Navigating Disney’s Right of First Refusal
DVC by Resale buyers know that part of the process involves a 30-day waiting period for the ominous “Right of First Refusal Process” (ROFR). Simply put, Disney has the right to buy each and every resale contract at the exact same terms and conditions it is sold on the open market. If they do so, the seller still gets the same amount in a check from Disney, but the buyer has lost the contract and time.
Navigating the ROFR Process
As a buyer, how do you safely navigate this process? Education and patience. There was a time back in 1997 – ’98 when Disney would clearly buy any resale contract processed for less than $50 per point. It was cut and dry.
Buyers then found ways to navigate it by asking the seller to pay the closing costs or the annual dues to save them a few dollars. It didn’t take Disney long to catch on and they set their own boundaries. As Brokers, we dealt with it daily and had a pretty good feel for the threshold. Buyers who trusted our advice usually passed and those who didn’t…well, started over.
As more properties were built, prices increased, the economy shifted as did the resale market and both continue today. Disney’s buyback threshold started changing and now it is more reflective of the resort property than anything else. Demand dictates the highest influencing factor with properties like the Beach Club being comparable to Bay Lake Tower, even though it has 18 more years of ownership. For whatever reason, the general DVC loving population loves the Beach Club with its Stormalong Bay pool and walking distance to Epcot.
Once a buyer understands the demand on the property they want to own, getting a feel for the market becomes key. A DVC by Resale broker can easily educate them on the recent buybacks and safe margins for that particular resort, to avoid going through the 30-day waiting period more than once.
Bargain hunters, beware! If you live to negotiate, you can easily negotiate your way out of a really good contract and start all over. Even if a seller is eager to sell and takes an exceptionally low offer, Disney may step in and steal it away.
Patience. It’s the other key when it comes to saving the thousands of dollars the resale market affords when going this route. If Disney does step in and buys back a resale you had your sights set on, don’t get discouraged and don’t put too much pressure on yourself. While the buyback is rare, having time to find another resale at your favorite resort and pay a slightly higher price per point gives you the power. This market has been around for a long time and it’s not going anywhere. Disney keeps building more resorts and Members lifestyles continue to change!
Finally, and probably most important, it’s not personal. Really.
There are certain questions I have been asked probably a million times in my 21-year career of resales. One is, “Will Disney buy back this contract just because I already toured with them? I don’t want them mad at me.” The truth is, 99% of all resale buyers toured with or acquired information about the DVC thanks to the fantastic marketing machine that is Disney. Nobody wants them mad at us and trust me, they aren’t. It’s never personal. It’s always about the bottom line and the demand.
The ROFR protects the value of the real estate Disney has invested multi-millions in and protects you, as a Member, in the same way. Buyers eventually become sellers and even you don’t want to “give away” something you had faith in from the beginning. Keeping these things in mind as you hunt for the perfect DVC by Resale, will give you confidence and freedom to sail through the Right of First Refusal when the time comes.
