# Marriott DC Points



## Jayco29D (Feb 23, 2018)

I am just curious what folks think of buying and using Marriott Destination Club Points.
- Are you able to book and get the resorts and views you want?
- How long in advance do you need to book using DC points to get what you want?
- If you want to use DC points to stay at the Ritz residence clubs, is there actual availability if you are trying to book at the Ritz with DC points? Are there any tips on how to use DC points to book at the Ritz?
- What are the pros and cons compared to a deeded week (assuming the deeded week does not qualify to be converted to DC points)?
- How hard is it to resell Marriott DC Points?
- Can you combine two or more DC points packages to achieve higher membership levels i.e. Select, Executive, Presidential or Chairman’s Club membership levels?
- If you buy DC points resale, are there any restrictions or limitations on using your points or on the benefits resale owners receive?
- Can Marriott change the DC points redemption value i.e. do they change the number of points it takes to stay at their various resorts - or is it fixed like Disney?
- What is the difference between Basic Ownership, Premier Status and Premier Plus Status vs Select, Executive, Presidential or Chairman’s Club membership levels? Why does Marriott have the two different groupings?
- What are the MFs per DC point? Does it vary by the total number of points owned or is it a flat rate?
- Does Marriott change the benefits and/or number of points to quality for its Basic Ownership, Premier Status and Premier Plus Status and the Select, Executive, Presidential or Chairman’s Club membership levels from year to year?


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## JIMinNC (Feb 23, 2018)

See my answers in RED



Jayco29D said:


> I am just curious what folks think of buying and using Marriott Destination Club Points.
> - Are you able to book and get the resorts and views you want?
> So far I'm batting 1000. Have gotten every reservation I've tried to get in the five use years we've had Points. Just booked Waiohai on Kauai for last week of February 2019 at 12:01am tonight when the clock ticked over to the 12 months to check-in day and the 20% premium Owner level owners have to "pay" went away. We were also successful booking mid-June OF at Maui Ocean Club back in 2016, but had to cancel that reservation about 9 months out. We used those freed-up points to book Labor Day weekend in Hilton Head at Barony, the week of the Heritage golf tournament in HHI at Barony in an OF unit, two long weekends at Grand Chateau, and several days at Pulse at Mayflower in Washington, DC. That's one other thing I like about the DC, it's easy to cancel and reconfigure reservations.
> - How long in advance do you need to book using DC points to get what you want?
> ...


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## Fasttr (Feb 23, 2018)

As usual, Jim did an excellent job at answering your questions.  That said, I didn't see that he replied to your last 3 questions....so here goes....

 What is the difference between Basic Ownership, Premier Status and Premier Plus Status vs Select, Executive, Presidential or Chairman’s Club membership levels? Why does Marriott have the two different groupings?
When the DC first rolled out, the benefits were based on a 3 tier ownership status (Owner, Premier and Premier Plus).  Approx 5 years into the program (2015 or so), they flipped to a 5 tier system, which is the one currently in place.  Here is a link to the benefits of each tier.    https://m.marriottvacationclub.com/...rshipLevelsResources/benefits_at_a_glance.pdf

 - What are the MFs per DC point? Does it vary by the total number of points owned or is it a flat rate?  
MF/point is $0.553, so a smidge over 55 cents a point....so it does vary by how many points you own.  

- Does Marriott change the benefits and/or number of points to quality for its Basic Ownership, Premier Status and Premier Plus Status and the Select, Executive, Presidential or Chairman’s Club membership levels from year to year? 
As mentioned above, only the 5 tier system is currently active.  No major changes from year to year.  Only 1 major change so far in the 8 years the program has been in existence. as mentioned above.  They may add a benefit here or there and assign it to a specific tier(s) when they do....like the home rentals, etc.  

And just for another data point on availability to book resorts/views desired, I would have to agree with Jim...I have been very happy with availability in the system when booking with points.  As long as you book when the windows open up, you will be very pleased.  That said, on a few occasions where the planning was done late, like about a week ago when my son was wondering if there was any availability in Orlando for a  3 day weekend in early March (yes, about a month out) I was actually able to give him several options for him to choose from and was able to book it for him.


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## GregT (Feb 23, 2018)

Jayco,

You've gotten excellent responses so far.  The only one I can add to is my experience with one of the Ritz Carlton resorts, Ritz Carlton St. Thomas.  I've been able to make multiple reservations, but it is a tough one to reserve.  Availability is limited and I've had several experiences where I had to use Trust Points to make part of the reservation.  Not always, but enough times to make me suspicious that it is not accidental.

I would suspect this applies to other Ritz properties too, but definitely STT.   In my examples, about 40% of the reservation's point requirements had to be Trust points.

Best,

Greg


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## VacationForever (Feb 23, 2018)

@JIMinNC , I have only booked weeks which opens up at 9am Eastern Time.  With points do you book on Tuesday night 12:01am Eastern Time?


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## JIMinNC (Feb 23, 2018)

Fasttr said:


> As usual, Jim did an excellent job at answering your questions.  That said, I didn't see that he replied to your last 3 questions....so here goes....



Good catch. I think the OP edited his post and added those last three questions after I had already quoted it and started replying. Didn't catch that. Thanks for watching my six!


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## Steve Fatula (Feb 23, 2018)

I have had no trouble thus far. The closest I came to having "trouble" was booking Spain this May. At the time I wanted to book, last year well in advance, there was no inventory. So, I simply had Marriott add me to the waiting list, and, around Jan 1, I got it. I like to book within 30 days for the most part since that yields me a 25% point discount. But not for major trips such as overseas. 

I was able to get past ROFR buying points at $2.50/pt.

I mostly like my owned week better as overall it's cheaper, but it is enrolled which allows me to trade the lockoff for "free".


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## JIMinNC (Feb 23, 2018)

VacationForever said:


> @JIMinNC , I have only booked weeks which opens up at 9am Eastern Time.  With points do you book on Tuesday night 12:01am Eastern Time?



I was using Destination Points to book Waiohai on Kauai. The 13-month points inventory for Feb 23, 2019 check-in has been sitting out there for a month for the 2BR Island View that we were looking for, but since we are only Owner level, from 13 to 12 months we have to pay a 20% point penalty to book in that window. So the 4850 point booking would have cost us 5820 points if booked before the 12-month release date. I theorized that when the clock rolled to Friday EST on Thursday evening (12-month points inventory is released on Fridays), the 20% penalty would disappear at midnight, so I went online to check, and sure enough, the 2BR IV was now showing 4850. So I booked it. I'm not sure if they also load the 12-month points inventory release at midnight or if that waits until 9am on Friday. But I just had a feeling that 20% penalty would disappear on the inventory that was already out there, and it did.

Now I gotta be online next Thursday at 9am sharp to book our EOY deeded week on Maui for March 2 check-in to match up with the Kauai week. I did a dry run Thursday morning and the Feb 23 Maui weeks inventory showed up on schedule right at 9am. The Friday Feb 22 check-ins were oddly the first to go about 9:05 and the Saturday Feb 23 check-in dates lasted until 9:09. When I went offline at about 9:20, the Sunday Feb 24 date was still available. I checked back in mid afternoon, and all three were gone. But then something odd happened. After I booked the points last night after midnight, I just went back into the weeks system and looked at our MOC week again, and voila, all three MOC check-in days - Feb 22, 23, 24 - were once again showing as available. So, I don't know if they loaded additional MOC weeks inventory last night either before or after midnight, or why those appeared as available again. I also checked again just now (12:50pm EST on Friday) and the 22,23,24 are still showing as available - even though they initially seemed to be gone shortly after 9am.


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## VacationForever (Feb 23, 2018)

JIMinNC said:


> I was using Destination Points to book Waiohai on Kauai. The 13-month points inventory for Feb 23, 2019 check-in has been sitting out there for a month for the 2BR Island View that we were looking for, but since we are only Owner level, from 13 to 12 months we have to pay a 20% point penalty to book in that window. So the 4850 point booking would have cost us 5820 points if booked before the 12-month release date. I theorized that when the clock rolled to Friday EST, the 20% penalty would disappear at midnight, so I went online to check, and sure enough, the 2BR IV was now showing 4850. So I booked it. I'm not sure if they also load the 12-month points inventory release at midnight or if that waits until 9am. But I just had a feeling that 20% penalty would disappear on the inventory that was already out there, and it did.
> 
> Now I gotta be online next Thursday at 9am sharp to book our EOY deeded week on Maui for March 2 check-in to match up with the Kauai week. I did a dry run Thursday morning and the Feb 23 Maui weeks inventory showed up on schedule right at 9am. The Friday Feb 22 check-ins were oddly the first to go about 9:05 and the Saturday Feb 23 check-in dates lasted until 9:09. When I went offline at about 9:20, the Sunday Feb 24 date was still available. I checked back in mid afternoon, and all three were gone. But then something odd happened. After I booked the points last night after midnight, I just went back into the weeks system and looked at our MOC week again, and voila, all three MOC check-in days - Feb 22, 23, 24 - were once again showing as available. So, I don't know if they loaded additional MOC weeks inventory last night either before of after midnight, or why those appeared as available again. I also checked again just now (12:50pm EST on Friday) and the 22,23,24 are still showing as available - even though they initially seemed to be gone shortly after 9am.


