# ROFR exercise at WMH



## Fredm (Sep 15, 2010)

WMH Annual Platinum Season exercised at $6,000.


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## Ken555 (Sep 15, 2010)

I suppose they must have a buyer... thanks for the update, Fred!


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## LisaRex (Sep 15, 2010)

They recently sent me a Preview offer for WMH, so perhaps they're using WMH as a guineau pig to get back into active sales at "sold out" resorts, since they're not building new ones.  WMH is a good place to start because the resale prices are so incredibly low, so it won't take them much outlay of capital to buy back a few.  If they sell just one of them at the incredible mark-up they charge, then they'll have made a nice profit!

I just wish they'd focus on buying back delinquent units for new inventory instead of exercising ROFR on in-process sales!


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## Fredm (Sep 15, 2010)

Ken555 said:


> I suppose they must have a buyer... thanks for the update, Fred!



I was surprised because they are actively selling Desert Willow.
Yes, they must have a buyer. Possibly an existing owner.


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## jeff01 (Sep 15, 2010)

I guess the going to exercise ROFR on these 2 as well. . . Annual, 2 Bed, Platinum - $595 & $1,009, respectively.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=260658459748&ssPageName=STRK:MEWAX:IT

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=260657955378&ssPageName=STRK:MEWAX:IT


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## jerseygirl (Sep 15, 2010)

Or they could be just toying with someone who recently bought developer and rescinded.  Fred - did your buyer have a history with Starwood?


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## Fredm (Sep 15, 2010)

I really don't think Starwood plays that game.

Sales take place at the resort level. 
ROFR reviews are handled in Orlando.


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## jerseygirl (Sep 15, 2010)

Good to know ... But recissions are handled in Orlando too, right?!  I'm not accusing - have heard of other developers doing it so just thought ....hmmm ....maybe


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## DanCali (Sep 15, 2010)

They allegedly ran out of Platinum Plus weeks at WDW in the current phase. Offering a buyer who wants/insists on a 1-21 season a WMH week is not a bad alternative. In fact, it's probably the WMH salespeople who now sell WDW so I'm sure they can tout both resorts equally well...


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## rickandcindy23 (Sep 15, 2010)

I hope they start ROFR on all of the Sheraton weeks.  :rofl: 

There is a cousin of mine who will buy my weeks.   

If you have purchased WMH recently for a bargain price, just think of the benefits of ROFR.  

Yes, I know Starwood doesn't have ROFR on the Sheratons, but just think of the possibilities.


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## Fredm (Sep 18, 2010)

jerseygirl said:


> Good to know ... But recissions are handled in Orlando too, right?!  I'm not accusing - have heard of other developers doing it so just thought ....hmmm ....maybe



The timing of the rescission will determine where it is handled.
If made before the transaction is forwarded to Orlando, it will be net out locally.
It really is an inventory control exercise..

I don't place much stock in the conspiracy theories about ROFR.
It just does not make sense to me. It is a business decision.
A developer is not going to spend money simply to extract some kind of anonymous revenge on a lost buyer. Never mind the effort involved in tracking and matching the information.


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## jerseygirl (Sep 18, 2010)

Ah, you're probably right . . . but I believe every evil thing is possible with this group!


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## RLOGO (Sep 18, 2010)

rickandcindy23 said:


> I hope they start ROFR on all of the Sheraton weeks.  :rofl:
> 
> There is a cousin of mine who will buy my weeks.
> 
> ...



In the last month WKORV-S 1 BR Ocean view EY passed ROFR $9200


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## Fredm (Sep 20, 2010)

RLOGO said:


> In the last month WKORV-S 1 BR Ocean view EY passed ROFR $9200



 FWIW, I am not aware of any ROFR exercises at South.


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## RLOGO (Sep 20, 2010)

Fredm said:


> FWIW, I am not aware of any ROFR exercises at South.



Starwood sent a letter out stating that they declined to exercise their ROFR.


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## l2trade (Sep 20, 2010)

ROFR is not surprising to me here.  Starwood needs enough platinum & whole inventory available (i.e. - 2BD annual), to be able to effectively market all the lesser seasons and smaller pieces at WMH.  Add Desert Willow active marketing into the mix and there's an even greater incentive to have a balanced inventory for that area.

