DVC Right of First Refusal (ROFR): March ’17
Summary
In the month of March, Disney exercised their right of first refusal (ROFR) on 19 of 252 contracts sold through the DVC Resale Market, representing 7.5% of the contracts sold. This lowers the year-to-date buy back rate to 10.6%. Despite the drop, the 2017 buy back rate is still more than 2x that of the 4.4% buy back rate of 2016. In March, 92.5% of contracts were waived by Disney and year-to-date the waiver rate is 89.5%.
As mentioned in the ROFR reports from January and February a likely reason for the higher buy back rates so far in 2017 is due to Disney’s $5/pt. increase on all DVC properties in January, and the opportunity to buy back resales with prices at 2 year lows. However, as mentioned in the February ROFR report, DVC resale inventory has shrunk significantly in a short period of time (300 less active listings in less than 3 months) and shrinking inventory typically leads to rising prices. As anticipated, in March, with continued strong buyer demand and shrinking inventory, the resale market has began to see prices rising. This increase in prices could possibly be the main contributor in Disney’s buy back rate dropping approximately 49% from February to March.
What is 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.
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.
Details and Data
Price seemed to be the dominating criteria observed with buy backs in March. Outside of the 1 Animal Kingdom contract bought back and the 1 Grand Floridian contract bought back, both of which had strong point availability, the leading criteria appeared to be price. In fact, going into March nearly 90% of the contracts bought back in 2017 had strong point availability, meaning the contracts had all or almost all of the ’17 points and all points going forward. However, in March less than 60% of the contracts fit that mold. Where we did see consistency month to month was with the resorts we saw multiple buy backs from. Saratoga Springs, Old Key West and Bay Lake Tower stayed popular for buy backs. Notably missing from this list was Boardwalk, which didn’t have a single buy back in March despite 9 total buy backs from January and February. Also, we saw the first buy backs of the year for Grand Floridian, Hilton Head and Vero Beach. For a complete list of the buy backs in March, 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 | $87 | 140 | $12,180 | Buyer | Buyer | Apr | 222 pts. ’17 + 140 pts. ’18 |
| Bay Lake Tower | $107 | 210 | $22,470 | Buyer | Seller | Aug. | 210 pts. ’18 |
| Bay Lake Tower | $110 | 160 | $17,600 | Buyer | Buyer | Jun | 160 pts. ’17 + 160 pts. ’18 |
| Bay Lake Tower | $92 | 160 | $14,720 | Buyer | Pro-rated | Apr | 21 pts. ’17 + 160 pts. ’18 |
| Beach Club | $97 | 240 | $23,280 | Buyer | Seller | Oct | 240 pts. ’18 |
| Grand Floridian | $139 | 125 | $17,375 | Seller | Buyer | Dec | 183 pts. ’16 + 122 pts. ’17 + 125 pts. ’18 |
| Hilton Head | $50 | 222 | $11,100 | Buyer | Pro-Rated | Aug | 108 pts. ’17 + 222 pts. ’18 |
| Old Key West | $64 | 400 | $25,600 | Buyer | Buyer | Apr | 400 pts. ’16 + 400 pts. ’17 + 400 pts. ’18 |
| Old Key West | $69 | 150 | $10,350 | Buyer | Seller | Oct | 13 pts. ’17 + 150 pts. ’18 |
| Old Key West | $66 | 230 | $15,180 | Buyer | Buyer | Oct | 32 pts. ’16 + 230 pts. ’17 + 230 pts. ’18 |
| Old Key West | $71 | 210 | $14,910 | Seller | Buyer | Apr | 300 pts. ’17 + 210 pts. ’18 |
| Old Key West | $76 | 150 | $11,400 | Buyer | Pro-Rated | Aug | 147 pts. ’17 + 150 pts. ’18 |
| Saratoga Springs | $73 | 300 | $21,900 | Buyer | Seller | Apr | 300 pts. ’18 |
| Saratoga Springs | $81 | 150 | $12,150 | Buyer | Buyer | Dec | 150 pts. ’17 +150 pts. ’18 |
| Saratoga Springs | $75 | 200 | $15,000 | Buyer | Seller | Aug | 200 pts. ’18 |
| Saratoga Springs | $76 | 170 | $12,920 | Buyer | Seller | Jun | 152 pts. ’17 + 19 pts. ’18 |
| Saratoga Springs | $75 | 200 | $15,000 | Buyer | Buyer | Aug | 200 pts. ’17 + 200 pts. ’18 |
| Saratoga Springs | $79 | 160 | $12,640 | Buyer | Seller | Oct | 160 pts. ’17 + 160 pts. ’18 |
| Vero Beach | $50 | 100 | $5,800 | Buyer | Buyer | Apr | 100 pts. ’17 + 100 pts. ’18 |
Comments
Have you noticed if they see if buyer is already a dvc member? I bought 175 points at Polynesian when on a Disney cruise and thinking I may want more. Or buy at Aulani. Just wondering if they ever take that into consideration.
