# ROFR is still alive..



## ada903 (Nov 16, 2011)

Just found out from the title company Marriott is exercising ROFR on our two bedroom two bath annual oceanview Kauai Beach Club sale at $7,000.  I assume they have a buyer for it.  The title company has not seen a Marriott ROFR in years.  It's probably an isolated incident.


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## PamMo (Nov 16, 2011)

You've been ROFR'd a few times lately, haven't you? Maybe there's a star next to your name that screams "Great Deal!!! This is too good to pass upl!!!"    Were you buyer or seller this time? I hope Marriott pays up faster than Starwood does on ROFR's.


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## Ron98GT (Nov 16, 2011)

At $7,000 I'm really suprised that it didn't pass.

I see 1 BR's sold for under $1,000 on ebay.

Maybe Marriott bought it and will resell it under points?


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## MOXJO7282 (Nov 16, 2011)

Marriott Hawaii  OV  2 BDRMs are a different story than a 1BDRM. I'm glad I got mine through at $6100 last year. One sold on eBay recently for $5800 so wondering if they scoped that one too.

Nice resort and the MFs went down 5.9% this year so maybe there a demand in the points inventory.


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## ada903 (Nov 16, 2011)

Yes, I got ROFR-Ed by Starwood and I sold them my Westin Ka'anapali week.  I am a seller once again


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## EKniager (Nov 16, 2011)

The rumors of the death (of timeshares) have been greatly exaggerated!:hysterical:


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## Lardan (Nov 16, 2011)

EKniager said:


> The rumors of the death (of timeshares) have been greatly exaggerated!:hysterical:



I feel the same way.  To me timeshare ownership is a luxury primarily for the middle class who have been hit hard in this economy.  I think when the economy rebounds timeshares will ride the rebound with it.

Am I right about this? I don't know, but have to keep the faith you know.


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## EKniager (Nov 16, 2011)

Lardan said:


> I feel the same way.  To me timeshare ownership is a luxury primarily for the middle class who have been hit hard in this economy.  I think when the economy rebounds timeshares will ride the rebound with it.
> 
> Am I right about this? I don't know, but have to keep the faith you know.



Well, not all seasons at all locations make economic sense to me.  Having said that...

What's more cost effective for a family of 4 or 5 than driving to Myrtle Beach or HHI in the summer and spending $170 per night (assuming $1,200 MF) for a two bedroom condo at a fabulous, amenity rich resort.  You can save money by cooking in the kitchen or grilling outdoors and there are no rental car or airline fees.  Additionally, you can dream about good financial years where you can afford to splurge and trade to a tropical paradise.  Hotel rates, at nice (Marriott's) to high-end places (Ritz Carlton's)will go up.  I am comfortable placing that bet.

American families will deleverage and get their economics repaired.  They may not go to Hawaii every year but they will will go on road trips and go to the beach in the summer.  You can double-down on that!


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## Lardan (Nov 16, 2011)

I read hotel prices are expected to increase by 10% this year. For us with a family of five two rooms adjoining is really expensive just for the lodging.  Add eating out every meal for five it is so expenisve.  Also no friends or relatives visiting.  

Usually when we go vacation to one of our timeshares family members visiting take care of a lot of the food.

People going on vacation is something that will never go out of style.


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## MOXJO7282 (Nov 16, 2011)

Lardan said:


> People going on vacation is something that will never go out of style.



This is very true. I know its the only thing that keeps our sanity. I can't wait until we can take even more time off.  I have a lot of days but my kids school is the most restrictive thing for us know. Once our son is in college 6 years from now we'll really be traveling fools.


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## Lardan (Nov 16, 2011)

MOXJO7282 said:


> This is very true. I know its the only thing that keeps our sanity. I can't wait until we can take even more time off.  I have a lot of days but my kids school is the most restrictive thing for us know. Once our son is in college 6 years from now we'll really be traveling fools.
> 
> TSing is becoming more and more for the experienced owner. Keep in mind Tuggers make up a very small portion of TS owners. The vast majority of owners are much, much less saavy.



Our plan is to get our three kids educated, out of the house working, and give them the timeshares with the MFs.  Of course we will then be the visitors.


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## Michigan Czar (Nov 16, 2011)

EKniager said:


> American families will deleverage and get their economics repaired.  They may not go to Hawaii every year but they will will go on road trips and go to the beach in the summer.  You can double-down on that!