It is my guess that Starwood finds itself in a similar position to where Marriott was pre-points.  It is my guess that Starwood's available inventory selection is unbalanced.  I've been to enough presentations to see that the sales reps try to start from the top (2BD annual, platinum) and work their way down until they eliminate the monthly payment complaints.  Can't do that effectively if all you got are pieces.  For example, some folks need the sticker shock of a fully loaded car before they can drive off smiling in a stripped down, base model version.


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## Fredm (Sep 20, 2010)

RLOGO said:


> Starwood sent a letter out stating that they declined to exercise their ROFR.



Yes, I mean that they have not "bought" any weeks via ROFR at South.
They always exercise their prerogative to decline or purchase.

The common use of the word "exercise" relates to a decision to purchase.


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## RLOGO (Sep 20, 2010)

Fredm said:


> Yes, I mean that they have not "bought" any weeks via ROFR at South.
> They always exercise their prerogative to decline or purchase.
> 
> The common use of the word "exercise" relates to a decision to purchase.



Got it.  Thanks


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## thomasro3 (Sep 20, 2010)

My owner resale was purchased around $8k at WMH. if memory serves.  The sales office for Desert Willows was at WMH but the said that they were probably going to move to Desert Willows.  I don't know they may have a sales office @ both.


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## Pindento (Sep 20, 2010)

*What does ROFR mean to a bidder/buyer on resale?*

Depending on who you're dealing with on the closing, do you end up waiting on the recoup of funds?  Are there any fees that can be permanently lost?


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## yumdrey (Sep 20, 2010)

You will get full refund for the purchase price, but it take some time. Closing co. should get fund from developer and it can take more than 2 months sometimes. As a buyer, you need to make sure before purchase if you are getting full refund or not.



Pindento said:


> Depending on who you're dealing with on the closing, do you end up waiting on the recoup of funds?  Are there any fees that can be permanently lost?


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## SDKath (Sep 20, 2010)

thomasro3 said:


> My owner resale was purchased around $8k at WMH. if memory serves.  The sales office for Desert Willows was at WMH but the said that they were probably going to move to Desert Willows.  I don't know they may have a sales office @ both.



They do because WMH guests are prime targets of advertising for WDW.  They have a large office upstairs from check in at WMH with a huge model of WDW right there...  I think they have a movie screening room and everything.  

Kath


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## Fredm (Sep 20, 2010)

Pindento said:


> Depending on who you're dealing with on the closing, do you end up waiting on the recoup of funds?  Are there any fees that can be permanently lost?



Deposit funds should be immediately refunded if an ROFR is exercised.

Nor should you incur any closing costs if purchasing through a reputable broker. The closing agent should provide the initial services of ordering the estopple and ROFR submittal  as part of their service to the broker if ROFR is exercised.  Title search and other billable services should only be ordered when ROFR waiver is in hand.

YMMV depending on who you do business with.  Ask in advance.


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## Pindento (Sep 23, 2010)

New to researching timeshares, so this may just be an ignorant question ...

... I'm also not sure how widespread this info gets out to the potential resale bidders, but does this tend to reduce the bidding on resales for people doing their research on TUG and related sites?

I mean, what's the point bidding on what seems to be a "good deal" on an eBay listing for anything less that $6K then if the rumor's out that it's likely to be exercised.

If the potential market is aware of this, wouldn't that reduce the bidding activity and only give SVO a lower price to exercise at?  or do they have some cellar dollar amount that they have to pay the seller in order to exercise?

If not, unless the seller has a "cousin" (something joked about earlier) that can bid up the price, looks like this just helps SVO's cause at yet another detriment to current owners that are looking to sell.

Am I paranoid  ... seems like the general sentiment on this board might justify some paranoia


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## DeniseM (Sep 23, 2010)

In this economy, ROFR is rare.  I wouldn't give it a second thought if I was looking to buy.  Also, only a few resorts have ROFR - see the list in SW Owner Resources at the top of the forum.