Ok... you booked at midnight to avoid the 20% penalty.  Thanks for elaborating.


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## Jayco29D (Feb 23, 2018)

JIMinNC said:


> See my answers in RED



Thanks Jim. This was an excellent reply to my questions. I appreciate the time you took to thoroughly answer each question in detail. I like the flexibility of using DC points to book wherever and which ever view as well as being able to book for less than a week. I am not sure right now if we will purchase DC points. I am just starting research process. We have deeded weeks at MKO-OV 2 br EOY and WKORVN-OF 2 br EOY and so far, so good with those. Deeded weeks are certainly cost effective.


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## Jayco29D (Feb 23, 2018)

GregT said:


> Jayco,
> 
> You've gotten excellent responses so far.  The only one I can add to is my experience with one of the Ritz Carlton resorts, Ritz Carlton St. Thomas.  I've been able to make multiple reservations, but it is a tough one to reserve.  Availability is limited and I've had several experiences where I had to use Trust Points to make part of the reservation.  Not always, but enough times to make me suspicious that it is not accidental.
> 
> ...



Have you tried booking the Ritz at Northstar with DC points. We like skiing so that would be the primary Ritz resort we would be interested in during ski season. We are interested in the Ritz bc it is pet friendly.


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## Jayco29D (Feb 23, 2018)

JIMinNC said:


> Good catch. I think the OP edited his post and added those last three questions after I had already quoted it and started replying. Didn't catch that. Thanks for watching my six!



Yes, I added the last 3 questions a little while after posting.


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## Jayco29D (Feb 24, 2018)

Steve Fatula said:


> I have had no trouble thus far. The closest I came to having "trouble" was booking Spain this May. At the time I wanted to book, last year well in advance, there was no inventory. So, I simply had Marriott add me to the waiting list, and, around Jan 1, I got it. I like to book within 30 days for the most part since that yields me a 25% point discount. But not for major trips such as overseas.
> 
> I was able to get past ROFR buying points at $2.50/pt.
> 
> I mostly like my owned week better as overall it's cheaper, but it is enrolled which allows me to trade the lockoff for "free".



Where can you find DC points for $2.50/pt. I have not seen anything under $3+.


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## Steve Fatula (Feb 24, 2018)

Jayco29D said:


> Where can you find DC points for $2.50/pt. I have not seen anything under $3+.



From a timeshare realtor with dozens of sellers. Most likely was just lucky to get past ROFR.


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## Jayco29D (Feb 24, 2018)

GregT said:


> Jayco,
> 
> You've gotten excellent responses so far.  The only one I can add to is my experience with one of the Ritz Carlton resorts, Ritz Carlton St. Thomas.  I've been able to make multiple reservations, but it is a tough one to reserve.  Availability is limited and I've had several experiences where I had to use Trust Points to make part of the reservation.  Not always, but enough times to make me suspicious that it is not accidental.
> 
> ...



What are Trust points? Are they different than regular DC points?


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## Fasttr (Feb 24, 2018)

Jayco29D said:


> What are Trust points? Are they different than regular DC points?


Trust points are the points that MVC sells, and the same points that you can find for sale on the resale market.  Legacy (or Exchange) points are points that folks with enrolled weeks can convert to by exchanging their week for points.  For the most part, inside the DC, they are treated the same....but there can be some subtle differences at times (one being the Ritz ressies GregT mentioned that required at least some Trust points to book)


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## JIMinNC (Feb 24, 2018)

Steve Fatula said:


> From a timeshare realtor with dozens of sellers. Most likely was just lucky to get past ROFR.



What was the size of the points package that you bought for $2.50? Was it a small package? What time of year? Do you know if the broker might have bundled other fees into the price that they submitted to Marriott for ROFR (i.e. - was it a seller that charges and upfront fee and that fee was submitted as part of the price; or did they bundle all closing/transfer costs in the price to be paid by the seller, as was the case with StevenTing's recent purchase)?


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## dgf15215 (Feb 24, 2018)

I'll agree with most of the comments you've received so far, the process is fairly simple and effective. My wife and I have never had an issue getting the location we wanted but we're fairly limited in our requests: Ko Olina, Surf Club, Beach Place Towers, Ocean Point & Newport are our regulars. You do need to plan ahead, the earlier the better. My wife tracks the exact day/week she needs to book and I think we book 13 months out. If I'm wrong on that it's out of the ignorance of laziness, letting her do all the work.

No experience with Ritz. Never tried to sell points. The membership level is based on total points available adding DC & Trust points together - that combination gives us our status. Marriott can change how many DC points are needed for a specific style unit in a specific week but the total number of points in the building has got to remain the same. What happened to us that one week we own was reduced in value by 100 so we lost the 100 points to use every year; some other owner got a bonus of 100 points. It did not affect our status level even though we were on the cusp of the category; we were grandfathered into the status we were at. The benefits at each level are slightly different and yes, they raise the bar for each level on occasion. However, once you achieve a specific level you stay there even after the bar is raised for new entrants. I know that from experience.


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## Steve Fatula (Feb 24, 2018)

JIMinNC said:


> What was the size of the points package that you bought for $2.50? Was it a small package? What time of year? Do you know if the broker might have bundled other fees into the price that they submitted to Marriott for ROFR (i.e. - was it a seller that charges and upfront fee and that fee was submitted as part of the price; or did they bundle all closing/transfer costs in the price to be paid by the seller, as was the case with StevenTing's recent purchase)?



3,500 points. Steven Ting used the same realtor, and yes, seller paid everything, including the enrollment fee which was added to the $2.50/pt. So, the $2.50 was my cost without the enrollment fee. It's on rofr.net, looking there, it appears to be it was July 6 2017.


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## VacationForever (Feb 24, 2018)

Steve Fatula said:


> 3,500 points. Steven Ting used the same realtor, and yes, seller paid everything, including the enrollment fee which was added to the $2.50/pt. So, the $2.50 was my cost without the enrollment fee. It's on rofr.net, looking there, it appears to be it was July 6 2017.


But what was sent to Marriott was about $5, as it includes the junk fees, correct?  If so, the true ROFR is really $5, as MVC would have to pony up $5 to the seller if they decide to exercise.


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## JIMinNC (Feb 24, 2018)

Steve Fatula said:


> 3,500 points. Steven Ting used the same realtor, and yes, seller paid everything, including the enrollment fee which was added to the $2.50/pt. So, the $2.50 was my cost without the enrollment fee. It's on rofr.net, looking there, it appears to be it was July 6 2017.



That makes sense then. While YOUR cost was net $2.50 (not including the enrollment fee), Marriott's cost would have been $2.50 + $2 ($4.50/point) since the way I understand that Realtor writes the paperwork, your submittal would have been $4.50/pt from Buyer to Seller with the Seller paying the transfer fee and all closing costs. So in that scenario, MVC would have been obligated to pay the Seller $4.50, not $2.50. So while the effect to you was a ROFR pass at $2.50, Marriott was actually passing on a $4.50 sale.


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## Steve Fatula (Feb 24, 2018)

Agreed, but, the seller gets $2.50 per point if ROFR is not exercised, not $4.50 or $5 or whatever the total number is. My cost is the same as in a regular non "seller pays all fees" scenario. In a regular scenario, you would submit a purchase price of $2.50 and you would pay (if it passed ROFR) $2.50/pt to the seller + all the other costs. So, to make it more realistic, I put $2.50 on rofr.net since that's what I paid per point, same as a regular structured deal. However, you might consider it $4.50 for ROFR, I see that of course. OTOH - who's to say that Marriott didn't read the document submitted in full, where it did say seller pays all fees (yes, the document submitted to Marriott did show that, nothing was done under the table). So, if they read it, they knew it was essentially a $2.50/pt offer. So, hard to say what actually happened. But Steven did the same thing just a slightly higher price. I guess I was more seeing it as price paid per point, not ROFR. Though the site is named ROFR. But people use it to see point cost as well (I sure did). Perhaps 2 prices are needed on that site to make it clearer, if I had put $5 or whatever total was per point on that site, people would likely assume that's what they need to pay to get past ROFR. 

The advantage of writing this scenario is the seller actually hopes they do exercise ROFR, and in that case, good for them (happy for them), and I'll just try again. So, there is incentive for the seller. Seems like a win win.