Larry, great question but we have never seen a correlation with whether the buyer was already a Member or not.
I think I got really lucky passing ROFR. Submitted to Disney 3/17 SSR 250points @$72. 7 banked 2016 points and 250 June 2017 and so on. Passed 3/31.
Can’t figure out what thier process is?? Is there a list anywhere what they let pass??
When DVC exercises ROFR on a contract, can they then split that contract up into smaller contracts or must it remain intact? Also, can they change the UY on a contract they bought back?
Bill, when Disney exercises ROFR, they can split the contract up into smaller contracts, however, they cannot change the Use Year.
I just bought direct to add on to my initial direct (VGF) that I purchased years ago. I specified the number of points I’d like….and I received 2contracts…1/2 in each…..so I wonder why if they can split them….why wouldn’t they put the 2 together in one…?
Diana – to meet your requested amount of points they may have needed to pull them from 2 different contracts. Your DVC Sales Guide may be best to answer this question, but that would be my guess.
First off thanks for wonderful work we closed in December of 2016 250 points at AKL we are wondering how soon can we buy another?
Carl, it was a pleasure assisting you, and we are ready to assist you with another purchase whenever you guys are ready.
What, if any are the costs to the contracted seller/buyer in the event DVC exercises ROFR?
Chuck, great question. There are no additional costs for the seller and the buyer can get their escrow deposit fully refunded.
Hey Nick,
What are seeing with ROFR for HHI? Just put in offer for 150 points and it was accepted. full points for 2017 and 2018. June use year.
Mike, year-to-date with have had only 1 Hilton Head contract bought back and the details regarding that contract are in the table above. Thanks, Nick
Hi Nick – I do not see the information on the buy back on Wilderness lodge – can you please share? I see there was one last month too with no information. Thanks! Tara
Tara, thank you for your question. Year-to-date we’ve only had 1 Wilderness Lodge bought back and it was in January. It was a 200 point contract, Feb. UY, $82/pt., closing cost split, buyer paying ’17 dues with point availability of 200 pts. ’17 + 200 pts. ’18. The January ROFR report: https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-rofr-january-17-report/
Got it – thanks Nick! I was thinking those were this month – didn’t realize it was YTD. I did see the one in January!
Wow- 300 fewer active listings, what is a more typical number? Any speculation as to why inventory is down or is this just usual seasonal variation that occurs from time to time?
Kim, great question. There is a little bit of seasonality in that there are typically more buyers January – April as that is when many people are planning their Spring, Summer and even Holiday trips to Disney for the year. Additionally, given that the market hit 2 year lows in prices, the market reacted with a very aggressive buying season (including Disney through ROFR).
Interesting! Thanks for your thought!
Resale market prices rising….not what I want to see when we just started looking 😐☺
It seems very rare that contracts with a Feb use year are purchased back. We got a great deal on a SSR contract and I feel almost certain that the only reason it passed was because of its Feb use year
In recently talking with a direct guide about buying in as a new member to DVC, they are offering last years points on contracts as a free bonus **provided that the use year hasn’t began.** I started this conversation in early March. So the Feb UY had began and he couldn’t offer me last years points for free. That shut down talks on my end. The guide wanted me to buy Dec because he could give me last years points and it’s a better deal. While I see a free year of points without dues is a better deal, I still wanted Feb UY because it fits with my family’s vacation schedule. I guessing that this is DVC’s way of making sure you have points available the day you buy. Otherwise, you’d buy Dec UY in March and have to borrow points or wait until December to get to use any points…. The buyer would always be borrowing from future points if they didn’t do this…. He said Dec is always better to buy add-ons on older resorts for that reason – last year points free policy. There was a waiting list for Dec UY but Feb had lots on the books for BLT at the time. So I shopped for Feb UY hoping they had a backlog of Feb UY inventory and wouldn’t ROFR my contracts.
We just had a SSR contract pass ROFR for a February use year. Our seller had borrowed all their 2018 points, so we got a great deal! Wondering if the whole February use year had more to do with this than the deal we thought we got! We already have another contract at SSR and don’t need the points this new contract will give us.