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## nodge (Sep 28, 2010)

Fredm said:


> The closing agent should provide the initial services of ordering the estopple and ROFR submittal  as part of their service to the broker if ROFR is exercised.



So what happens if the closing agent (or the owner of a ROFR timeshare) doesn't bother with submitting a ROFR request to Starwood and instead just goes ahead and transfers/records ownership in the name of the buyer?

Can Starwood force the new owner/buyer to re-transfer ownership to Starwood or does Starwood just have a claim against the old owner for failing to comply with his or her ROFR obligations?

-nodge


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## LisaRex (Sep 28, 2010)

nodge said:


> So what happens if the closing agent (or the owner of a ROFR timeshare) doesn't bother with submitting a ROFR request to Starwood and instead just goes ahead and transfers/records ownership in the name of the buyer?



You can't sneak anything past Starwood because they have to record the new owner, etc.


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## yumdrey (Sep 28, 2010)

nodge said:


> So what happens if the closing agent (or the owner of a ROFR timeshare) doesn't bother with submitting a ROFR request to Starwood and instead just goes ahead and transfers/records ownership in the name of the buyer?
> 
> Can Starwood force the new owner/buyer to re-transfer ownership to Starwood or does Starwood just have a claim against the old owner for failing to comply with his or her ROFR obligations?
> 
> -nodge



Starwood can void the sale and take buyer's ownership back or buyer/seller start process all over again from submitting ROFR waver letter.
When they change owner's name in the system, they check if there is a ROFR waver letter (if resort have ROFR) and new deed.
I have heard that some (ebay) sellers tried illegal way to avoid ROFR and got fined and lost good standing with system/resort.


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## jarta (Sep 28, 2010)

nodge,   ...   "Can Starwood force the new owner/buyer to re-transfer ownership to Starwood or does Starwood just have a claim against the old owner for failing to comply with his or her ROFR obligations?"

No waiver of ROFR in the file when Jose looks for it; no reservations for the "new owner."

The proper next step (assuming the "new owner" will not respond and/or will not quit claim title to Starwood) is an action to quiet title seeking an order saying Starwood is the new owner and in the chain of title.   ...   eom


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## Fredm (Oct 4, 2010)

nodge said:


> So what happens if the closing agent (or the owner of a ROFR timeshare) doesn't bother with submitting a ROFR request to Starwood and instead just goes ahead and transfers/records ownership in the name of the buyer?
> 
> Can Starwood force the new owner/buyer to re-transfer ownership to Starwood or does Starwood just have a claim against the old owner for failing to comply with his or her ROFR obligations?
> 
> -nodge



nodge, sorry for the delayed reply. Been sidelined for the past couple of weeks.

Starwood can invalidate the sale at any time. 
As others have already mentioned, it would be useless to the buyer without the ROFR waiver, in any case.

The risk to the buyer is that if Starwood invalidates the sale, the seller has the money.
A professional closing agent would not disburse funds to the seller until Starwood has acknowledged the update of its owner records (which it would not do without the ROFR waiver).


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## nodge (Oct 4, 2010)

Fredm said:


> nodge, sorry for the delayed reply. Been sidelined for the past couple of weeks.
> 
> Starwood can invalidate the sale at any time.
> As others have already mentioned, it would be useless to the buyer without the ROFR waiver, in any case.
> ...



Thanks Fred and others.  

How about this then?

Can the parties "beat" ROFR by coupling an action (which I think you lawyers out there call. . . "specific performance") to the deal where that action ("specific performance") can only be performed by the parties to the transaction and certainly not by a large, faceless, corporation in Orlando?

For example, if the parties know each other (i.e. are co-workers) and one day an owner is sitting around drinking coffee with his co-worker instead of working and he agrees to sell his WMH timeshare to that co-worker for $1000 *AND that co-worker agreeing to work the graveyard shift for the owner for the next month. * Would it pass ROFR simply because SVO can't perform all the terms of the agreement (... wherewithallwithwhich, aforementioned, ipso facto, res ipsa, party of the first part, party of the second part, et al.)?

Just wondering . . . . ..