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## Jayco29D (Feb 24, 2018)

Steve Fatula said:


> Agreed, but, the seller gets $2.50 per point if ROFR is not exercised, not $4.50 or $5 or whatever the total number is. My cost is the same as in a regular non "seller pays all fees" scenario. In a regular scenario, you would submit a purchase price of $2.50 and you would pay (if it passed ROFR) $2.50/pt to the seller + all the other costs. So, to make it more realistic, I put $2.50 on rofr.net since that's what I paid per point, same as a regular structured deal. However, you might consider it $4.50 for ROFR, I see that of course. OTOH - who's to say that Marriott didn't read the document submitted in full, where it did say seller pays all fees (yes, the document submitted to Marriott did show that, nothing was done under the table). So, if they read it, they knew it was essentially a $2.50/pt offer. So, hard to say what actually happened. But Steven did the same thing just a slightly higher price. I guess I was more seeing it as price paid per point, not ROFR. Though the site is named ROFR. But people use it to see point cost as well (I sure did). Perhaps 2 prices are needed on that site to make it clearer, if I had put $5 or whatever total was per point on that site, people would likely assume that's what they need to pay to get past ROFR.
> 
> The advantage of writing this scenario is the seller actually hopes they do exercise ROFR, and in that case, good for them (happy for them), and I'll just try again. So, there is incentive for the seller. Seems like a win win.



So in the end, did you pay the seller $2.50 per point and then pay $2 extra per point to Marriott to activate the points?

I am confused by this discussion because doesn't everyone pay an extra $2 per point to Marriott to activate points?


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## JIMinNC (Feb 24, 2018)

Steve Fatula said:


> Agreed, but, the seller gets $2.50 per point if ROFR is not exercised, not $4.50 or $5 or whatever the total number is. My cost is the same as in a regular non "seller pays all fees" scenario. In a regular scenario, you would submit a purchase price of $2.50 and you would pay (if it passed ROFR) $2.50/pt to the seller + all the other costs. So, to make it more realistic, I put $2.50 on rofr.net since that's what I paid per point, same as a regular structured deal. However, you might consider it $4.50 for ROFR, I see that of course. OTOH - who's to say that Marriott didn't read the document submitted in full, where it did say seller pays all fees (yes, the document submitted to Marriott did show that, nothing was done under the table). So, if they read it, they knew it was essentially a $2.50/pt offer. So, hard to say what actually happened. But Steven did the same thing just a slightly higher price. I guess I was more seeing it as price paid per point, not ROFR. Though the site is named ROFR. But people use it to see point cost as well (I sure did). Perhaps 2 prices are needed on that site to make it clearer, if I had put $5 or whatever total was per point on that site, people would likely assume that's what they need to pay to get past ROFR.
> 
> The advantage of writing this scenario is the seller actually hopes they do exercise ROFR, and in that case, good for them (happy for them), and I'll just try again. So, there is incentive for the seller. Seems like a win win.



I agree that from your standpoint, it's essentially a $2.50/point deal when compared to the way most deals are structured with the buyer paying the $2/pt activation fee. The points cost you a total of $4.50 or $5, but $2.00 to $2.50 of that was the activation fee and the closing costs. For the guy who submits a traditional $4.50/point deal to Marriott, his total cost would be $6.50 plus closing. So I agree, from the buyer's standpoint your deal was $2.50/point plus fees, while his was $4.50 plus fees. But if Marriott exercised either deal, they would have been obligated to pay the $4.50 or $5, so that is why they likely waived ROFR at such a low price for both you and Steven. They were looking at a $4.50 or $5 cost to exercise which is right in line with the price they usually waive at when the buyer pays the activation fee

I don't disagree with structuring the deal this way - if I ever decide to buy resale points I would probably try the same structure - my only point is that to just say you passed at $2.50/point is sorta misleading unless it's also disclosed that Marriott was basing their decision on having to pay $4.50 to $5. If someone else tried to buy points at $2.50 with a more traditional buyer-pays-the-activation-fee structure, they would almost certainly lose the deal to Marriott at that price. So all I'm saying is that the information that is entered into ROFR.net should probably be consistent, or at least footnoted to show which deals were based on the Buyer paying the $2 activation fee and which were based on the Seller paying. Otherwise, the entires on ROFR.net are not truly apples-to-apples. The same could be said for the resale weeks sales where the buyer gets it cheaply but the ROFR is based on a higher price that includes an upfront fee paid by the Seller. If that's not disclosed on ROFR.net, it could be equally misleading.


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## JIMinNC (Feb 24, 2018)

Jayco29D said:


> So in the end, did you pay the seller $2.50 per point and then pay $2 extra per point to Marriott to activate the points?



I think this is the key question/clarification that needs to be answered. They way I understand the two ways these deals can be structured is as follows:

1) Most deals, the Buyer pays closing costs and the $2/point activation fee. So, for a 3,500 point purchase like we're discussing, the contract would be worded that the Buyer will pay the Seller the agreed-upon price, plus pay Marriott their activation fee, and the closings cost to the Escrow/Title company. Let's say it takes $4.50/point to pass ROFR in a deal like that. So, for 3,500 points the price would be $15,750, which is what is submitted to Marriott since that is what the Buyer is obligated to pay the Seller. If Marriott were to exercise ROFR, they would be obligated to pay the Seller $15,750 - the same as what the Buyer had agreed to. Marriott would then have to cover their closing costs, since under that deal, the Buyer pays for closing. But assuming Marriott waives ROFR, the closing statement would have the Buyer paying the Seller $15,750, the Buyer paying Marriott $7,000 ($2/point), plus the Buyer paying the closing costs going to the Escrow/Title company. If closing costs were $500, the the total paid by the Buyer into Escrow would be $23,250 ($15,750 + $7,000 + $500). The Escrow/Title company would then disburse $15,750 to the Seller, $2,000 to Marriott and keep $500 for themselves.

2) As I understand the deals where the Seller-Pays-All, the deal for 3,500 points would be worded that the Buyer will pay the Seller $16,250, so that is what is submitted to Marriott for ROFR decision. If Marriott waives ROFR, the Buyer would then pay $16,250 into Escrow. The Escrow company would then deduct $500 from those proceeds for closing, and also deduct another $7,000 from the Seller's proceeds for the activation fee that gets sent to Marriott. So in this case the Seller nets $8,750 ($2.50 per point). But the way the contract is worded, if Marriott were to exercise ROFR on this transaction, they would still be obligated to pay the Seller $16,250. I assume since the Seller pays for closing under the contract terms, Marriott could charge them for their costs to close and deduct that from their proceeds (for argument's sake, let's say thats the same $500 it would cost to close the external sale, but arguably, Marriott's costs should be less). But since there is no transfer to a new Buyer in that case, Marriott would not be able to deduct the $2/point from the Seller's proceeds. So in this case, the Seller would actually net more - $15,750 - if Marriott exercised ROFR.

If my understanding and math is correct, under *both* scenarios above, if Marriott were to exercise ROFR, it would cost Marriott $15,750 ($4.50/point). So, both of these transactions should be essentially equal for Marriott, so they should be equally likely or unlikely to exercise ROFR on both of these deals. So, looked at from *Marriott's* perspective, they are exercising or waiving ROFR at $4.50/point on both transactions.

But these two scenarios are *very* different for the Buyer and Seller. Under scenario #1, if Marriott waives ROFR and allows the deal to go through, the Buyer's total cost would be $23,250 [$15,750 ($4.50/point) to the Seller, plus closing costs, plus $2/pt activation fee to Marriott for a total of $6.64/point]. But under scenario #2, the Buyer's total cost is only $16,250 [$8,750 retained by the Seller ($2.50/point), plus $7,000 the Escrow company remits to Marriott on behalf of the Seller ($2.00/point), plus closing costs, for a total cost of $4.64/point]. So, even though Marriott's ROFR cost under both scenarios is $4.50/point, for the original Buyer and Seller, scenario #1 is a $4.50/point cost for the base points, but scenario #2 is only a $2.50/point base cost for the points.

Hopefully Steve Fatula can confirm that this is the way these deals are structured. My assumption is the key is the legal language in the sales contract that makes Marriott's cost equal under both scenarios even though the cost to the Buyer is much less in #2.


