Signing Before ROFR: What DVC Sellers Should Know

Signing Before ROFR: What DVC Sellers Should Know

DVC resale transactions require sellers to sign contracts before the Right of First Refusal (ROFR) review occurs. Understanding this process helps sellers know what to expect and what their obligations are at each stage. This article outlines the key steps in the DVC resale process, focusing on the importance of signing before ROFR and the implications for sellers.

The Contract Signing Sequence

In DVC resale transactions, contract signing occurs before ROFR submission. After agreeing on terms with a buyer, both parties sign purchase contracts documenting the sale terms. Only after contracts are fully executed does the transaction go to Disney for ROFR review. This sequence means sellers commit to the sale before knowing whether Disney will exercise their right. Understanding this order helps sellers make informed decisions about accepting offers.

What You Are Signing

The purchase contract documents the agreed terms including price, point allocation, closing timeline, and responsibilities of each party. By signing, you agree to sell your contract at the specified price if the transaction proceeds through ROFR and closing. Review all terms carefully before signing. Ensure the price, point status, and other details accurately reflect your agreement with the buyer. Ask questions about anything unclear before committing your signature.

Binding Nature of the Agreement

Signed contracts create binding obligations between buyer and seller. While ROFR may ultimately determine whether the sale completes, your commitment to sell at the agreed terms is established through signing. Backing out after signing can have legal and financial consequences. Consider your commitment carefully before signing. If you are uncertain about selling, resolve those doubts before accepting offers.

What Happens After Signing

After both parties sign, your broker submits the transaction to Disney for ROFR review. Disney then has up to 30 days to decide whether to purchase your contract at the agreed price or waive their right. During this waiting period, your contract remains committed to the transaction. You cannot accept other offers or withdraw from the sale without potential consequences.

If Disney Exercises ROFR

If Disney exercises ROFR, they purchase your contract at the agreed price. You receive the same proceeds you would have received from the original buyer. The only difference is that Disney becomes the purchaser instead. ROFR exercise is not negative for sellers financially. You still sell at your agreed price. The original buyer is disappointed, but your outcome is the same either way.

If ROFR Is Waived

If Disney waives ROFR, the transaction proceeds to closing with the original buyer. Your obligations continue through the closing process, including signing the deed and other closing documents. After closing completes, you receive your proceeds minus any commissions and fees. Your DVC ownership officially transfers to the buyer, ending your membership obligations.

Electronic Signing Options

Many resale transactions now offer electronic signing through platforms like DocuSign. These allow you to sign contracts remotely without printing physical documents. Electronic signatures are legally binding and speed the signing process. If you prefer physical signatures or your transaction requires notarization, discuss these needs with your broker. Various signing methods can accommodate different preferences and requirements.

Timeline Considerations

Prompt signing keeps your transaction moving forward. Delays in signing extend the overall timeline and may frustrate buyers. Respond to signing requests within the timeframes specified in your agreements. If circumstances prevent timely signing, communicate with your broker immediately. They can manage expectations with the buyer's side while you address any issues.

Preparing for Signing

Have identification ready as required for the signing process. Review documents in advance if provided as drafts. Ensure you understand all terms before the signing session. Being prepared allows smooth, efficient completion of this important transaction milestone.

• Ensure all personal information is accurate and up-to-date on the contract.
• Understand the implications of each clause in the agreement.
• Discuss any concerns with your broker to ensure clarity and confidence in the process.

In conclusion, signing before ROFR is a critical step in the DVC resale process that requires careful consideration and understanding. By being well-informed and prepared, sellers can navigate this process smoothly and achieve a successful transaction.