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what is Right of First Refusal Fee?

timeos2

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Some resorts / systems, such as many Marriotts, have a onerous clause that the owner cannot sell to a new buyer without first getting clearance from the developer! As stupid as that sounds they try to make it seem like a benefit to owners (it is NOT) but it is a pain to deal with for both the seller and potential buyer. To add insult they charge for the "waiver" of that clause!

In general it is better to avoid any resort that has a ROFR OR, if you absolutely MUST have that resort then lowball your offer. Most likely in today's market it won't be used anyway (but would still apply to YOU when YOU eventually try to sell) and by offering a lower price you can at least partially make up for the cost & inconvenience it represents.

Because of ROFR you may be better off passing on the "deal" (as many do when they find out there is A ROFR - one of the many reasons it is a bad thing) in favor of just renting the resort(s) you desire. You will probably pay much less that way and have no need to deal with the ROFR as a buyer or seller.

You'll find many threads here on TUG about ROFR with differing opinions but university studys have shown it it a negative to all but the party that holds that right (and it's not you as buyer or seller!).

Avoid it & the costs.
 

sungandjudy

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I know what ROFR is, but am surprised that buyer now has to pay a fee when purchasing a TS. Why would I pay extra fee for this? What is the purpose of this fee? This was the first time that I actually saw a fee associated with ROFR. Of course I won't buy this TS but just wondering why the seller is asking the buyer to pay this fee...

Peter
 

DeniseM

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I know what ROFR is, but am surprised that buyer now has to pay a fee when purchasing a TS. Why would I pay extra fee for this? What is the purpose of this fee? This was the first time that I actually saw a fee associated with ROFR. Of course I won't buy this TS but just wondering why the seller is asking the buyer to pay this fee...

Peter

Because he can! ;)

Some sellers charge a fee to make reservations for the new owner, as well.
 

T_R_Oglodyte

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I know what ROFR is, but am surprised that buyer now has to pay a fee when purchasing a TS. Why would I pay extra fee for this? What is the purpose of this fee? This was the first time that I actually saw a fee associated with ROFR. Of course I won't buy this TS but just wondering why the seller is asking the buyer to pay this fee...

Peter

The purpose of the fee is:

1. To make more money for the developer by collecting the fee.

2. To discourage owners from trying to sell their units in the aftermarket, so that there is less competition for the developers own sales program.

3. To drive down the prices of units that are sold in the aftermarket so that when the developer does exercise ROFR the developer acquires the unit at an even lower price.
 

DeniseM

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Is the seller charging the ROFR fee, or is Marriott?
 

Talent312

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Apparently, this is a typical nuisance fee, which covers their time+trouble.
No way 'round it. But you could try to get the seller to pay it.
 
Last edited:

yumdrey

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Marriott charges $95 for ROFR waiver fee and $25 for transfer fee.
 

Ron98GT

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Marriott charges $95 for ROFR waiver fee and $25 for transfer fee.

The seller is collecting the ROFR fee and the transfer fee on behalf of the closing company, who will send the funds to Marriott.

If you want a Marriott (MGVC) or Hilton (HGVC) TS, ROFR is a way of life.

Although Marriott is only selectively using the ROFR (almost everything passes), they still want to collect the $95.

On the other hand, Hilton seems to be using the ROFR on every property, which is keeping the property values from dropping to $1 (bad for buyers, but good for sellers), although they are still dropping. Last time I checked, the average cost of a HGVC TS was about +- 50 cents per HGVC point, depending upon the property, demand, and the number of points.
 
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