DVC Right of First Refusal (ROFR): October ’18 Report
In the month of October, Disney exercised their right of first refusal (ROFR) on 22 of 208 Disney Vacation Club (DVC) contracts sold through the DVC Resale Market, representing 10.6% of the contracts sold. The waiver rate for October was 89.4%.
At 10.6%, the October buy back stayed close in line with the year-to-date (YTD) buy back rate for 2018, which is 9.6%. 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 90.4%.
The chart below shows the relationship between the average selling price per point and the buy back rate from October 2017 through October 2018. The average price per point for all resorts sold in October dipped to $112/pt., and the buy back rate experienced a slight uptick. 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
Old Key West took the top spot for volume of buy backs in October with 10. Typically, that position has been reserved for Saratoga Springs, which had 9 buy backs in October. Although Saratoga Springs has the most contracts bought back in 2018, Old Key West has the highest percentage of buy backs by far.
In 2018, nearly one-third of all Old Key contracts submitted by DVC Resale Market have been bought back in ROFR. This is significant as the next resort for highest buy back percentage is Saratoga Springs at 17%, and the average buy back rate for all resorts in 2018 is just under 10%. Often times Disney has a strong advantage in buying back Old Key West in that when they purchase a non-extended Old Key West contract (the vast majority are non-extended), they resell them with the extension automatically included, thus increasing the value.
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 October in 2018:
Details on DVC Buybacks
In October, DVC Resale Market had buy backs of Animal Kingdom, Hilton Head, Old Key West, and Saratoga Springs.
Details on the contracts bought back in October are below:
| Resort | $/Point | Pts. on Contract | Price | Closing Costs Paid by | ’18 Dues Paid by | Use Year | Point Availability |
| Animal Kingdom | $108 | 160 | $17,280 | Buyer | Seller | Oct. | 247 pts.’18 + 160 pts.’19 |
| Animal Kingdom | $110 | 140 | $15,400 | Buyer | Seller | Dec. | 140 pts.’18 + 140 pts.’19 |
| Hilton Head | $74 | 300 | $22,200 | Buyer | Seller | Oct. | 145 pts.’18 + 300 pts.’19 |
| Old Key West | $87 | 260 | $22,620 | Buyer | Seller | Feb. | 0 pts.’18 + 260 pts.’19 |
| Old Key West | $100 | 150 | $15,000 | Buyer | Seller* | Sept. | 23 pts.’18 + 3 pts.’19 |
| Old Key West | $90 | 310 | $27,900 | Buyer | Seller | Aug. | 70 pts.’18 + 310 pts.’19 |
| Old Key West | $97 | 230 | $22,310 | Buyer | Seller | Oct. | 236 pts.’18 + 228 pts.’19 |
| Old Key West | $86 | 310 | $26,660 | Buyer | Pro-Rate | Apr. | 224 pts.’18 + 310 pts.’19 |
| Old Key West | $90 | 220 | $19,800 | Buyer | Buyer | Sept. | 223 pts.’18 + 220 pts.’19 |
| Old Key West | $90 | 296 | $26,640 | Buyer | Seller | Feb. | 0 pts.’18 + 296 pts.’19 |
| Old Key West | $90 | 300 | $27,000 | Buyer | Seller | Feb. | 0 pts.’18 + 300 pts.’19 |
| Old Key West | $95 | 190 | $18,050 | Buyer | Seller | Apr. | 0 pts.’18 + 190 pts.’19 |
| Old Key West | $85 | 270 | $22,950 | Buyer | Seller | Dec. | 0 pts.’18 + 270 pts.’19 |
| Saratoga Springs | $97 | 150 | $14,550 | Buyer | Seller | Oct. | 1 pt.’18 + 150 pts.’19 |
| Saratoga Springs | $95 | 300 | $28,500 | Buyer | Seller | Dec. | 0 pts.’18 + 300 pts.’19 |
| Saratoga Springs | $97 | 200 | $19,400 | Buyer | Seller | Dec. | 0 pts.’18 + 200 pts.’19 |
| Saratoga Springs | $91 | 300 | $27,300 | Buyer | Seller* | Mar. | 0 pts.’18 + 10 pts.’19 |
| Saratoga Springs | $96 | 160 | $15,360 | Buyer | Seller* | Aug. | 0 pts.’18 + 14 pts.’19 |
| Saratoga Springs | $94 | 400 | $37,600 | Buyer | Seller | Sept. | 0 pts.’18 + 400 pts.’19 |
| Saratoga Springs | $95 | 350 | $33,250 | Buyer | Seller | Oct. | 0 pts.’18 + 350 pts.’19 |
| Saratoga Springs | $95 | 400 | $38,000 | Buyer | Seller* | Jun. | 12 pts.’18 + 21 pts.’19 |
| Saratoga Springs | $94 | 232 | $21,808 | Buyer | Seller | Jun. | 0 pts.’18 + 232 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 October:
| Resort | Buy Backs | Number Sold | Percentage Bought Back |
| Animal Kingdom | 2 | 40 | 5% |
| Hilton Head | 1 | 6 | 17% |
| Old Key West | 10 | 21 | 48% |
| Saratoga Springs | 9 | 44 | 20% |
Access all DVC resale listings and learn more about buying and selling with DVC Resale Market.
Comments
My wife and I just back from vacay at Disney. Went to a DVC sales guide. Disney now selling Grand Floridian directly again at 220 a point and have re-instated the Grand Floridian DVC waitlist. You will def be seeing an uptick in grand floridian buybacks. My advice, if you are pondering grand Floridian, buy on secondary market NOW!!! Glad Ibgot in at 135pp!!!!
To me, it appears Disney is creating an artificial price of timeshares due to the buyback within the last year. I have to wonder with the opening of the new timeshares compared to the older ones with less years if Disney may be stuck with a lot of inventory that buyers do not want or if they plan to rent the units. Any thoughts?
There will always be buyers for dvc at all price points. What WOULD drive people away from dvc is if Disney DIDNT buy contracts back and allowed the prices to tank.
Just back from Disney vacay. Disney selling Grand Floridian directly again at 220 a point. Wow, and am I ever glad I bought back when I did at 135!!!
Excellent report as always Nick. I was wondering if you could speak to what appears to be a spike in inventory, beyond the normal increase because of annual dues statements. I was looking for a contract a year ago and having a hard time finding a Sept UY, now I can pick and choose if I want to add on. Why the reason for the apparent shedding of contracts?
Thanks
Ernst – thank you for the kind words. In regards to inventory, having an increased inventory in late Fall is typical. The late Fall represents the smallest volume of buyers all year. However, this quickly changes after Christmas as vacation planning season starts, and lots of new buyers come to the market throughout the Winter and Spring. For example, in 2016, in November we were running around 350 listings but by May of 2017 we had less than 100 listings. Last year in November we were running around 250 listings and by May had around 150 listings. The good news is that you are looking at a great time in terms of selection, and if there is a contract that works and you are ready don’t hesitate because things can change quickly. The dues statements will not come out until December / January, and to your thinking this can also increase the amount of sellers, however, that is also the time of year as I previously mentioned many new buyers come to the market as well.