DVC Exercising ROFR

[Nabas]

You might be surprised at what "solid margin" means. Standard practice in the timeshare industry is that cost of construction (including land, prep, etc.) is about 20-30% of the total cost of sales. So, unless those resales are down in the low 40s or so, DVD is better off building a shiny new resort and selling that for $165, because the cost basis is lower.

When I researched the records many years ago, the construction cost for Bay Lay Tower was about $30 per point.

 

[i<3riviera]

͏

 

[andyman8]

Given this information, it would be unwise to move forward with a direct purchase (even if your Guide says there's limited availability at your requested sold-out resort) before letting your resale contract passes ROFR, right? We would be asking for a direct contract for the same (sold-out) resort, same amount of points, and same use year. Or am I off base here?

 

[CastAStone]

Given this information, it would be unwise to move forward with a direct purchase (even if your Guide says there's limited availability at your requested sold-out resort) before letting your resale contract passes ROFR, right? We would be asking for a direct contract for the same (sold-out) resort, same amount of points, and same use year. Or am I off base here?

No I think that’s spot on. You could literally lose your contract to yourself. If you do lose your contract to ROFR it’s possible your next best resale option is a different UY.

On the flip side the direct benefit minimum point purchase is rumored to increase in about 45 days so we’re up against it for getting contracts submitted to ROFR and getting an answer back before then.

 

[andyman8]

No I think that’s spot on. You could literally lose your contract to yourself. If you do lose your contract to ROFR it’s possible your next best resale option is a different UY.

On the flip side the direct benefit minimum point purchase is rumored to increase in about 45 days so we’re up against it for getting contracts submitted to ROFR and getting an answer back before then.

Interesting. Here's hoping it clears ROFR! Thank you, as always, for your insights!

 

[sethschroeder]

Also do not expect to be able to get a contract for a October UY next month and do not expect to call them 2 days before the points go up and expect them to have points.

It is possible they will go in to a waitlist to end next month at most resorts depending on how much demand there is. I would be talking to the agent now if you are thinking about something.

 

[EM Lawrence]

I don't think I've seen this speculated about yet. But is it possible that there is a different reason than direct sales inventory needs that is causing Disney to exercise ROFR? There was a theory a few months ago when Disney extended points that were going to expire during the time the resorts were closed that Disney was actually dipping into its own pool of points to extend those points and gifting them to the owners. I believe @Sandisw mentioned this theory. We've also seen Disney move hotel cash guests to DVC properties. I know they are allowed to do this with breakage points, and by predicting breakage patterns. But I don't think I've seen any mention that the general members know what those numbers typically look like. Could it be that Disney found itself short on points? Could it be that between these two scenarios, Disney found itself in need of more points to own in order to both extend expired points and house cash guests at DVC resorts? Just something I've been mulling. I have a very hard time believing that there is high demand for direct sales right now.

 

[sethschroeder]

I don't think I've seen this speculated about yet. But is it possible that there is a different reason than direct sales non entity needs that is causing Disney to exercise ROFR? There was a theory a few months ago when Disney extended points that were going to expire during the time the resorts were closed that Disney was actually dipping into its own pool of points to extend those points and gifting them to the owners. I believe @Sandisw mentioned this theory. We've also seen Disney move hotel cash guests to DVC properties. I know they are allowed to do this with breakage points, and by predicting breakage patterns. But I don't think I've seen any mention that the general members know what those numbers typically look like. Could it be that Disney found itself short on points? Could it be that between these two scenarios, Disney found itself in need of more points to own in order to both extend expired points and house cash guests at DVC resorts? Just something I've been mulling. I have a very hard time believing that there is high demand for direct sales right now.

Disney can fairly easily see how many rooms are open at all the resorts and how many people are actually traveling.

If they were tight on space they would just open another hotel. They have delayed opening because how slow it is.

