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%

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