DVC Right of First Refusal (ROFR): November ’18 Report0 Comments
In the month of November, Disney exercised their right of first refusal (ROFR) on 14 of 208 Disney Vacation Club (DVC) contracts sold through the DVC Resale Market, representing 6.7% of the contracts sold. The waiver rate for November was 93.3%.
At 6.7%, the November buy back rate dipped to its lowest level since February of this year, and resulted in lowering the year-to-date (YTD) buy back rate for 2018 to 9.3%. Despite November’s decline the buy back rate for 2018 remains more than double 2016’s rate of 4.4% and ahead of 2017’s rate of 6.9%. The YTD waiver rate is 90.7%.
The chart below shows the relationship between the average selling price per point and the buy back rate from November 2017 through November 2018. The average price per point for all resorts sold in November matched the record high of $117/pt. previously observed in September. Along with the price bump we saw a decline in buy back rate, and this inverse relationship between price per point and buy back rate is not uncommon.
What is Right of First Refusal (ROFR)?
For those new to the concept of Right of First Refusal, it is the option Disney Vacation Club has to purchase any resale contract after a sales price has been agreed upon, and the contract has been executed. Each contract must be forwarded to DVC for review.
DVC may take up to 30 days to review the contract. At their discretion, Disney may step in and purchase the property themselves at the terms agreed upon by the Seller and original Buyer. DVC then becomes the Buyer, and the purchase is complete. Once DVC is the buyer there is not an opportunity to come back with a better offer in hopes of still purchasing the contract.
Disney Vacation Club Resort Contracts Bought Back in 2018
For the second straight month, Old Key West tops the lists of buy backs in volume. We had 6 Old Key West contracts bought back in November, representing 38% of the Old Key West contracts sold. This is not uncommon as Old Key West has been running a buy back rate of roughly 33% in 2018, which is the highest among all DVC resorts. The next closet resort for YTD buy back rate is Saratoga Springs at approximately 17%. While Saratoga Springs is in a distant second on rate, it does have a commanding lead in YTD volume of buy backs at 104.
Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold by DVC Resale Market through the month of November in 2018:
Details on DVC Buybacks
Details on the contracts bought back in November are below:
|Resort||$/Point||Pts. on Contract||Price||Closing Costs Paid by||’18 Dues Paid by||Use Year||Point Availability|
|Animal Kingdom||$109||160||$17,440||Buyer||Seller||Dec.||0 pts.’18 + 160 pts.’19|
|Animal Kingdom||$101||270||$27,270||Buyer||Seller||Dec.||0 pts.’18 + 270 pts.’19|
|Animal Kingdom||$102||220||$22,440||Buyer||Seller||Feb.||0 pts.’18 + 220 pts.’19|
|Hilton Head||$74||300||$22,200||Buyer||Seller||Oct.||145 pts.’18 + 300 pts.’19|
|Hilton Head||$71.50||400||$28,600||Buyer||Seller||Feb.||0 pts.’18 + 400 pts.’19|
|Old Key West||$93||230||$21,390||Buyer||Seller||Oct.||0 pts.’18 + 230 pts.’19|
|Old Key West||$85||350||$29,750||Buyer||Seller*||Mar.||0 pts.’18 + 125 pts.’19|
|Old Key West||$80||270||$21,600||Buyer||Seller*||Apr.||10 pts.’18 + 9 pts.’19|
|Old Key West||$84||310||$26,040||Buyer||Seller||Feb.||4 pts.’18 + 310 pts.’19|
|Old Key West||$83||500||$41,500||Buyer||Seller||Feb.||176 pts.’18 +1000 pts.’19|
|Old Key West||$94.25||230||$21,678||Buyer||Seller||Dec.||168 pts.’18 + 230 pts.’19|
|Saratoga Springs||$95||400||$38,000||Buyer||Seller||Feb.||0 pts.’18 + 292 pts.’19|
|Saratoga Springs||$95||200||$19,000||Seller||Seller||Dec.||261 pts.’18 + 200 pts.’19|
|Saratoga Springs||$97||234||$22,698||Buyer||Seller||Oct.||0 pts.’18 + 234 pts.’19|
* Seller Provided Credit to Buyer for 2019 Points Used
Buy Back Rates for Disney Vacation Club Resorts
The table below shows the percentage of buy backs for all 4 different resorts purchased back in November:
|Resort||Buy Backs||Number Sold||Percentage Bought Back|
|Old Key West||6||16||38%|