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## TXTortoise (Feb 24, 2018)

Awesome. ;-)


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## Jayco29D (Feb 24, 2018)

JIMinNC said:


> I think this is the key question/clarification that needs to be answered. They way I understand the two ways these deals can be structured is as follows:
> 
> 1) Most deals, the Buyer pays closing costs and the $2/point activation fee. So, for a 3,500 point purchase like we're discussing, the contract would be worded that the Buyer will pay the Seller the agreed-upon price, plus pay Marriott their activation fee, and the closings cost to the Escrow/Title company. Let's say it takes $4.50/point to pass ROFR in a deal like that. So, for 3,500 points the price would be $15,750, which is what is submitted to Marriott since that is what the Buyer is obligated to pay the Seller. If Marriott were to exercise ROFR, they would be obligated to pay the Seller $15,750 - the same as what the Buyer had agreed to. Marriott would then have to cover their closing costs, since under that deal, the Buyer pays for closing. But assuming Marriott waives ROFR, the closing statement would have the Buyer paying the Seller $15,750, the Buyer paying Marriott $7,000 ($2/point), plus the Buyer paying the closing costs going to the Escrow/Title company. If closing costs were $500, the the total paid by the Buyer into Escrow would be $23,250 ($15,750 + $7,000 + $500). The Escrow/Title company would then disburse $15,750 to the Seller, $2,000 to Marriott and keep $500 for themselves.
> 
> ...



So scenario 2 is better the a buyer and worse for the seller. In scenario 2, it is better for the seller if Marriott exercises ROFR. In scenario 1, I guess the seller would not care.

How common is scenario 1 vs scenario 2 in purchasing Marrriott DC/Trust points on the resale market?


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## JIMinNC (Feb 24, 2018)

Jayco29D said:


> So scenario 2 is better the a buyer and worse for the seller. In scenario 2, it is better for the seller if Marriott exercises ROFR. In scenario 1, I guess the seller would not care.



Correct on both accounts, as I understand it.



Jayco29D said:


> How common is scenario 1 vs scenario 2 in purchasing Marrriott DC/Trust points on the resale market?



I think scenario #1 is the most common way DC points are purchased on the resale market today. But, if I were to decide to buy resale Trust Points, I would certainly look for a broker who was adept at structuring deals like the ones StevenTing and Steve Fatula put together, as long as that approach continues to work as it did for them.

The most important thing in my view is that the folks who run ROFR.net should weigh in on what number they think should be entered on the ROFR.net site. Right now, scenario #1 would go in at $4.50 and scenario #2 at $2.50, but from Marriott's perspective, they are both the same at $4.50.


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## Jayco29D (Feb 24, 2018)

JIMinNC said:


> Correct on both accounts, as I understand it.
> 
> 
> 
> ...



Isn’t scenario 1 equal to $6.50 per point for the buyer ($4.50 + $2 activation) and scenario 2 is $2.50 per point for the buyer (since seller is paying activation fees)? From this perspective, I think reporting $2.50 per point makes sense since that is what the buyer paid. It was a great deal for the buyer!


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## Steve Fatula (Feb 25, 2018)

JIMinNC said:


> So all I'm saying is that the information that is entered into ROFR.net should probably be consistent, or at least footnoted to show which deals were based on the Buyer paying the $2 activation fee and which were based on the Seller paying. Otherwise, the entires on ROFR.net are not truly apples-to-apples. The same could be said for the resale weeks sales where the buyer gets it cheaply but the ROFR is based on a higher price that includes an upfront fee paid by the Seller. If that's not disclosed on ROFR.net, it could be equally misleading.



I agree with you. If I had put say $4.50 on rofr.net (the all in price), then, that is certainly not the same as someone in a "normal" deal who really did pay $4.50/pt as they really paid $6.50-$7 all in. That's why I think two prices are needed. It would actually be very interesting to see which ones that passed were structured the way mine was, and which ones that passed were not. Always keeping in mind of course that people can enter anything they want there, so, none of it is confirmed data anyway. By putting $2.50, it is the same as someone who structures it the "normal" way, it's apples to apples as far as price paid. It is not apples to apples as far as what passed ROFR though. So, you can't win either way as is.

As far as JimInNC question goes, no, I think you have it wrong. The total price offered to the seller based on your assumed lowest price that would pass ROFR ($4.50) would be (using round numbers) $4.50/pt for scenario 1 (forgetting closing costs whatever they are). So, 3500 * 4.50 = $15,750 and that goes to Marriott ROFR. For scenario 2, the price offered to the seller is 3500 * 6.50 = 22750 with an addendum that says seller to pay the enrollment fee and am ignoring closing costs for simplicity. So, 22750 goes to Marriott ROFR along with the addendum  Quite a bit different, that's why scenario 2 can succeed and is better for the seller (though to me, if Marriott actually reads that the seller is paying all fees, they should treat it the same). Marriott does not absorb that $2 per pt enrollment fee as it's paper money, it costs them nothing and they are not enrolling those points. On the settlement sheet, it's all a wash either way for buyer and seller.

So, the cost to the buyer is the same under either scenario. The price the seller gets depends. If exercised, Marriott probably pays them more than the $4.50. If not exercised, it's the same as scenario 1. So, if ROFR is not exercised, both sides get or pay exactly the same amount. If it is exercised, we are assuming the seller gets more.

To answer a missed question I see, the offer to the seller in my case was somewhere between $4.50 and $5 (it's in a safe, don't have exact number) since it did say seller pays *all* costs, enrollment fee, closing costs, and another fee or 2 I forgot. So, I essentially paid the seller something between those 2 numbers, and, they paid the $2/pt fee, closing, etc. So, I did pay $2.50/pt + all the other fees normally paid, didn't cost me 1 cent more than any other deal structure). I just paid them (the other fees) to the seller instead of Marriott, and they paid Marriott. It all works out the same on the standard settlement sheet as far as net costs. So, yes, it was about as good of a deal as one can get, though I see one cheaper on rofr.net. This is not unusual in other real estate transactions like houses, all those costs are always negotiable.

I disagree that scenario 2 is worse for the seller. Here's why. The seller was asking for $2.50/pt, which I offered them right? I merely offered them exactly what they asked for, PLUS, the possibility they might make more if Marriott exercised. Not sure I would call that worse. It's "worse" in the sense that they are hoping Marriott exercises and they (may) get paid more, but, I offered them exactly what they asked for, so, I would say scenario 2 is better than scenario 1 for the seller since they had a chance to make more than they asked for. And even if Marriott did exercise, and they did pay more than they actually asked for, I am still happy as I helped someone who wanted out get more of their money back. It's a good day either way. I would just try again.


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## Jayco29D (Feb 25, 2018)

The explanations above are confusing to me. Let me try to simplify and tell me if this is correct based on JimInNC’s 2 screnarios.

In scenario #1, Seller nets $15,750, Buyer pays seller $15,750 + $7000 to Marriott. Total paid by buyer is $22,750 plus closing costs. This deal is $4.50 per point + $2 activation fee = $6.50 per point that buyer paid.

In scenario #2, Seller nets $8750. Buyers pays seller $15,750 and seller pays $7000 to Marriott. Total paid by buyer is $15,750 plus closing costs. This deal is $2.50 per point + $2 activation fee = $4.50 per point.

So for apples to apples comparison on ROFR.net, we could list $2.50 to compare to $4.50 since both have a $2 activation fee. The only difference is who paid the activation fee.

Some comments/observations:

In both scenarios, Marriott gets the same amount for the activation fee if they waive ROFR. However, if Marriott reads the paperwork they would still have an incentive to buy back scenario 2 because it is under the resale market value and they pay $15,750 in both screnaries if the execute ROFR. The point of ROFR is to keep the resale market rate at a certain level. So the two Steves got lucky that scenario 2 passed ROFR.

If I were the seller, I would structure the deal as in scenario 1. As a buyer, I prefer scenario 2 because it is a bargain and under market.

The only reason the seller is getting more than asked for in scenario 2 is because they had a low asking price and they were willing to pay the activation fee for the seller. Basically, it sounds like the seller was probably desperate to get out of MFs so they structured the scenario 2 deal to sell. The seller is willing to sell low and they are probably praying for Marriott to buy back.


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## Steve Fatula (Feb 25, 2018)

Jayco29D said:


> The explanations above are confusing to me. Let me try to simplify and tell me if this is correct based on JimInNC’s 2 screnarios.
> 
> In scenario #2, Seller nets $8750. Buyers pays seller $15,750 and seller pays $7000 to Marriott. Total paid by buyer is $15,750 plus closing costs. This deal is $2.50 per point + $2 activation fee = $4.50 per point.



Nope buyer pays seller $22,750. Seller pays $7000 to Marriott, therefore, buyer paid $15750 just like scenario 1 and it's enrolled just like scenario 1. Seller (and buyer) make or pay the exact same amount either scenario.

I don't agree with your conclusions therefore since the numbers are not correct. Scenario 2 is much better for the seller in my view. The money is identical. Hopefully you are getting closer to seeing how this works. It's no different than a house offer.


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## Jayco29D (Feb 25, 2018)

Steve Fatula said:


> Nope buyer pays seller $22,750. Seller pays $7000 to Marriott, therefore, buyer paid $15750 just like scenario 1 and it's enrolled just like scenario 1. Seller (and buyer) make or pay the exact same amount either scenario.
> 
> I don't agree with your conclusions therefore since the numbers are not correct. Scenario 2 is much better for the seller in my view. The money is identical. Hopefully you are getting closer to seeing how this works. It's no different than a house offer.