-nodge

I digress, but speaking of co-workers, just to add a little intrigue to the mix, what if they AREN’T just co-workers, but the seller is a BOSS and the buyer is an employee that reports to that boss, and the employee really doesn’t want the timeshare or to work graveyard, but thinks he should go through with it anyway just to earn points with the boss? 

Such a situation happens everyday in offices across our nation by bosses who bring boxes of their kid’s baseball/soccer/girl scout/school candy/cookies to sell.  You know what I’m talking about.  The boss leaves the overpriced stuff outside their office door and expects everyone to buy it.  And everyone dutifully buys something, but only when the boss is looking, thereby making it difficult to time the face-time portion of the transaction properly.   Hey bosses of the world, no wonder your workers are busy trying to unload their timeshares during business hours. 

. . . and what's the deal with companies that have to sell their products through such dubious means? . . .. -n

(Guess who's dieting again . . . . )


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## duke (Oct 4, 2010)

Starwood recently purchased 223 foreclosed units from the HOA at WMH.  I think they are building up inventory for their sales office by purchasing ROFR.







September 24, 2010

Dear Fellow Westin Mission Hills Villa Owners,

The current economic downturn has affected all of us in some way but for some of our owners it has adversely affected their ability to pay their annual maintenance fees. In order to preserve the ambiance and integrity of the facility and the value of our investment, we have been forced to increase the maintenance fees for 2010 to make up the cash shortfall. Your Board has worked with our Managing Agent, Starwood Vacation Ownership, Inc. (“Starwood”), to reduce operating costs wherever possible and feasible. We have also vigorously pursued delinquent accounts through proper legal and other means and have completed the foreclosure of 223 vacation ownership interests (“intervals”).

Through the foreclosure process we have therefore obtained title to these intervals and have been evaluating alternatives for reselling them. Our stated goal has been to get these foreclosed intervals into the hands of owners who will pay their maintenance fees. We are pleased to announce that effective September 10, 2010 we concluded a purchase agreement with Starwood that meets this goal. The agreement provides for the following:

    * The purchase price for the 223 intervals is approximately $335,982. Starwood will pay the Association’s cost of foreclosing and acquiring title to the intervals, not to exceed $1,000 per interval.
    * Starwood will be responsible for the maintenance fees due on these intervals beginning January 1, 2011.
    * Starwood has exclusive rights to market/sell any intervals owned by the Association through December 31, 2011.

The funds from this agreement have enabled us to recover much of the cash shortfall in 2009 and will have a positive influence on the 2011 budget.

We hope you have had a pleasant summer and look forward to seeing you at the annual meeting, December 14, 2010.

Your Board of Directors


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## YYJMSP (Oct 4, 2010)

duke said:


> The purchase price for the 223 intervals is approximately $335,982. Starwood will pay the Association’s cost of foreclosing and acquiring title to the intervals, not to exceed $1,000 per interval



So it sounds like SVO purchased the units for the cost of the unpaid MFs (i.e. $336K / 223 units = ~$1500/unit), plus paperwork up to $1000/unit?


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## LisaRex (Oct 4, 2010)

Shouldn't the HOA be reimbursed for past due MFs as well?   When I inquired as to why owners had to pay for non-performing owners, Starwood assured me that when the unit was sold, all past due MFs would be collected and reimbursed to the HOA.


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## YYJMSP (Oct 4, 2010)

LisaRex said:


> Shouldn't the HOA be reimbursed for past due MFs as well?   When I inquired as to why owners had to pay for non-performing owners, Starwood assured me that when the unit was sold, all past due MFs would be collected and reimbursed to the HOA.



I would assume/hope so -- when you buy a unit resale, you're forced to make all MFs current on the unit.

This should "undo" any part of the previous year(s) MF increases that were due to past-due MFs due to those 223 units, right?

I'm really hopeful that SVO will do the same at the other properties (I don't own specifically at WMH), and we'll get a reduction in 2011 or 2012 MFs...


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## Fredm (Oct 4, 2010)

nodge said:


> Thanks Fred and others.
> 
> How about this then?
> 
> ...



