ROFR and actual sale prices questioned

[sndral]

All makes total sense! One would think the sellers would be doing their own research and listing based on that instead of listening to brokers that make their money from commission.

In a falling market such as DVC resale has been, a seller may have done their research when they listed a couple of months ago & their price was in the ballpark then, but that was then & the market may have drifted down (or up) since then. Plus some sellers are pretty clueless financially, it may be as simple as they borrowed money to buy & need a certain price to avoid having to bring money to the table to sell & are hoping a naive buyer will come along.
One big brokerage reputedly owns a lot of contracts & if so, in addition to getting more commission on a sale they realize more profit on their contract flipping business if prices are higher.
Just keep making offers at the price you think is reasonable, no need to explain why or how you arrived at that price to the agent, but you can easily do an analysis for the resort you’re interested in using the search feature on the OC recorder site & when the agent says they haven’t seen numbers that low in years respond w/, oh, I based my value assessment on the registered deeds from the last month which showed there were 30 sales at resort abc, the low was $X per point the median was $Y per point, I guess your brokerage didn’t handle those.
It‘s a numbers game, you keep making offers until you find the seller willing to accept your offer.

 

[MsChristy12]

Don't let the broker "educate" you. For them to insinuate that we are lying here is mind boggling! Those agents are counting on buyers that aren't as educated to believe them, so they will give in on a higher offer. Also, a lot of buyers right now that are still looking don't necessarily need a contract either (myself included). We are looking for add-ons and for me, if I end up not getting what I want before ROFR monster wakes up or prices go back up, oh well!

Whatever the agents say, don't let it get to you. You pay the price that you think it's worth it TO YOU. Back in April, I had one agent told me I'm not gonna find any contracts for the price I want because the sellers know how much their contracts are worth, they won't go lower than a few bucks below listing price. HA! Guess what...2 weeks later, I found my contract within the range I was willing to pay. However, IF you find your own unicorn contract that you have been waiting for awhile, and you don't want to wait any longer, then maybe it's worth it to pay a little more.

Good luck to you!! You will find one!!

 

[Artemis Fowl]

No, I’ve been watching the Disboards posted forum on offers that have not been taken by ROFR and therefore sold seller to buyer. I’ve logged the sales, banked points, etc, and gotten an avg per point price. I’ve based my offers on this information and they’ve been rejected through two different resale companies presenting them to their sellers. Just curious how it seems so many people are getting these phenomenal deals (that they are saying the got based on the required information on the post) and the agents I’m submitting through are basically laughing at me saying they’ve never sold one this low in years. Basically someone is lying and I’m just trying to figure out if I’m wasting my time tracking and making offers.

There has to be a big difference in the number of contracts sold versus reported here. Maybe only the best deals get posted here because the buyer wants to brag?

Maybe the ROFR reports are just lucky people, but I agree with your sentiment that the selling/asking prices shoudn't be that far away from the ROFR reports unless the buyers are somewhere between knowing that resale is cheaper than direct yet not knowing ROFR threads exist.

 

[elenex]

Deals posted in the ROFR thread are generally on the low end of average because anyone posting there is well educated on DVC resale prices, and for every one of those contracts there are probably 5 more bought by non -DIS buyers. I'm also sure some posters fudge the numbers, but I don't understand what motivation there is to do so and believe this to be an extremely low percentage.

Basically, both are right. ROFR thread numbers are on the low end of current sales figures, and that particular broker may not have sold a contract as low as the thread indicates. But that doesn't mean those sales did not take place, not does it mean if you move on to other opportunities you won't land a similar deal. It also doesn't mean you'll match the best deal. It's also a very strange time for the market as Disney has stepped away from buying back contracts due to budget constraints, and since Disney isn't doing it, the brokers have an obligation to their seller's to try and keep prices up and sell as high as possible.

Just be patient, make a lot of offers, ignore the pompous brokers and gravitate towards the helpful ones, and watch market trends.

 

[Sandisw]

That’s what I’m trying to figure out. Because the agents are basically laughing at me while telling me they’re required to submit my offer.

Just remember that a broker is only using their own data to support the statement that offers here may not be accurate.

And, through them and the contracts they have sold, maybe it’s true.

But, I do not believe that what people post here is not a valid sale as there is no reason to do that.

We have always just decided on a price we thought was fair and offered until a seller who agreed with our number accepted

While I did pay attention to this thread, I was never concerned about what others were paying to the degree that I offered around that if I paid more for a contract I wanted.

 

[lilsonicfan]

There has to be a big difference in the number of contracts sold versus reported here. Maybe only the best deals get posted here because the buyer wants to brag?

I really don't think it's buyers wanting to brag. I never got the sense that the ROFR threads over the years have been about scoring the best deals, but what we do all need to realize is that Disney hasn't been using ROFR for months now and the picture for sellers has changed. Prices are going to drop, generally speaking, if Disney isn't buying the contracts back.