 
I am completely confused by your scenarios. Can you write up a simple explanation for scenario 1 and 2 based on what JIMinNC wrote. I was using his numbers. I do not know what your numbers are. If you are paying the exact same amount in both scenarios, then you should be paying $4.50 per point plus $2 activation fee in both scenarios. You said you were only paying $2.50 per point.


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## Steve Fatula (Feb 25, 2018)

Jayco29D said:


> I am completely confused by your scenarios. Can you write up a simple explanation for scenario 1 and 2 based on what JIMinNC wrote. I was using his numbers. I do not know what your numbers are. If you are paying the exact same amount in both scenarios, then you should be paying $4.50 per point plus $2 activation fee in both scenarios. You said you were only paying $2.50 per point.



I was using his numbers also in this example you asked about. You are confusing only his example (which was a hypothetical scenario) vs mine (where you now say $2.50 per pt which is not Jims example but mine. If you want to PM me your phone number, I'd be happy to talk to you on the phone right now. Perhaps you would then be better at explaining than I. Be happy to help sort it out.


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## Jayco29D (Feb 25, 2018)

Steve Fatula said:


> I was using his numbers also in this example you asked about. You are confusing only his example (which was a hypothetical scenario) vs mine (where you now say $2.50 per pt which is not Jims example but mine. If you want to PM me your phone number, I'd be happy to talk to you on the phone right now. Perhaps you would then be better at explaining than I. Be happy to help sort it out.



No it’s okay. If he and you are using different numbers, then of course my understanding is wrong. Based on his example, scenario 1 and 2 have different results for the buyer. I assume then that you did something different than what JIMInNC described. It sounds to me like what you did is you bundled the price per point with the activation fee and that’s it.


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## Steve Fatula (Feb 25, 2018)

Jayco29D said:


> No it’s okay. If he and you are using different numbers, then of course my understanding is wrong. Based on his example, scenario 1 and 2 have different results for the buyer. I assume then that you did something different than what JIMInNC described. It sounds to me like what you did is you bundled the price per point with the activation fee and that’s it.



There's a real important factor here. I PM'd you my phone number if you want to call me, be happy to go through my offer which would hopefully allow you to see why scenario 2 is best for seller and buyer, yet, costs exactly the same.


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## JIMinNC (Feb 25, 2018)

Steve Fatula said:


> I was using his numbers also in this example you asked about. You are confusing only his example (which was a hypothetical scenario) vs mine (where you now say $2.50 per pt which is not Jims example but mine. If you want to PM me your phone number, I'd be happy to talk to you on the phone right now. Perhaps you would then be better at explaining than I. Be happy to help sort it out.



I think we’re saying the same thing. In my hypothetical example I was just trying to show two transactions in which the ROFR threshold was the same $4.50/point from MVC’s perspective. 

Looked at just from the framework of your transaction, had you structured your deal like my scenario #1, then you would have paid the Seller $8750 ($2.50/pt) and Marriott $7000 ($2/pt) for a total of $15,750 plus closing costs.

But instead, you structured your deal like my scenario #2. In your case, you paid the Seller $15,750 plus closing costs, and then the Seller paid Marriott their $7000 and the closing company their other costs. 

So in both cases, your costs were identical at $15,750 plus closing, and the Seller’s net was also identical at $8750. The only difference is that if you had done your deal like scenario #1, the price that would have been submitted to Marriott for ROFR would have been $8750 ($2.50/pt) and they most likely would have exercised ROFR. But because you structured your deal like scenario #2, the price submitted to MVC was $15,750 ($4.50/pt) since the funds were passed through the Seller first. Marriott was unlikely to exercise ROFR at $4.50.


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## Jayco29D (Feb 25, 2018)

JIMinNC said:


> I think we’re saying the same thing. In my hypothetical example I was just trying to show two transactions in which the ROFR threshold was the same $4.50/point from MVC’s perspective.
> 
> Looked at just from the framework of your transaction, had you structured your deal like my scenario #1, then you would have paid the Seller $8750 ($2.50/pt) and Marriott $7000 ($2/pt) for a total of $15,750 plus closing costs.
> 
> ...



Jim, your previous scenario #1 had an additional $7000 going to Marriott by the buyer so the total was $22,750 plus closing costs. The example you just posted now is different and both total $15,750 now. This is why I got confused.

Now I do not see any difference between the two scenarios except one is bundled when presented to Marriott and the other is not. I can see now why scenario 2 is better because if Marriott exercises ROFR, they must pay the full $15,750 to the seller in scenario 2.


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## JIMinNC (Feb 25, 2018)

Jayco29D said:


> No it’s okay. If he and you are using different numbers, then of course my understanding is wrong. Based on his example, scenario 1 and 2 have different results for the buyer. I assume then that you did something different than what JIMInNC described. It sounds to me like what you did is you bundled the price per point with the activation fee and that’s it.





Jayco29D said:


> Jim, your previous scenario #1 had an additional $7000 going to Marriott by the buyer so the total was $22,750 plus closing costs. The example you just posted now is different and both total $15,750 now. This is why I got confused.



My scenarios 1 and 2 have different results because they are *two* *different hypothetical *transactions. In #1, the Seller agreed to sell for $4.50/pt and in #2, the Seller agreed to sell for $2.50/pt. What I was attempting to show with those examples was that for *both* of those two different transactions (one at $4.50 and the other at $2.50 for the same amount of points - 3500) Marriott's ROFR price would have been exactly the same ($4.50) because of the way the two transactions were structured differently.

Just looking at Steve's transaction, had he structured his deal like scenario #1 - he would have paid $8750 to the Seller and $7000 to Marriott for a total of $15,750 (ignoring closing costs). Marriott would have likely exercised ROFR on that deal since they would have only had to pay $2.50/point to the Seller.

But he structured his like scenario #2, so Steve paid the Seller the full $15,750 and then the Seller was obligated to pay Marriott the $7,000 out of their proceeds if the deal went through. So since Steve was paying the Seller $15,750 ($4.50/pt) Marriott would have been obligated to also pay the Seller that same $4.50/pt is the logic behind structuring the deal in this fashion. But in that case, if Marriott exercised ROFR, there would have been no $2/pt transfer fee because Marriott would have bought the points, so the Seller would get to pocket the extra $2/point. But Marriott was unlikely to exercise at that price.

Frankly, I'm not sure why MVC doesn't see through this and challenge the way these deals are structured. Maybe the language used in the contract is solid enough that they can't. But unless or until they do, it seems like the smart way to structure any transaction where a potential Buyer can find a Seller willing to sell their points at a very low price that is so low that a more traditional structure like scenario #1 would result in ROFR being exercised by Marriott. Think of it as something of a poison pill that makes the deal more expensive for Marriott than it otherwise would be.


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## Steve Fatula (Feb 25, 2018)

JIMinNC said:


> I think we’re saying the same thing. In my hypothetical example I was just trying to show two transactions in which the ROFR threshold was the same $4.50/point from MVC’s perspective.
> 
> Looked at just from the framework of your transaction, had you structured your deal like my scenario #1, then you would have paid the Seller $8750 ($2.50/pt) and Marriott $7000 ($2/pt) for a total of $15,750 plus closing costs.
> 
> ...



Exactly. The seller pays closing and enrollment fee, but, if Marriott buys it, there is no enrollment fee of course so the seller profits the fee. Sort of a loophole.

Not being a realtor, I am guessing real estate law is maybe why they can’t challenge the structure of the deal. This is done all the time when buying a house, absolutely nothing wrong with it. It was Marriott that made the fee so expensive, which caused us to change our strategy. Of course, a dishonest realtor and/or buyer or seller could always fake it under the table too. I think there is some specific realtor language that somehow affects it as well in the deal structure.


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## Jayco29D (Feb 25, 2018)

I totally understand the two scenarios. I was confused because in Jim’s first version of the hypothetical scenario, he included an extra $7000 in the deal (on top of the $15,750) that seems irrelevant to explaining the strategy. So for both buyer and seller, it seems scenario 2 would always be better.


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## Jayco29D (Feb 25, 2018)

After all the back and forth yesterday, I found an article the explains the bundling strategy in a simple manner: http://www.thetimeshareguru.com/blo...n-buying-resale-with-a-right-of-first-refusal


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## Steve Fatula (Feb 26, 2018)

Yep, it's good. Agree on the MF aspect as well, assuming you get use the year of the purchase otherwise it's really part of what you are paying.


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## StevenTing (Feb 26, 2018)

I started to get confused reading all of the back and forth.  Here is what was written in my contract for a 1000 point purchase.