Well, at the very least it would complicate the review process, and delay the sale.
The question then becomes why would the seller agree to it?
Under normal circumstances the seller would not care who the buyer is, so long as they got the amount agreed to.  Even if it worked, complicating the review process, delaying the closing, etc. is not in the sellers interest.  They would just want the money from the sale.


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## jarta (Oct 4, 2010)

LisaRex and YYJMSP,   ...   When the property is foreclosed due to delinquent MF, the lien for the MF is extinguished.  The reason for this is to give the property free and clear to the HOA so that it can sell it (as it did) free and clear to someone else.

The personal responsibility of the prior owner for the MF still exists.  However, most of the delinquents are far, far away from the jurisdiction of the resort.  To enforce the personal liability, an action would need to be filed against the prior owner for the amount of the delinquent MF.  The State in which the resort is located is not the proper venue for the suit.  The State in which the prior owner resides is the proper venue for this personal action.

Chasing delinquents to another farwaway State is not worth the filing fees and the attorney fees and the garnishment proceedings thereafter to seize property of the debtor.  It would be an exercise in futility.   ...   eom


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## YYJMSP (Oct 4, 2010)

jarta said:


> LisaRex and YYJMSP,   ...   When the property is foreclosed due to delinquent MF, the lien for the MF is extinguished.



Rats, I was hopeful...

Thanks for the comment jarta!


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## nodge (Oct 6, 2010)

Fredm said:


> Well, at the very least it would complicate the review process, and delay the sale.
> The question then becomes why would the seller agree to it?
> Under normal circumstances the seller would not care who the buyer is, so long as they got the amount agreed to.  Even if it worked, complicating the review process, delaying the closing, etc. is not in the sellers interest.  They would just want the money from the sale.



Thanks Fred,

Isn’t there a mandatory time limit for SVO to exercise its ROFR or it is deemed waived?

Here is my understanding of SVO’s ROFR so far:

I understand that people wanting to sell their timeshares want to do so quickly, but that in cases where SVO does exercise its ROFR, it takes its sweet time in actually performing its end of the deal, thereby making the seller and the seller’s agent wait and wait to get paid, even when full payment from the original buyer is already sitting in escrow.

Also, I understand that people wanting to buy timeshares don’t want to do a bunch of work and tie up a bunch of cash only to have the deal fall through because SVO swooped in and took the sweet deal that buyer was able to negotiate.

Also, I understand that if it gets widely known that SVO is exercising its ROFR at a particular resort, fewer and fewer buyers will step up to the plate to try their luck, thereby dropping the selling prices even further and hurting the sellers.

Also, I understand that a ROFR is just that . .. the parties to the actual agreement can agree to ANYTHING and SVO only has the right to take it or leave it.  Period.

So  . . . this is what I think could be done to allow buyers and sellers, even if they’re unrelated, to quickly close a deal even with a ROFR hanging over the whole transaction:

1.  In addition to the agreed purchase price, determine a second asset of the buyer that is already held/owned/rented by that buyer (like a car—let’s say a 1975 Chrysler Cordoba – with soft Corinthian leather of course)

2.	Make an express term of the timeshare purchase agreement a requirement that the buyer continue to hold/license/insure that second asset for a limited term.  (i.e. “buyer agrees to license and insure a 1975 Chrysler Cordoba . . . with soft Corinthian leather . . . in (the state where it is already licensed and insured) for no less than 10 days following the closing of this real estate transaction.)

3.	Provide a “special damages” clause imposed on the buyer for failing to comply with item 2 (above).  For example . . . “In the event buyer fails to license and insure a 1975 Chrysler Cordoba . . . with soft Corinthian leather . . . as set forth in this agreement, Buyer will pay Seller US$ X,XXX as “special damages” for breaching this term of the agreement.  (I would select the “special damages” amount to be the maximum amount allowed to bring a small claim action in the seller’s jurisdiction thereby allowing the seller himself to fill out the paperwork and get the inevitable default judgment against SVO when it fails to show up on the hearing date.)  I'd also add a choice of venue/law clause to require resolving any disputes in the state courts (and using that state's law) of the seller.