I agree, my family only goes to Hawaii every other year.


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## thegortons (Nov 17, 2011)

ada903 said:


> Just found out from the title company Marriott is exercising ROFR on our two bedroom two bath annual oceanview Kauai Beach Club sale at $7,000.  I assume they have a buyer for it.  The title company has not seen a Marriott ROFR in years.  It's probably an isolated incident.




Last week, I was surprised (shocked?) to find out that Marriott has decided to ROFR the sale of my Manor Club 2bd LO Platinum unit.  Sales price was $5200.  So maybe the tide is changing a little.


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## ada903 (Nov 17, 2011)

I am in the process of buying some very nicely priced Marriott plats at Newport Coast and Waioahi, I will let you know if ROFR is exercised.  I should hear back in the next 1-2 weeks about Marriott Newport.


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## m61376 (Nov 17, 2011)

thegortons said:


> Last week, I was surprised (shocked?) to find out that Marriott has decided to ROFR the sale of my Manor Club 2bd LO Platinum unit.  Sales price was $5200.  So maybe the tide is changing a little.



Very strange. There have been many sales for much less than that that they passed on. Hey- good for you, though-you got top dollar. Just proves that the market has all spectrums of buyers.


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## rpw (Nov 17, 2011)

*I'm betting it's SpinCo*

They know if they want to sell points they need inventory.  Why not pick it up cheap at existing resorts than build new?


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## EKniager (Nov 17, 2011)

Marriott has all the supply/demand and pricing numbers.  We just guess based on a statistically small segment of sales (eBay, Redweek, etc.).  The market is dynamic and their data is real-time.  I think they buy where they have demand.  It is probably safe to assume they are making a profitable purchase.


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## timeos2 (Nov 17, 2011)

thegortons said:


> Last week, I was surprised (shocked?) to find out that Marriott has decided to ROFR the sale of my Manor Club 2bd LO Platinum unit.  Sales price was $5200.  So maybe the tide is changing a little.



The tide is against you. You only get a ROFR based sale IF you already found a willing buyer for that amount. You don't get one penny more nor do they have a standing offer of $XXX to buy. Once word gets out that deals get queered by ROFR the offering price goes DOWN as no one wants to have to deal with all the effort to buy only to have a ROFR snatch it from them.  It is a bad thing all around. Thankfully it is hardly ever used anymore - a benefit to both owners & buyers as the only benefit of ROFR belongs to the developer that uses it.


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## EKniager (Nov 17, 2011)

timeos2 said:


> The tide is against you. You only get a ROFR based sale IF you already found a willing buyer for that amount. You don't get one penny more nor do they have a standing offer of $XXX to buy. Once word gets out that deals get queered by ROFR the offering price goes DOWN as no one wants to have to deal with all the effort to buy only to have a ROFR snatch it from them.  It is a bad thing all around. Thankfully it is hardly ever used anymore - a benefit to both owners & buyers as the only benefit of ROFR belongs to the developer that uses it.



You got it backwards.  A) The seller gets the same price they agreed to-- no harm at all; B) Offers won't go down, they will go up.  Supply will be reduced and buyers will fear their low numbers will get stolen by Marriott; C) Low priced comps will disappear from the market (shifting leverage to the seller) and providing current owners with support for their developer priced assets.  Think about it.  If you bought at $25K, you'd feel a whole lot better about your investment if the re-sales on eBay were going for $15K than $8K. 

Although I believe Marriott is only doing this when they are certain it is a profit generating transaction, you can be sure they understand the secondary market.  It only helps their developer sales when they can show that value is retained or at least not going to zero.


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## timeos2 (Nov 17, 2011)

EKniager said:


> You got it backwards.  A) The seller gets the same price they agreed to-- no harm at all; B) Offers won't go down, they will go up.  Supply will be reduced and buyers will fear their low numbers will get stolen by Marriott; C) Low priced comps will disappear from the market (shifting leverage to the seller) and providing current owners with support for their developer priced assets.  Think about it.  If you bought at $25K, you'd feel a whole lot better about your investment if the re-sales on eBay were going for $15K than $8K.
> 
> Although I believe Marriott is only doing this when they are certain it is a profit generating transaction, you can be sure they understand the secondary market.  It only helps their developer sales when they can show that value is retained or at least not going to zero.



No, unfortunately studies have shown that prices go down when ROFR is involved - you are falling for the sales weasel spin if you think otherwise. Sorry.