*********************************
3. PURCHASE PRICE: The purchase price for property is $6800.00
$1000.00 Earnest Money Deposit. Under certain conditions described in the Timeshare Purchase Agreement, THIS DEPOSIT MAY BECOME TOTALLY NON-REFUNDABLE.
$5800.00 Balance of Purchase Price paid at Settlement
$6800.00 Total Purchase Price (not including closing costs)


4. ADDITIONAL TERMS:
1. Buyer’s usage to begin 2019. Usage is unreserved.
2. Buyer will pay 2019 maintenance fees and forward. Maintenance fees are currently approximately $712.20. Seller has paid
2018 maintenance fees and will not be reimbursed.
3. Seller will pay Closing Costs of approximately $3500.00. This does not include a title insurance policy.
4. Seller has been advised that Developer may retain the right of first refusal for Marriott's Vacation Club Destinations. Should Developer exercise its right of first refusal, Seller instructs Developer to pay the commission directly to the brokers. Commission check to be made to  XXXXXXXXXXXXXXXXXXXXX. If Developer sends the full funds to the Seller, Seller agrees to pay the commission to the brokers.
5. Should Developer exercise its right of first refusal, Buyer’s Earnest Money Deposit shall be returned to Buyer in full.
*********************************

This is what was presented and this is what was waived by Marriott.  My net cost is $3.30 per point.

I did have Marriott exercise on this exact same wording however the total amount was $6500 or a net cost of $3.00 per point.

Take from it what you will.  Structure your deals however it works for you.  In this scenario, all items are disclosed to Marriott.  In point number 3, we disclose that seller will pay closing costs of approx $3500.  It was understood between the parties that the amount included the transfer fee but as I look through the contract, we don't detail out what is considered closing costs.  In either case, Seller would pay Marriott's closing costs if they exercised and since it's with Marriott, those closing fees are minimal.


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## JIMinNC (Feb 26, 2018)

Steven, thanks for providing that. As we've discussed previously, it doesn't surprise me that Marriott waived ROFR on that transaction given THEIR cost to exercise would have been $6.80 per point. What DOES surprise me is that they chose to exercise ROFR on your earlier transaction at $6500 ($6.50 per point). That makes no sense to me whatsoever. Maybe somebody at Marriott goofed on that first one and when they realized they had to pay the full $6.50 instead of just $3.00, they didn't make the same mistake again. Who knows?


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## Steve Fatula (Feb 26, 2018)

JIMinNC said:


> Steven, thanks for providing that. As we've discussed previously, it doesn't surprise me that Marriott waived ROFR on that transaction given THEIR cost to exercise would have been $6.80 per point. What DOES surprise me is that they chose to exercise ROFR on your earlier transaction at $6500 ($6.50 per point). That makes no sense to me whatsoever. Maybe somebody at Marriott goofed on that first one and when they realized they had to pay the full $6.50 instead of just $3.00, they didn't make the same mistake again. Who knows?



I know, that's why sometimes I think it's just luck, it seems like there is no magic formula sometimes. I was also very surprised when he told me they exercised. They did not exercise at my effective $5 or so per point. I suppose it changes now and then, but, $6.50 is very expensive for them to purchase indeed. That didn't make sense. I think it may have been a mistake also.


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## StevenTing (Feb 26, 2018)

Steve Fatula said:


> I know, that's why sometimes I think it's just luck, it seems like there is no magic formula sometimes. I was also very surprised when he told me they exercised. They did not exercise at my effective $5 or so per point. I suppose it changes now and then, but, $6.50 is very expensive for them to purchase indeed. That didn't make sense. I think it may have been a mistake also.



I had another one with another broker for $6100 that also got exercised.  Twice within a month.  The wording was a little different but it conveys the same deal.   It may have been a mistake but having it happen 2 times to me with 2 different brokers makes me think it wasn't.

************************************
Purchase Price .............................................................................................................................................$6,100.00
Deposit Held in escrow by TRCS, Inc................................................................................................................$1,000.00
Seller to pay estimated resort Transfer Fee of: $3,000.00
Buyer to pay Waiver Fee in the amount of: $95.00
Buyer to pay Admin Fee in the amount of: $99.00
************************************


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## Jayco29D (Feb 26, 2018)

I was told by one of my brokers that the bundling strategy does not matter because the developers look at the total amount being paid. I had proposed this bundling strategy for a super low offer we made on Aulani to be sure we passed. The broker said it does not matter because Disney looks at the actual cost. She said Disney was not exercising on Aulani and not to worry. So we submitted it as a traditional contract and it passed at $82.50 per point on a 200 pt contract a few months ago. That is a pretty low price per point for Aulani and less than half what DVC charges.

Remember, to billion dollar companies, a couple thousand dollars does not matter. I think the developer's goal is to manage the resale market based on their own financial and strategic objectives. We do not know what their objectives are so we sit here scratching our heads. However, I believe these companies are successful because they do, in fact, have long term strategies in mind.

I think this thread got confusing because people went into hypothetical situations and analysis-paralysis. Once I understood what was trying to be communicated, this is not very complicated.


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## Steve Fatula (Feb 26, 2018)

I was told it did matter, and the explanation in the linked article makes sense, would be very surprised if Marriott allowed me to buy at $2.50 otherwise but you do never know. Disney could well be different, but this is Marriott. I am inclined to believe it does make a difference due to the value being submitted to Marriott being higher and the logic involved.


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## Jayco29D (Feb 26, 2018)

That’s what I thought too when I proposed this to a broker last year. Maybe DVC is different than Marriott. In DVC’s case, the broker said she had passed with every offer on Aulani and DVC did not look at how the contract was bundled, just the total cost being paid. I would assume big companies know the games people play. Maybe you just got lucky. The other Steven said 2 of his bundled offers did not pass and he paid a lot more than you did with the offer that did pass. I suspect you may have gotten lucky. How many below market DC contracts have you submitted and have passed? Is this the only one or have you done many like this vs the other way?

I also own at Marriott and I passed ROFR on a low offer for MKO 2 bedroom OV EOY. It was for several thousand dollars less than anything comparable on the market right now. I have never bundled my offers since brokers have told me it does not matter. I have passed ROFR on every offer so far except one that was for $1. LOL

Which brokers do you guys work with? I would like to buy Marriott DC points but the prices seem too high to me compared to deeded weeks. To rent one week in Hawaii is almost 7000 points in high season. That is more than the MF on a deeded week. But I like the DC point concept because there are other advantages.


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## Steve Fatula (Feb 26, 2018)

The reality is we are guessing of course. I am going to try and find out if a seller I know actually got paid the ROFR price. That would be hard data, or at least a strong indicator. Deeded weeks are generally a better deal for sure.


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## JIMinNC (Feb 26, 2018)

Jayco29D said:


> I would like to buy Marriott DC points but the prices seem too high to me compared to deeded weeks. To rent one week in Hawaii is almost 7000 points in high season. That is more than the MF on a deeded week. But I like the DC point concept because there are other advantages.



No question deeded weeks are the most cost effective. The advantage of DC points is the flexibility for traveling to different places and adjusting your unit size/view or length of stay. I'm a huge fan of the Points system, but we still just bought a deeded EOY week at Maui Ocean Club because we know we want to go there every other year. Deeded weeks are far more cost effective for those places you know you want to return to on a regular basis. I considered adding an EOY at Waiohai on Kauai to pair with the Maui week, but ultimately decided that unless or until we were sure we wanted to go to Waiohai on each EOY trip, we would be better off using Points for that week, even given the higher cost. That way, one trip we could go to Waiohai, another trip we could choose Kauai Lagoons or KoOlina. That's the flexibility benefit of Points, especially since we really don't like the process of II trading.


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## Jayco29D (Feb 26, 2018)

Going back to the original discussion of how to report the cost of points on the ROFR.net database, this seems simple (but not really). The database should just ask people to report consistently. Either report price per point without the Marriott transfer fee and closing costs - or report with it. However, the problem is people usually do not remember the details of a purchase. I know I can’t remember my total purchase costs. All I remember is the price for the week (without closing costs) or, with points, the price per point. I would have to have clear instructions about how to enter the data and have my contract in front of me.


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## Steve Fatula (Feb 26, 2018)

JIMinNC said:


> No question deeded weeks are the most cost effective. The advantage of DC points is the flexibility for traveling to different places and adjusting your unit size/view or length of stay. I'm a huge fan of the Points system, but we still just bought a deeded EOY week at Maui Ocean Club because we know we want to go there every other year. Deeded weeks are far more cost effective for those places you know you want to return to on a regular basis. I considered adding an EOY at Waiohai on Kauai to pair with the Maui week, but ultimately decided that unless or until we were sure we wanted to go to Waiohai on each EOY trip, we would be better off using Points for that week, even given the higher cost. That way, one trip we could go to Waiohai, another trip we could choose Kauai Lagoons or KoOlina. That's the flexibility benefit of Points, especially since we really don't like the process of II trading.