 

[stevehudd]

Resale buyers who don’t do research certainly exist and pay way higher than they should.

However, most low information buyers buy direct.

I bet there is almost no lying on the ROFR board. Just my opinion. The brokers certainly fudge things a bit when talking to potential buyers. Its the same behavior from all sales people. I communicated with four different brokers this past weekend and all were great. No one was mean or inappropriate.

 

[elenex]

There's also a luck (luck/diligence?) element as well. One morning a seller dumped all his contracts on one site and a bunch of us scored OKWe for $90pp and OKW for $80pp without having to negotiate, but if you were not looking at the right place at the right time, they were gone in a few hours.

 

[RuntheMouse]

There has to be a big difference in the number of contracts sold versus reported here. Maybe only the best deals get posted here because the buyer wants to brag?

Maybe the ROFR reports are just lucky people, but I agree with your sentiment that the selling/asking prices shoudn't be that far away from the ROFR reports unless the buyers are somewhere between knowing that resale is cheaper than direct yet not knowing ROFR threads exist.

I don‘t think people are posting their deals to brag, they’re data points. Everyone of us who used that thread are paying it forward with that data. I got a great deal on one of my contracts, a pretty good deal on another and two that were mediocre at best, but I shared each and every one of them because that info is helpful. OP seems focused only on those incredible deals and may be overlooking the others that are included in that ROFR thread as well.

It boils down to this, you either find the perfect contract that may not be a screaming deal or you wait it out for that deal. In the grand scheme paying a few extra dollars per point isn’t terrible if it gets you a good fit. I was happy to get my first contract and start vacationing, using points rather than cash was the true deal!

 

[HyperspaceMountainPilot]

I personally scored two contracts (BCV stripped of 2023 points at $115, and VGF with loaded points at $150) that several brokers told me were "way below market" and/or they were "told by sellers they wouldn't consider etc., would I like to make a higher offer?" I just wrote those brokers back to say that I didn't need to buy, I'd seen similar sales, and I was looking for a motivated seller, and if their seller holding out for 20-30% more than I wanted to pay became more motivated, to please reach out. Hard to believe people are lying on ROFR, much more likely that brokers are deeply motivated not to believe that many sellers are willing to sell for lower than they personally can sell.

As mentioned above, it appears that at least a couple brokers are personally holding a lot of contracts (and presumably have a significant debt against those contracts) that they purchased at higher prices and I suspect they are really reluctant to let the market drift downward where they would be underwater on the loans. I get a few emails each morning and chuckle when I see that some brokers are still listing VGF resale (sometimes stripped!) at $10-30/point MORE than you can currently buy direct. I thought my resale VGF (that many brokers balked at) was a good deal 2 months ago, but now it's only a hair below direct... and I wouldn't buy at that rate and would go direct with magical beginnings instead. Don't let anybody bully you into paying more than you think is fair, but (as others have noted) if you have very specific requirements, at a certain point, you may find it's worth pay a few dollars more per point than spending hours each week negotiating and losing contracts.

 

[RachStu]

I think it can be explained by just Disboarders being more likely to aggressively negotiate due to additional market knowledge.

However, I did see a spectacular deal back in 2020 and was not able to find that on occompt site, so maybe 1 or 2 per year are inaccurate.

Maybe they pulled out? We got through ROFR on a loaded PVB contract in 2020. We had to pull out at the last minute as we had a call on our mortgage on our holiday home. I’m sure there must be some people who pass ROFR but never actually close.

 

[stevehudd]

I personally scored two contracts (BCV stripped of 2023 points at $115, and VGF with loaded points at $150) that several brokers told me were "way below market" and/or they were "told by sellers they wouldn't consider etc., would I like to make a higher offer?" I just wrote those brokers back to say that I didn't need to buy, I'd seen similar sales, and I was looking for a motivated seller, and if their seller holding out for 20-30% more than I wanted to pay became more motivated, to please reach out. Hard to believe people are lying on ROFR, much more likely that brokers are deeply motivated not to believe that many sellers are willing to sell for lower than they personally can sell.

As mentioned above, it appears that at least a couple brokers are personally holding a lot of contracts (and presumably have a significant debt against those contracts) that they purchased at higher prices and I suspect they are really reluctant to let the market drift downward where they would be underwater on the loans. I get a few emails each morning and chuckle when I see that some brokers are still listing VGF resale (sometimes stripped!) at $10-30/point MORE than you can currently buy direct. I thought my resale VGF (that many brokers balked at) was a good deal 2 months ago, but now it's only a hair below direct... and I wouldn't buy at that rate and would go direct with magical beginnings instead. Don't let anybody bully you into paying more than you think is fair, but (as others have noted) if you have very specific requirements, at a certain point, you may find it's worth pay a few dollars more per point than spending hours each week negotiating and losing contracts.

The magical beginnings discount is a game changer even if that check counts as 1099 income. The overpriced stripped contracts are really insulting and that practice needs to stop.

