What is ROFR, and why is it a good thing?

Discover Disney's Right of First Refusal (ROFR) in the DVC Resale Market

The Disney Vacation Club (DVC) is a unique timeshare program that offers flexibility and a range of vacation options for its members. One of the key aspects of the DVC resale market is Disney's Right of First Refusal (ROFR). Understanding ROFR is crucial for both buyers and sellers in the DVC resale market, as it plays a significant role in the transaction process.

What is Right of First Refusal (ROFR)?

Right of First Refusal, commonly referred to as ROFR, is a contractual right that gives Disney the option to purchase a DVC contract from a seller before it is sold to a third party. When a DVC owner decides to sell their contract, Disney has the opportunity to match the offer made by a potential buyer. If Disney exercises this right, they purchase the contract under the same terms agreed upon by the seller and the buyer.

Why Does Disney Have ROFR?

Disney's ROFR serves several purposes:

• Maintaining Brand Value: By exercising ROFR, Disney can control the resale market to some extent, ensuring that the value of DVC contracts remains stable. This helps protect the brand's reputation and the perceived value of owning a DVC membership.
• Controlling Inventory: ROFR allows Disney to reacquire contracts, which they can then resell directly to new buyers. This enables Disney to manage their inventory and potentially offer more attractive options to prospective members.
• Protecting Existing Members: By keeping resale prices within a certain range, Disney helps protect the investment of current DVC members, ensuring that their contracts retain value over time.

How Does ROFR Affect Buyers and Sellers?

For Sellers

For sellers, ROFR means that any offer they receive on their DVC contract must be submitted to Disney for consideration. If Disney decides to exercise their ROFR, the seller will complete the sale with Disney instead of the original buyer. While this might seem like a hurdle, it can actually be beneficial as it guarantees the seller a completed transaction at the agreed-upon price, assuming Disney exercises their right.

For Buyers

Buyers need to be aware that their offer on a DVC contract could be subject to ROFR. If Disney exercises their right, the buyer will not be able to purchase that specific contract. However, this process can also be seen as a form of quality control, as Disney's involvement helps ensure that the contracts available on the resale market meet certain standards.

Practical Tips for Navigating ROFR

For Sellers

• Set a Competitive Price: Pricing your contract competitively can make it less likely for Disney to exercise ROFR, as they may not see the need to intervene if the price aligns with market value.
• Work with Experienced Brokers: Partnering with a knowledgeable DVC resale broker can help you understand the likelihood of Disney exercising ROFR on your contract and guide you through the process.

For Buyers

• Be Prepared for ROFR: Understand that any offer you make could be subject to ROFR. Have a backup plan in case Disney decides to purchase the contract.
• Consider Multiple Offers: If you're set on purchasing a DVC contract, consider making offers on multiple contracts to increase your chances of securing one, even if Disney exercises ROFR on one of them.

Conclusion

Disney's Right of First Refusal is an integral part of the DVC resale market, offering benefits to both Disney and DVC members. While it may add an extra step to the buying and selling process, understanding ROFR and how it works can help you navigate the DVC resale market more effectively. Whether you're a buyer or a seller, being informed and prepared can lead to a successful transaction and a rewarding experience with Disney Vacation Club.