Yep, that's how I look at it too. I've been using DC points to extend my owned week in Desert Springs, but why, when, I can just buy a second week since we go there every single year for 20 years, and, we want to stay 2 weeks. The only downside to that is I only use 1BR, so, lockoff can be traded for my enrolled week, but, no way I am paying II for that privilege in the resale week I am buying. So, I suppose I could rent it until such a day that Marriott might allow post 2010 weeks for a decent price (not holding my breath nor counting on it). The lockoff rents pretty good in high season, and would pay some of my MF each year, around half.


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## Steve Fatula (Feb 26, 2018)

So, I did reach someone who sold some points and had a deal structured with included closing costs and transfer fee. Marriott exercised ROFR, and, the key thing is they got paid the higher amount. Marriott did not deduct the $2/pt transfer fee (and closing costs were normal), and therefore they made more money that the intended dollars per point. I think then that this says it has to matter how you structure it.


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## Jayco29D (Feb 26, 2018)

So far, from what I am hearing, Marriott is exercising ROFR on many of these bundled contracts. It seems Marriott does not care if it is bundled and they are willing to buy back weeks at higher prices. It still sounds like you just got lucky at $2.50 or $5 per point (depending on how you are reporting). That’s below the market rate.

I agree it is better for the seller if they bundle in all costs if Marriott is buying bundled contracts at the full contract price.


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## JIMinNC (Feb 26, 2018)

Jayco29D said:


> So far, from what I am hearing, Marriott is exercising ROFR on many of these bundled contracts. It seems Marriott does not care if it is bundled and they are willing to buy back weeks at higher prices. It still sounds like you just got lucky at $2.50 or $5 per point (depending on how you are reporting). That’s below the market rate.
> 
> I agree it is better for the seller if they bundle in all costs if Marriott is buying bundled contracts at the full contract price.



That is what is so maddening to me about ROFR with all of these timeshare developers - Marriott, Hilton, etc. - it seems so random and arbitrary. As you can probably tell from my anal-retentive number crunching earlier in this thread, I'm a "numbers guy" and I like things that seem quantitative and logical. ROFR seems just the opposite of that. There seems to be no rhyme or reason sometimes to what prices they exercise at and at what prices they waive.


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## Steve Fatula (Feb 26, 2018)

Yes Jay, I agree with you. And I agree with Jim as well, I think I said earlier I was probably just lucky. I guess we would all like to know, for example, that $3.77 is the min price to get past ROFR so we can pay $3.77, but obviously not going to happen. I also am a numbers guy. I wanted to be logical about it and structure a deal that makes logical sense to get past ROFR. However, it's clear from Steven and others that probably, was just blind luck, who was working that day, if they just had a recent good life event, who knows what! I guess the old saying that it's better to be lucky than good may apply here. But you would think, there would be value, i.e. profit, for these companies in having a given formula that makes them the most money. So, now I don't feel so good on my bid for Desert Springs that is pending. Even though the last guy made it past ROFR at the same price at the same realtor, recently, will I? Flip a coin I guess.


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## Dean (Feb 27, 2018)

Jayco29D said:


> That’s what I thought too when I proposed this to a broker last year. Maybe DVC is different than Marriott. In DVC’s case, the broker said she had passed with every offer on Aulani and DVC did not look at how the contract was bundled, just the total cost being paid. I would assume big companies know the games people play. Maybe you just got lucky. The other Steven said 2 of his bundled offers did not pass and he paid a lot more than you did with the offer that did pass. I suspect you may have gotten lucky. How many below market DC contracts have you submitted and have passed? Is this the only one or have you done many like this vs the other way?
> 
> I also own at Marriott and I passed ROFR on a low offer for MKO 2 bedroom OV EOY. It was for several thousand dollars less than anything comparable on the market right now. I have never bundled my offers since brokers have told me it does not matter. I have passed ROFR on every offer so far except one that was for $1. LOL
> 
> Which brokers do you guys work with? I would like to buy Marriott DC points but the prices seem too high to me compared to deeded weeks. To rent one week in Hawaii is almost 7000 points in high season. That is more than the MF on a deeded week. But I like the DC point concept because there are other advantages.


I can't speak where Marriott is concerned but for DVC, ikeeping you guessing about the division line is actually the number one goal.


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## Jayco29D (Feb 28, 2018)

Okay, so what is the actual going rate for MVC Destination Points including the activation fee and closing costs? On Redweek, I see a range of $3.50 to about $4.30 for the points plus the $2 activation fee and closing costs. What has typically passed ROFR?


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## Perrygirl (Mar 25, 2018)

I am reading this thread because I want to sell my Marriott Kauai unit that is enrolled in DC. But I wanted to know the limitations for the new owner. If I am understanding this correctly, I must ask at least $3.50 per point which is over $14000 for my 4225 points. THEN MARRIOTT WILL CHARGE THEM $2 per point, over $8000 more to activate the points. That is highway robbery. Who would buy that? 
Currently I can book my Kauai unit and use it or in Sept choose points. Would the new owner that has to pay over $22k have this privilege as well? 
Thanks in advance.


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## sb2313 (Mar 25, 2018)

No, dc point enrollment does not transfer, nor is that pricing applicable to a deeded week. What you quoted applies only to sales of trust points and isn’t applicable in your case.


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## kds4 (Mar 25, 2018)

Perrygirl said:


> I am reading this thread because I want to sell my Marriott Kauai unit that is enrolled in DC. But I wanted to know the limitations for the new owner. If I am understanding this correctly, I must ask at least $3.50 per point which is over $14000 for my 4225 points. THEN MARRIOTT WILL CHARGE THEM $2 per point, over $8000 more to activate the points. That is highway robbery. Who would buy that?
> Currently I can book my Kauai unit and use it or in Sept choose points. Would the new owner that has to pay over $22k have this privilege as well?
> Thanks in advance.



You are free to sell your deeded week. When you sell it, the new owner will receive just the week. The option to convert it to points because it was enrolled in the DC will not transfer with it. The new owner will receive only a traditional week of ownership. As far as how much to try and sell your week for, you could base an asking price around how much it's estimated converted point value is as you describe above. However, that may be more or less than its market value. I'm not that familiar with Hawaii Marriott resale prices to tell you if $14,000 is a realistic price. However, I would recommend trying to gather information on what other similar units are actually selling for and go off that.

Once you have that information, it would be interesting to hear how much comparable resales were sold for relative to their converted points value against the perceived ROFR floor value (as you hypothesized above at $3.50/pp multiplied by your 4225 DC converted points value to arrive at your $14k figure). Not that I think this will provide a true quantitative value, but it would be interesting data IMHO.


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## JIMinNC (Mar 25, 2018)

Perrygirl said:


> I am reading this thread because I want to sell my Marriott Kauai unit that is enrolled in DC. But I wanted to know the limitations for the new owner. If I am understanding this correctly, I must ask at least $3.50 per point which is over $14000 for my 4225 points. THEN MARRIOTT WILL CHARGE THEM $2 per point, over $8000 more to activate the points. That is highway robbery. Who would buy that?
> Currently I can book my Kauai unit and use it or in Sept choose points. Would the new owner that has to pay over $22k have this privilege as well?
> Thanks in advance.



Based on your point value of 4225, it sounds like you own either a 2BR OV at Kauai Beach Club or a 2BR IV at Waiohai. I'm assuming it is every year, since you didn't say anything about EOY. Based on a quick look at some resale sites, it looks like an every year 2BR OV at Kauai Beach Club would sell for the $9000 range and a 2BR IV at Waiohai would likely be around $5000 or so. As others have said, the buyer would just get your week and would be ineligible to enroll it in the DC.


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## TXTortoise (Mar 25, 2018)

Perrygirl said:


> I am reading this thread because I want to sell my Marriott Kauai unit that is enrolled in DC. ....


How many bedrooms and what view do you own?

One way to get a sense of value, keeping in mind these are asking prices...
https://www.redweek.com/resort/P1350-marriotts-kauai-beach-club/timeshare-resales?type=resales


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## Perrygirl (Mar 25, 2018)

Thanks. It is a 2 bedroom ocean view. So yes, I had already looked at Redweek which I love and rent my unit there. It looked like around $8750-$9000 then I looked at the comps for points for sale for $14k for MDC. As I started reading the forum I found the buyer would have to pay about $8000 so there I was shocked and started asking questions. 

So to clarify. I can sell it on on Redweek just as a weeks unit and the buyer can decided to convert it back to points or not correct? 
Or I could sell it for the points on Redweek but I don't think it would sell because of the high price and must convert?


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## JIMinNC (Mar 25, 2018)

Perrygirl said:


> So to clarify. I can sell it on on Redweek just as a weeks unit and the buyer can decided to convert it back to points or not correct?
> Or I could sell it for the points on Redweek but I don't think it would sell because of the high price and must convert?