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## EKniager (Nov 17, 2011)

timeos2 said:


> No, unfortunately studies have shown that prices go down when ROFR is involved - you are falling for the sales weasel spin if you think otherwise. Sorry.



LOL, I have not spoken with a sales rep about this.  It's common sense and a well established rule of the marketplace that as the supply/demand shifts towards less supply or greater demand the price increases.  I can cite loads of research on this if you'd like.  Can you post a link to the research that specifically has studied the Marriott timeshare system and the ROFR's affect on re-sale pricing?


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## SueDonJ (Nov 17, 2011)

I think ROFR exists only to help the developers' Resales Offices - it's a way for them to pick up certain inventory on the cheap when they have ready and willing buyers waiting for it.  If it's routinely exercised then it may influence buyers who want certain inventory to increase their bids exponentially but it does nothing to boost the value of lesser-demand inventory.  It means nothing at all to those buyers who don't care about buying certain inventory but are in the game to get anything as long as the price is bargain-basement.

But I'm at the point now where I've heard too many reports on TUG of the closing companies playing their own games with ROFR paperwork.  They falsely report the purchase prices in order to spur developers onto exercising it (thereby inflating the sellers' and their takes,) and in some cases the sellers/buyers don't know it's been done until all the paperwork has been filed.  The more reports like this that we hear, the more it occurs to me that it's useless to report and track ROFR unless the only ones used for tracking are the ones where the actual developer-signed ROFR waivers or claims are seen with your own eyes.


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## jimf41 (Nov 17, 2011)

And heeeeere we go!!


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## m61376 (Nov 17, 2011)

Sue-
You bring up an interesting point. What perplexes me, though, is what incentive does any seller have to inflate the price for the deal to go through ROFR? It would seem to be an easier transaction if through Marriott


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## timeos2 (Nov 17, 2011)

EKniager said:


> LOL, I have not spoken with a sales rep about this.  It's common sense and a well established rule of the marketplace that as the supply/demand shifts towards less supply or greater demand the price increases.  I can cite loads of research on this if you'd like.  Can you post a link to the research that specifically has studied the Marriott timeshare system and the ROFR's affect on re-sale pricing?



Not the Marriott specifically as no one has wasted the time to look at that level of detail but if you search back about two years when the ROFR debate was raging you'll find the link to the University study that looked at ROFR in general and it's net affect on the market. At best it's neutral but that study concluded it is a negative and led to lowered prices due to the additional uncertainty it adds to the marketplace.  In no case did they find it raised prices - they only found it lowered demand and prices as a result of ROFR.  When you think it through that only makes sense. Why would anyone offer MORE for a purchase than the market calls for and have to deal with more delays and paperwork?  

It makes perfect sense, as has often been pointed out here, to LOWER your bids for any ROFR both to compensate for the extra hassles, the possible loss of the sale after you hammer out a deal and the fact that all the buyer will get in either case is the agreed amount. Raising that number makes zero sense - if you lose one move on to the next (there are plenty out there) or look to a different resort.  Plus many simply won't offer to buy at all - and you must have a real buyer in hand to activate ROFR - so the seller has to make extraordinary efforts to find such a buyer willing to risk a loss of the sale - and that buyer pool is reduced by the very presence of ROFR.  So the owner / potential buyers lose all the way around while the ROFR developer cherry picks only what they desire while the owners have to do the dirty work.  No way it's a benefit anyone except the ROFR holder. The rest is wishful thinking and/or sales BS.  Sellers tend to want to think it somehow benefits them until they try to sell and fully realize it does not.  

Thus one of my key timeshare rules. Never buy a resort with ROFR if you ever plan to sell.


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## SueDonJ (Nov 17, 2011)

m61376 said:


> Sue-
> You bring up an interesting point. What perplexes me, though, is what incentive does any seller have to inflate the price for the deal to go through ROFR? It would seem to be an easier transaction if through Marriott



If the ROFR waiver is submitted to Marriott for more than the agreed-upon purchase price and Marriott waives, the seller and buyer can still agree to the original terms and go through with the sale.  No difference with what's paid by the buyer or what's gained by the seller.  But say a buyer offers $100, the ROFR waiver is submitted for $1,000, and Marriott exercises ROFR.  The buyer loses out based on a fraudulent ROFR, and the seller (and any commissioned agents) receive proceeds from Marriott based on the fraudulent $1,000 price.