 

[Sandisw]

I don't think I've seen this speculated about yet. But is it possible that there is a different reason than direct sales non entity needs that is causing Disney to exercise ROFR? There was a theory a few months ago when Disney extended points that were going to expire during the time the resorts were closed that Disney was actually dipping into its own pool of points to extend those points and gifting them to the owners. I believe @Sandisw mentioned this theory. We've also seen Disney move hotel cash guests to DVC properties. I know they are allowed to do this with breakage points, and by predicting breakage patterns. But I don't think I've seen any mention that the general members know what those numbers typically look like. Could it be that Disney found itself short on points? Could it be that between these two scenarios, Disney found itself in need of more points to own in order to both extend expired points and house cash guests at DVC resorts? Just something I've been mulling. I have a very hard time believing that there is high demand for direct sales right now.

Yes..and there have been a few posts where members mentioned CMs saying something that indicated the points were not from their home resort.

One thing I have learned is that trying to figure out the motives is impossible but so much fun coming up with lots of ideas!!!!

 

[andyman8]

No I think that’s spot on. You could literally lose your contract to yourself. If you do lose your contract to ROFR it’s possible your next best resale option is a different UY.

On the flip side the direct benefit minimum point purchase is rumored to increase in about 45 days so we’re up against it for getting contracts submitted to ROFR and getting an answer back before then.

Also do not expect to be able to get a contract for a October UY next month and do not expect to call them 2 days before the points go up and expect them to have points.

It is possible they will go in to a waitlist to end next month at most resorts depending on how much demand there is. I would be talking to the agent now if you are thinking about something.

Follow-up question then: I've been talking with a guide for the last few weeks and have just been floating questions (haven't gotten into specifics about use year and/or points, other than some general recommendations on his part). He's been incredibly low-pressure, which I really appreciate. We've left it off at I'm very interested and just need some time to hammer out the details and finances which could take some time. He said he completely understood and to take whatever time I need. He said we'll have flexibility with use year and such but he'd suggest acting "before Christmas" (his timeline, not mine; I don't plan on waiting that long).

I then found a resale contract at a good price, so I decided to move forward with that, but I still very much want to buy direct (really hoping to do so before the minimum goes up, but it'll be tight likely). I'm looking at a September use year. My question is, given @sethschroeder's advice, should I tell my guide I've found a resale contract but still want to proceed with direct after/if that closes? Keep the conversations going? What would you recommend? I don't want to increase my odds of getting ROFRd.

 

[CastAStone]

I made another chart. Sorry everyone. But I think it sheds light on why Disney needed to start ROFRing contracts again. This is the number of contracts Disney acquired by month for any reason (ROFR, Deed-in-lieu of Foreclosure, deed surrender, Foreclosure Auction, inheritance surrender, direct purchase on the open market, and so on) according to what has been filed with Orange County (the recent ROFRs have not been filed yet; they need to close first).

You'll notice that the numbers fall off a cliff starting in April. You'll also notice they dwindle close to zero in July and August 2020. I looked at the July and August deeds and Disney in the last several weeks has only filed acquisitions of Deed-in-lieu of Foreclosure (giving your deed to Disney to satisfy your non-payment of dues and avoid court proceedings) and deed surrender (straight up giving your timeshare to Disney for nothing in return in order to be rid of your future obligations), both of which are voluntary and can be done outside of court. There have been no auction acquisitions in the last several weeks, and only a smattering in the few months before that; I'm guessing most of what we see in April May and June are delayed closings from deals or settlements made pre-COVID.

Number of contracts acquired by DVD for any reason:

 

[OilyDisneyFamily]

Have your OKW points become available yet? Just wondering since I’m also on the waitlist.

Still waiting for them

 

[CarolynFH]

I made another chart. Sorry everyone. But I think it sheds light on why Disney needed to start ROFRing contracts again. This is the number of contracts Disney acquired by month for any reason (ROFR, Deed-in-lieu of Foreclosure, deed surrender, Foreclosure Auction, inheritance surrender, direct purchase on the open market, and so on) according to what has been filed with Orange County (the recent ROFRs have not been filed yet; they need to close first).