You can sell it on Redweek (or elsewhere) as a week, but the buyer WILL NOT generally (* see note below) be able to convert it back to points.

You cannot sell it for the points on Redweek. Resale weeks are never (well, almost never*) eligible for points.

* The exception is that Marriott will from time-to-time offer a limited time promotion that will allow owners of normally ineligible resale weeks to enroll their weeks in the DC, but *only* if they buy about 3000 additional DC trust points at a cost of over $30,000.


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## Perrygirl (Mar 25, 2018)

Ok thanks. So I just wonder why there are so many listed for sale on Redweek. I appreciate your help.


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## kds4 (Mar 25, 2018)

Perrygirl said:


> Thanks. It is a 2 bedroom ocean view. So yes, I had already looked at Redweek which I love and rent my unit there. It looked like around $8750-$9000 then I looked at the comps for points for sale for $14k for MDC. As I started reading the forum I found the buyer would have to pay about $8000 so there I was shocked and started asking questions.
> 
> So to clarify. I can sell it on on Redweek just as a weeks unit and the buyer can decided to convert it back to points or not correct?
> Or I could sell it for the points on Redweek but I don't think it would sell because of the high price and must convert?



For your purposes, you are selling a traditional week of timeshare ownership. Forget about points as they do not apply to the sale of your week. I would not even discuss how you have used your week for points as it will only confuse any potential buyer into thinking they are getting something they will not be. Whether the buyer of your week could someday re-enroll it and be able to convert it to points as you have been (which is unlikely under Marriott's current standard terms and conditions), will be something for the buyer to explore in the future.


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## JIMinNC (Mar 25, 2018)

Perrygirl said:


> Ok thanks. So I just wonder why there are so many listed for sale on Redweek. I appreciate your help.



The reason there are so many for sale is a lot of weeks have been sold over the years and some percentage of all owners will have life or preference changes that dictate that they sell their ownership. Traditional weeks are still valuable and usable - even without the points option - for use at the home resort or II trading, so there is still a very viable secondary market for unenrollable weeks.


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## cp73 (Mar 27, 2018)

I find it hard to believe that Marriott wouldn't pick up on the selling price inflated to include the enrollment fees. I have never seen a ROFR form and would be curious to see a completed form. Maybe they really did pass at $2.50 per point. If they didn't realize it I bet the form was not completed correctly according to instructions they provide.


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## Jayco29D (Mar 27, 2018)

They just got lucky, I think.


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## Steve Fatula (Mar 27, 2018)

cp73 said:


> I find it hard to believe that Marriott wouldn't pick up on the selling price inflated to include the enrollment fees. I have never seen a ROFR form and would be curious to see a completed form. Maybe they really did pass at $2.50 per point. If they didn't realize it I bet the form was not completed correctly according to instructions they provide.



Definitely was completed per the instructions. If you've seen real estate contracts, it actually makes sense why it works. Marriott has to purchase at the contract price, that's how it works.


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## Jayco29D (Mar 27, 2018)

Steve Fatula said:


> Definitely was completed per the instructions. If you've seen real estate contracts, it actually makes sense why it works. Marriott has to purchase at the contract price, that's how it works.



I suspect Marriott sees it but they exercise on these contracts anyway as Steve T said. I think you got very very lucky!


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## Steve Fatula (Mar 27, 2018)

Jayco29D said:


> I suspect Marriott sees it but they exercise on these contracts anyway as Steve T said. I think you got very very lucky!



Perhaps lucky sure, but Marriott would have paid twice what I paid if they did exercise as they have to, that's why it works at times. Just don't forget that part! Definitely they have no fixed price at which they exercise. We've seen prices all over the place. So, I suspect there was luck involved, but more "skill" than luck. One armed typing is no fun!


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## JIMinNC (Mar 27, 2018)

Steve Fatula said:


> Definitely was completed per the instructions. If you've seen real estate contracts, it actually makes sense why it works. Marriott has to purchase at the contract price, that's how it works.



This is the important point...the contract is structured at a price that includes all fees, with the seller paying all of those fees. As I understand it, if someone wanted to buy 2000 points @ $2.50/point, the contract would just be written as 2000 points at $9500 with the seller paying all closing and transfer fees. (That $9500 comes for $2.50 per point for 2000 points, plus $2/point transfer fee, plus $500 closing costs, but those would not be broken out in the contract.) So, 2000 points at $9500 with seller paying all fees is all that would be presented to Marriott. So, if Marriott exercises, they would be obligated to pay the seller $9500, and the seller would be obligated to pay Marriott's closing costs (but Marriott's costs would not include the $2/point transfer fee), so the seller would actually net $4.50/point if Marriott exercises, but only $2.50/point if they waive.

The challenge, it would seem, would be finding a seller so desperate to sell that they would be willing to write a deal where they might only net $2.50/point.


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## Steve Fatula (Mar 27, 2018)

Jim, mostly correct, but Marriott is fully aware of the contract, at least in my case. But that is irrelevant, ROFR price is the contract price and that's what they are obligated to pay even though they can see the trick, it was included in the paperwork. The reason sellers would do this is simple. They asked for $2.00 per point, I offered $2.50 with a chance they might make ~double. Took 0 seconds for them to agree of course. This can be done at any price for any seller. If you offer them what they want or more, why wouldn't they? Technically, I got a "bad" deal as I paid over asking, but we felt it was more likely to pass at that price. There's a lot of sellers out there asking for <=$3/pt. At the time I purchased, there were at least 30 sellers at that price point so I had lots of retries if needed.


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## JIMinNC (Mar 27, 2018)

Steve Fatula said:


> Jim, mostly correct, but Marriott is fully aware of the contract, at least in my case. But that is irrelevant, ROFR price is the contract price and that's what they are obligated to pay even though they can see the trick, it was included in the paperwork.



I didn't mean to imply that the costs were being hidden from Marriott, just that the closing/transfer fees probably wouldn't be broken out in detail as the would be on a closing statement. But, even if someone tried to hide them, of course, Marriott would still know what they are. The way our contract was worded for our recent Maui Ocean Club week purchase was basically:

*Property Description: [The appropriative deed descriptive info, resort name, week and unit # , etc.]*

*Purchase price paid by BUYER(S): $X,XXX

Special Terms:
c) BUYER(S) agrees to pay closing cost of $XXX, which includes Marriott's transfer fee, title search, and process of escrow.*

I would think a points contract could be written exactly the same way, so using the 2000 point example I used above:

*Property Description: 8 Beneficial Interests in the MVC Trust*

*Purchase price paid by BUYER(S): $9,500

Special Terms:
c) BUYER(S) agrees to pay closing cost of $4,500, which includes Marriott's transfer fee, title search, and process of escrow.*

Is that essentially how your contract was written?


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## Steve Fatula (Mar 27, 2018)

Jim, mostly yes. In our case, it simply said to reference Addendum A, and addendum A broke it out in detail. I would think detail is actually important in points, but could be wrong. I think you want them to know as buyer would NOT pay transfer fee if ROFR exercised as there is none, which is why they make out. Might protect the seller. My realtor reports that sellers do in fact get paid the ROFR amount, not subtracting transfer fee, if exercised.


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## JIMinNC (Mar 27, 2018)

Steve Fatula said:


> Jim, mostly yes. In our case, it simply said to reference Addendum A, and addendum A broke it out in detail. I would think detail is actually important in points, but could be wrong. I think you want them to know as buyer would NOT pay transfer fee if ROFR exercised as there is none, which is why they make out. Might protect the seller. My realtor reports that sellers do in fact get paid the ROFR amount, not subtracting transfer fee, if exercised.



The key might be certain language in the agreement that specifies that the purchase price, using my example, is $9500 irrespective of actual closing costs, and that Addendum A (in your example) are only estimates. I would think there would need to be something that clearly prevents Marriott from arguing that, if their closing costs are less than the original buyer, then Marriott's price should be less. The devil may be in the details.


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## Steve Fatula (Mar 27, 2018)

JIMinNC said:


> The key might be certain language in the agreement that specifies that the purchase price, using my example, is $9500 irrespective of actual closing costs, and that Addendum A (in your example) are only estimates. I would think there would need to be something that clearly prevents Marriott from arguing that, if their closing costs are less than the original buyer, then Marriott's price should be less. The devil may be in the details.



My understanding from the realtor is that there are details as you mention, not up on that level of detail, but if done "correctly", they must pay the full price, and they in fact do (that is confirmed many times, there is no question on this point). I do believe the word estimate is in there (from my memory we talked in great detail at the time), contract is in a safe so not handy and with (currently) one arm/hand useable, hard for me to open said safe! For me, doesn't matter too much, the realtor handles the exact contract, I just review it and make sure it's all above board. They have done many contracts, points and non points, in this manner with generally good "luck". I know there is definitely some measure of luck involved. But this does increase the odds as it has to since we know Marriott pays the ROFR price.


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