This way, should SVO exercise its ROFR and fail to buy or register the Cordoba (with soft Corinthian leather), the seller can take SVO to small claims court in the seller's state and collect some additional cash from the bums.

I think with these additional terms in the purchase and sale agreement, the more likely response from SVO will be that the folks at SVO reviewing the ROFR request will see all this Corinthian leather and “special damages” language and just pass on exercising the right.  Who wants to deal with that stuff when you’ve got 15 other low-ball eBay sales without those terms that you can pilfer?

Just a thought.

-nodge


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## Fredm (Oct 6, 2010)

nodge said:


> Thanks Fred,
> 
> Isn’t there a mandatory time limit for SVO to exercise its ROFR or it is deemed waived?
> 
> ...



nodge, I discussed the dynamics of ROFR in some detail, here.
Posts 35 and 43 cover most of your questions.

Re: ROFR discouraging buyer involvement in the marketplace, abstracts I reference in post 24 of the same thread suggest that ROFR does discourage it. OTOH, ROFR does provide the hype to encourage some to suggest that it sets a "floor" on what will, or will not, pass review. This would only apply in reality if the ROFR exercise price was indeed a buy-back program, which it is not.


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## Purefct (Feb 3, 2011)

Fredm said:


> FWIW, I am not aware of any ROFR exercises at South.





DeniseM said:


> In this economy, ROFR is rare.  I wouldn't give it a second thought if I was looking to buy.  Also, only a few resorts have ROFR - see the list in SW Owner Resources at the top of the forum.



I submitted a $6,000 purchase to SVO for Westin KORV (south) for 2BR island view annual in December, SVO exercised ROFR.


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## Purefct (Feb 3, 2011)

Hey, is there a list for each resort showing prices where the developer exercised and didn't exercise ROFR?


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## Fredm (Feb 3, 2011)

Purefct said:


> Hey, is there a list for each resort showing prices where the developer exercised and didn't exercise ROFR?



No. We keep track (sort of) here. Thanks for your post.

Thus far, Mission Hills (Platinum) and Maui are getting some exercises.


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## MommaBear (Mar 3, 2011)

Starwood excercised their ROFR after 6 weeks on WMH 2 br l/o gold season eey- granted I only paid $1 on Ebay. The closing agent said he is seeing ROFR for all WMH under $2000! I am going to keep bidding low and hope it isn't so!


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## YYJMSP (Mar 3, 2011)

MommaBear said:


> Starwood excercised their ROFR after 6 weeks on WMH 2 br l/o gold season eey- granted I only paid $1 on Ebay. The closing agent said he is seeing ROFR for all WMH under $2000! I am going to keep bidding low and hope it isn't so!



Given that they have extremely limited WDW inventory until they build some more, I'm not surprised they're picking up cheap WMH's to put back on sale out of that office...


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## Fredm (Mar 8, 2011)

YYJMSP said:


> Given that they have extremely limited WDW inventory until they build some more, I'm not surprised they're picking up cheap WMH's to put back on sale out of that office...



That is exactly what they are doing.


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## Fredm (Mar 8, 2011)

MommaBear said:


> Starwood excercised their ROFR after 6 weeks on WMH 2 br l/o gold season eey- granted I only paid $1 on Ebay. The closing agent said he is seeing ROFR for all WMH under $2000! I am going to keep bidding low and hope it isn't so!



MommaBear, sorry you lost a great value.

A word of well intentioned advice.
Next time do business with a knowledgeable  broker and closing agent that will save you and your purchase from what happened.


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## jarta (Mar 8, 2011)

MommaBear,   ...   When I recently purchased a Platinum 2-br lockoff at WMH, Starwood waited about 2 weeks too long to respond and exercise its ROFR.  My broker, Fredm, called Starwood on this violation and it quickly backed off.  I had never used Fred before.  

I'm sure Fredm is certainly not the only competent timeshare broker.  But Fred absolutely knows what he is doing.  And, he's right in Palm Springs.  

Better luck next time.   ...   eom


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## mcernik (Mar 8, 2011)

I lost my 1 Bdroom EOY OV at WKORV (South) that I won for $985 last week to rofr..


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