Any scenario involving falsified ROFR may cause problems down the road if the purchase price on the deed is different from the ROFR waiver, which means one or the other must be changed prior to officially filing.  It's pretty much a guarantee that the deed will be changed to reflect the figure that Marriott has already reviewed.  That's fraud, for one thing.  But for another, in the states where real estate taxes are billed directly to the owner and/or are based on purchase price, it's possible that the owner will be assessed taxes based on the higher price than what s/he actually paid.

(And least of all, the ROFR database that TUGger dioxide compiles may have errors.  How can anybody be sure of what figure was actually waived or claimed by Marriott, unless the official ROFR waiver is reviewed?  I think it's possible at least a few are not correct because not everybody reviews their paperwork.  As well, some closing companies make you chase them for the ROFR waiver - how many can be bothered when they have all the other pertinent papers?)


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## SueDonJ (Nov 17, 2011)

jimf41 said:


> And heeeeere we go!!



:hysterical: :hysterical:   Can't help but laugh!


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## yumdrey (Nov 17, 2011)

timeos2 said:


> No, unfortunately studies have shown that prices go down when ROFR is involved - you are falling for the sales weasel spin if you think otherwise. Sorry.



Not always.
Hilton is exercising ROFR actively and their prices has gone up quite much these days.
I am happy that I bought something during the last 2 years. If I need to buy something, the prices is almost double now!


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## wvacations (Nov 17, 2011)

Closing companies were inflating the price on the ROFR. I got back paper work on a resale I bought and they included the ROFR papers they sent to Marriott (probabaly a paper I was never suppose to see.) They had "accidently" inflated the selling price by several thousand dollars. I think they were hoping Marriott would bite and they would get a better selling price. I made them resubmit the paper work with the correct price.


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## timeos2 (Nov 17, 2011)

yumdrey said:


> Not always.
> Hilton is exercising ROFR actively and their prices has gone up quite much these days.
> I am happy that I bought something during the last 2 years. If I need to buy something, the prices is almost double now!



I'm happy that you feel prices are rising (a bit of a surprise as offers posted are going down - do you mean retail?).  But in any case attributing it to ROFR is a fallacy. IF they are indeed rising on resale it is the overall quality/ reputation NOT ROFR as that plays no role in raising price.  It can however lower it.  

Glad you are happy with your purchase - enjoy!!


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## rsackett (Nov 17, 2011)

I thought there was a rule against turning posts into ROFR arguments on the Marriott board.  

Ray


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## Beefnot (Nov 17, 2011)

The rationale that ROFR reduces prices has never made any sense to me.  I've read several threads containing these arguments and it defies economic logic.  I'd be interested to review any credible study and their methods for arriving at this conclusion.

The issue as I see it is when ROFR is not consistently applied.  If consistently applied, there is an established floor beneath which a buyer knows that s/he will not be able to obtain the item.  The buyer realizes that in order to obtain that thing of value, s/he must pay something above that floor.  However, if ROFR is executed seemingly at random, then it arguable has little to no effect on prices, since there is no firm floor established, and thus no constriction of supply below an established price.


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## Beefnot (Nov 17, 2011)

Hm, upon further reflection, I can see how an inconsistent application of ROFR could, theoretically, negatively impact prices.  If the bearer of ROFR excercises it at erratic price points, then perhaps the demand for that good/service is diminished because buyers no longer have confidence in the market value of the good/service (as well as their ability to obtain that good or service), and thus lose interest in participating in the market for said good/service.

I as a buyer will not knowingly overpay for an item.  So if I, as a buyer have no confidence what the "market value" of that item is because I may or may not be able to obtain it at $5 one day, $5,000 the next, and then $150 the next day, then what is the true value of the item for which I am comfortable paying?

Just thinking out loud.


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## timeos2 (Nov 17, 2011)

*Here is one University Study - ROFR is BAD*

Here is a study that concludes the effect to the SELLER is negative.  It strongly recommends against granting any ROFR for any reason.  

Part of conclusion:

"In short, the net benefit to the seller and special buyer is usually negative." AND

"Regardless of the possible reason for the existence of a ROFR, it is clear that this is a benefit that must not be conferred lightly by the seller to a buyer. Furthermore, as a ROFR is ex post inefficient, there is a case to be made against contractual arrangements that grant a ROFR [or MCC] in perpetuity."

Such a never ending ROFR is EXACTLY what these types of rules are. So again, avoid them if at all possible both as a buyer & seller.  They do not benefit YOU.