You'll notice that the numbers fall off a cliff starting in April. You'll also notice they dwindle close to zero in July and August 2020. I looked at the July and August deeds and Disney in the last several weeks has only filed acquisitions of Deed-in-lieu of Foreclosure (giving your deed to Disney to satisfy your non-payment of dues and avoid court proceedings) and deed surrender (straight up giving your timeshare to Disney for nothing in return in order to be rid of your future obligations), both of which are voluntary and can be done outside of court. There have been no auction acquisitions in the last several weeks, and only a smattering in the few months before that; I'm guessing most of what we see in April May and June are delayed closings from deals or settlements made pre-COVID.

Number of contracts acquired by DVD for any reason:
View attachment 518950

Thanks - this is one of the more interesting charts I've seen in a while! It's especially interesting to me as a long-time BWV owner to see it's at the middle to lower end of the pack. I assume it's because BWV is easier to sell than OKW, which is only a few years older than BWV, but I'm sure there are other factors involved, such as Disney taking back more 2042 OKW deeds in ROFR in order to convert them to 2057 deeds.

 

[Cyberc1978]

I made another chart. Sorry everyone. But I think it sheds light on why Disney needed to start ROFRing contracts again. This is the number of contracts Disney acquired by month for any reason (ROFR, Deed-in-lieu of Foreclosure, deed surrender, Foreclosure Auction, inheritance surrender, direct purchase on the open market, and so on) according to what has been filed with Orange County (the recent ROFRs have not been filed yet; they need to close first).

You'll notice that the numbers fall off a cliff starting in April. You'll also notice they dwindle close to zero in July and August 2020. I looked at the July and August deeds and Disney in the last several weeks has only filed acquisitions of Deed-in-lieu of Foreclosure (giving your deed to Disney to satisfy your non-payment of dues and avoid court proceedings) and deed surrender (straight up giving your timeshare to Disney for nothing in return in order to be rid of your future obligations), both of which are voluntary and can be done outside of court. There have been no auction acquisitions in the last several weeks, and only a smattering in the few months before that; I'm guessing most of what we see in April May and June are delayed closings from deals or settlements made pre-COVID.

Number of contracts acquired by DVD for any reason:
View attachment 518950

Sorry I have looked at your chart and except for Disney taking a bunch of contracts it’s still not clear to me why they started to take them again?

 

[CastAStone]

Sorry I have looked at your chart and except for Disney taking a bunch of contracts it’s still not clear to me why they started to take them again?

They haven’t acquired very many contracts recently. Typically they require a lot via foreclosure and auction, and supplement with ROFR as needed. The last several months - no auctions, no foreclosures, no ROFR, and Disney has likely just flat out run out of salable contracts.

Until something changes on the foreclosure/auction side I imagine we will see Disney ROFRing all resorts except CCV and RVA (and perhaps Poly).

 

[Naglejen]

ack! I hope they don’t start taking Poly!

 

[sethschroeder]

Did you pick week 49 or did they tell you that they had a week 49 fixed week available?

I know you have been digging around. Do you know is there a way to track the number of Fixed Weeks that are left at a resort? Like is there a limit posted and then I could do a search on deeds for the tax amount possibly?

Trying to figure out how likely or unlikely a fixed week will be if I were to hold off until early next year instead of pull the trigger now.

 

[CastAStone]

I know you have been digging around. Do you know is there a way to track the number of Fixed Weeks that are left at a resort? Like is there a limit posted and then I could do a search on deeds for the tax amount possibly?

Trying to figure out how likely or unlikely a fixed week will be if I were to hold off until early next year instead of pull the trigger now.

I think You could track it but you’d have to physically look at every single deed. @i<3riviera @wdrl do you know if fixed weeks are noted on the deeds?

 

[i<3riviera]

͏

 

[sethschroeder]

yep, the fixed weeks are noted on the deeds ...

View attachment 519102
https://or.occompt.com/recorder/eagleweb/downloads/myPdf.pdf?&parent=DOC2619S4741

Do you know if the limit they can sell is listed somewhere as well? Like 10 Studios for week 50 at RIV (just as an example).

Finding the deeds wouldnt be terrible I don't think because you could sort by taxes paid (since FW have to be stand alone).