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DVC Right of First Refusal | Disney Vacation Club Terms to Understand when Buying DVC Resale - YouTube
Channel: Pixie Dust PhD
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Hey everyone, it's Jacqueline for
Pixie Dust PhD! If you're looking to buy
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Disney Vacation Club on the resale
market you may have come across the term
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right of first refusal. In today's video
we'll break down this jargon into
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something understandable.
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Before we get started if you're new to the channel
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thank you so much for tuning in. I have
an entire playlist of videos focused on
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DVC for you to check out. I also talk
about Walt Disney World, my journey as a
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YouTube creator. and other Disney related
content on this channel, and I hope
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you'll stick around. And if you're
returning thank you so much for coming
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back! Today's topic right of first
refusal. So first, if you're buying DVC
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directly through Disney then you really
don't need to worry about right of first
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refusal right now. Concerns for right of
first refusal really only apply if you're
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going through the resale market, and
particularly this really affects folks
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who are trying to buy on the resale
market. Note that Disney does not have a
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resale department--they do not handle
resales at all. Buying on the resale
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market all operates outside of Disney
and the official DVC department. Put as
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simply as possible: right a first refusal
is essentially a legalese term; this
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gives Disney Vacation Club the right to
purchase a contract on the resale market
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after the terms of the sale have been
agreed upon and the contract has been
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executed. For example, let's say I'm
selling my Disney Vacation Club contract
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on the resale market and you are
interested in buying it.
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We're probably working through a
third-party company. With the help of an
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agent I'll set a reasonable price for my
contract and it will get listed on their
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website. Then you as the buyer will
peruse the listings, and if you decide
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you want to buy my contract you'll
contact someone at that third-party
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company and they will work out details
between us. You actually can press your
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luck and try to negotiate contracts. A
lot of people don't do this, but you
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absolutely can. So after the
back-and-forth, if there is any at all,
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that's facilitated by this third-party
company between me (the seller) and you
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(the buyer) we will agree on a sale price
and the terms of everything. And now this
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contract has been executed. From then, our
contract goes to Disney Vacation Club
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for review. This process can take up to 30
days, and it is pretty variable with how
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long it takes. Sometimes it's very fast,
other times it's 24, 26, maybe even a few
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more days. Disney Vacation Club gets
these 30 days to evaluate if they want
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to exercise their right of first refusal
on our contract. Most of the time Disney
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Vacation Club waives that right, which
means the contract closes between the
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original seller (me) and the original
buyer (you), and in this case you get your
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resale contract just like you'd hoped.
However, at their discretion Disney
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Vacation Club may step in to buy that
property on the terms you and I agreed
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on. Once Disney Vacation Club has made
this decision--to use their right of
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first refusal--there's no going back. The
seller, in this case me, can't renegotiate
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any terms or take the contract back or
anything. It is now with Disney Vacation
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Club. So as a seller I really haven't
lost much; right of first refusal works
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on a contract that was executed so it
will still be the same total sale price
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that we had negotiated. But as a buyer
obviously this can be heartbreaking.
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Buying on the resale market is not a
fast process, and to get through a vast
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majority of the process where you are
going through listings, trying to find
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your perfect contract, potentially
negotiating that contract, finally
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agreeing to something, and executing a
contract; and now you have to wait up to
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30 days for Disney to decide, and then if
they do exercise their right of first
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refusal it is just--whoosh--it's gone. So
you'll have to start this process all
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over again if you're serious about
wanting to buy DVC on the resale market.
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to my knowledge there has been no
official statement about why or when
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Disney Vacation Club executes their
right of first refusal. As best guess, we
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can pretty easily assume it has to do
with maintaining the value of Disney
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Vacation Club. For example, if the total
price you and I had agreed upon resulted
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in the price per point being very low
that would largely devalue the resort.
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And so it makes sense the Disney
Vacation Club would want to protect
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themselves against that sort of
devaluation and buy those points back
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themselves. Because now Disney Vacation
Club has those points and DVC is now
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able to sell those to people on their
waiting list. So these are people waiting
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to buy DVC direct from Disney for
certain resorts, and because they're
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going direct through Disney those
points are going to be sold at the
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direct rate--in this case that rate of
dollars per point is probably much higher
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than what you and I agreed on. However,
there certainly are instances where
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Disney Vacation Club executes their
right of first refusal but the contract
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was not a super low price. This may be
because Disney is simply looking have
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more points at that property to sell
directly. I'm sure there are many other
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reasons when and why Disney Vacation
Club decides to execute the right of
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first refusal, but ultimately only
they'll know. In my opinion, the most
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important reason is dealing with
protecting the perceived value of Disney
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Vacation Club. The Disney Vacation Club
write a first refusal buyback rate
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varies resort to resort and month-to-month.
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Generally speaking, it tends to hover
between about 5% and 15% of the total
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contracts sold on the resale market in
given month. If you want to dig into the
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details there's loads of data on forum
posts as well as websites; just Google
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something like Disney right of first
refusal buyback, or other similar terms.
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If you're curious about looking into
right a first refusal for the resort
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that you're interested in buying on the
resale market, I would encourage you to
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go look at this historical data. You can
generally find a lot of really
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interesting data including stuff like
the selling price of the contracts that
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were bought back. Ultimately, as a seller
or a buyer on the resale market you
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really have no control over right of
first refusal--that lies solely in the
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hands of Disney Vacation Club. But if
you're looking to buy a DVC contract on
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the resale market it's really good to
know about right at first refusal. Pack
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your patience during the resale process,
and know that if right of first refusal
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is executed it's nothing personal. The
waiting and the uncertainty while you're
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in that 30-day period waiting to see if
DVC is going to exercise this right or
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not is incredibly stressful, but do your
best to try not to waste too much of
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your energy on spiraling thoughts over
something you have no control over. If
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you found this information helpful
please consider liking the video and
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subscribing to the channel.
Ring the bell icon to get notifications
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whenever I post new videos. My goal is to
get to 100 subscribers by my birthday, so
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every interaction on this video will
really help me out, and I super
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appreciate it! If you want to chat with
me in more informal ways find me on
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Instagram and Twitter @PixieDustPhD.
Are you worried about right of first
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refusal at all? Or if you've experienced
DVC right or first refusal, let folks
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know in the comment down below how that
process went. I hope you're having a
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magical day, and we'll see you real soon
at Pixie Dust PhD!
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