 

[crisi]

Right???? What is the motivation to lie on here outside of a thumbs up or star eyed emoji ? Their motivation to lie is money.

So the economist behind Freakonmics said that a little more commission isn't motivating for real estate agents - the sale now is a bigger deal than getting a little more in commission at some time in the future. And psychologists have showed over and over that getting thumbs ups and likes on social media - even if its anonymous - is a huge motivator and will cause people to lie and exaggerate. Its counterintuitive - you'd think real estate agents would have more motivation towards profit and people wouldn't give a fig about internet likes from anonymous strangers - but it turns out, you'd be wrong.

 

[HyperspaceMountainPilot]

So the economist behind Freakonmics said that a little more commission isn't motivating for real estate agents - the sale now is a bigger deal than getting a little more in commission at some time in the future. And psychologists have showed over and over that getting thumbs ups and likes on social media - even if its anonymous - is a huge motivator and will cause people to lie and exaggerate. Its counterintuitive - you'd think real estate agents would have more motivation towards profit and people wouldn't give a fig about internet likes from anonymous strangers - but it turns out, you'd be wrong.

So putting aside that many sociologists have criticized the research/conclusions put forth by the economists behind Freakonomics, I do agree with you that making an extra $100 or even $1000 by charging a higher price is not worth it for real estate agents. But with DVC, multiple brokers personally own the contracts so they are not real estate agents they are the owners, who usually do want to hold out for money if they think there is any chance of getting it, and if they bought them more than a few months ago, they may be underwater. Also, if a broker holds millions of dollars of points, and those points are tied to debt covenants, selling any contract below a certain price threshold could trigger a revaluation on all points tied to that property, leading to significant (catastrophic) consequences where the lender could call the loans due.

 

[stevehudd]

So putting aside that many sociologists have criticized the research/conclusions put forth by the economists behind Freakonomics, I do agree with you that making an extra $100 or even $1000 by charging a higher price is not worth it for real estate agents. But with DVC, multiple brokers personally own the contracts so they are not real estate agents they are the owners, who usually do want to hold out for money if they think there is any chance of getting it, and if they bought them more than a few months ago, they may be underwater. Also, if a broker holds millions of dollars of points, and those points are tied to debt covenants, selling any contract below a certain price threshold could trigger a revaluation on all points tied to that property, leading to significant (catastrophic) consequences where the lender could call the loans due.

This is the confounder keeping prices stickier than they should be. Otherwise, brokers would be pushing their clients to price contracts based on current market rates vs having so many listings sit for months. I have no idea why Disney does not crack down on commercial ownership.

 

[stevehudd]

So the economist behind Freakonmics said that a little more commission isn't motivating for real estate agents - the sale now is a bigger deal than getting a little more in commission at some time in the future. And psychologists have showed over and over that getting thumbs ups and likes on social media - even if its anonymous - is a huge motivator and will cause people to lie and exaggerate. Its counterintuitive - you'd think real estate agents would have more motivation towards profit and people wouldn't give a fig about internet likes from anonymous strangers - but it turns out, you'd be wrong.

People posting on the ROFR thread aren't really pursuing traditional social media cred.

 

[HyperspaceMountainPilot]

People posting on the ROFR thread aren't really pursuing traditional social media cred.

Are you telling me there's no way to monetize my 30 likes on my ROFR posts?

 

[HyperspaceMountainPilot]

This is the confounder keeping prices stickier than they should be. Otherwise, brokers would be pushing their clients to price contracts based on current market rates vs having so many listings sit for months. I have no idea why Disney does not crack down on commercial ownership.

One reason they may not want to crack down is that it benefits Disney to keep the prices from dropping rapidly to fair market value-- if you could easily buy VGF at $130 for a normal contract, presumably fewer people would pay $160+ to Disney, let alone its normal non-promotional pricing. Essentially Disney has stopped spending any money on ROFR and are shifting a lot of the costs to these large brokers who buy contracts when they can find sellers who wanted to unload them below their public pricing and then discourage their own selling clients from selling below their internal (higher) market price metrics.

 

[stevehudd]

Are you telling me there's no way to monetize my 30 likes on my ROFR posts?

You would not believe it, but cheap skates trying to get the best deal on a timeshare resale don't have much value to advertisers.

 

[stevehudd]

One reason they may not want to crack down is that it benefits Disney to keep the prices from dropping rapidly to fair market value-- if you could easily buy VGF at $130 for a normal contract, presumably fewer people would pay $160+ to Disney, let alone its normal non-promotional pricing. Essentially Disney has stopped spending any money on ROFR and are shifting a lot of the costs to these large brokers who buy contracts when they can find sellers who wanted to unload them below their public pricing and then discourage their own selling clients from selling below their internal (higher) market price metrics.

Disney always has a reason for what they do, and they probably ran some algorithm that ended up recommending what you laid out in this statement. I just can't imagine they were spending THAT much money on ROFR. I am sure someone here knows the exact amount they spend annually.