interesting to examine.

    • Darrell White
      July 9, 2018

      Clever question!

    • Nick Cotton
      July 4, 2018

      Sarah, great question. We have looked into this and never found a correlation, so we didn’t publish anything on the topic, but great observation.

  • Michael Carroll
    July 3, 2018

    Hi Nick – first time seeing this report, but WOW that is a huge effort to produce such a nice report! I do have a question – I see the listings and their status on your resale site but how can one find out the actual sale prices on non-WDW ROFR? thanks, Mike C.

  • Darrell
    July 3, 2018

    As always thanks very much for this Nick. We really appreciate the work that goes into providing this info to us. Keep up the good work!

    • Nick Cotton
      July 3, 2018

      Thank you Darrell, much appreciated!

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