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## PamMo (Nov 17, 2011)

Purely anecdotal, but I have chosen not to bid on timeshares I thought for sure would be ROFR'd. It just seemed like a waste of my time. IMO, when it's exercised randomly, ROFR simply favors the developer/management company, allowing them to cherry-pick prime units at low prices to sell to their retail buyers.


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## timeos2 (Nov 17, 2011)

PamMo said:


> Purely anecdotal, but I have chosen not to bid on timeshares I thought for sure would be ROFR'd. It just seemed like a waste of my time. IMO, when it's exercised randomly, ROFR simply favors the developer/management company, allowing them to cherry-pick prime units at low prices to sell to their retail buyers.



A perfect example of "shrinking the buyer pool".  This leads to a lack of and lower offers than a free market would likely bring.  Thank you for posting.


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## dioxide45 (Nov 17, 2011)

Gee, knew it wouldn't take long for this to turn in to the semi annual TUG argument of the merits of ROFR.:deadhorse: 

BTW, this is the thread where that is supposed to take place.


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## Judi Kozlowski (Nov 17, 2011)

*ROFR*



timeos2 said:


> Not the Marriott specifically as no one has wasted the time to look at that level of detail but if you search back about two years when the ROFR debate was raging you'll find the link to the University study that looked at ROFR in general and it's net affect on the market. At best it's neutral but that study concluded it is a negative and led to lowered prices due to the additional uncertainty it adds to the marketplace.  In no case did they find it raised prices - they only found it lowered demand and prices as a result of ROFR.  When you think it through that only makes sense. Why would anyone offer MORE for a purchase than the market calls for and have to deal with more delays and paperwork?
> 
> It makes perfect sense, as has often been pointed out here, to LOWER your bids for any ROFR both to compensate for the extra hassles, the possible loss of the sale after you hammer out a deal and the fact that all the buyer will get in either case is the agreed amount. Raising that number makes zero sense - if you lose one move on to the next (there are plenty out there) or look to a different resort.  Plus many simply won't offer to buy at all - and you must have a real buyer in hand to activate ROFR - so the seller has to make extraordinary efforts to find such a buyer willing to risk a loss of the sale - and that buyer pool is reduced by the very presence of ROFR.  So the owner / potential buyers lose all the way around while the ROFR developer cherry picks only what they desire while the owners have to do the dirty work.  No way it's a benefit anyone except the ROFR holder. The rest is wishful thinking and/or sales BS.  Sellers tend to want to think it somehow benefits them until they try to sell and fully realize it does not.
> 
> Thus one of my key timeshare rules. Never buy a resort with ROFR if you ever plan to sell.



From a resale agents  point of view the resale prices go up when there is an ROFR present.  When I first started working with Hilton eleven years ago the resale prices went up 57% the first year they started to exercise.  At this point they have the most stable resale prices along with Disney Vacation Club.  Marriott will stablize their prices by exercising.  That is just my professional opinion.


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## Beefnot (Nov 18, 2011)

timeos2 said:


> Here is a study that concludes the effect to the SELLER is negative.  It strongly recommends against granting any ROFR for any reason.



This particular game theorem deals with asymmetric information and or private values which i believe is being misapplied to a public auctions, and more specifically when a series of values are or can be known over time.  I'm still skeptical.  But in allusion to the article and to my prior musing, when the favored bidder has no apparent _actual_ valuation, and instead appears to exercise ROFR haphazardly, this could be more disruptive to the demand curve and thus to market values than the mere existence of a ROFR.


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## RX8 (Nov 18, 2011)

Beefnot said:


> This particular game theorem deals with asymmetric information and or private values which i believe is being misapplied to a public auctions, and more specifically when a series of values are or can be known over time.  I'm still skeptical.  But in allusion to the article and to my prior musing, when the favored bidder has no apparent _actual_ valuation, and instead appears to exercise ROFR haphazardly, this could be more disruptive to the demand curve and thus to market values than the mere existence of a ROFR.



You lost me at "hello".


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## Beefnot (Nov 18, 2011)

Another analysis which appears more intuitive to me (and easier to read...though still very academic and not geared to he layman).


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## ampaholic (Nov 18, 2011)

EKniager said:


> You got it backwards.  A) The seller gets the same price they agreed to-- no harm at all; B) Offers won't go down, they will go up.  Supply will be reduced and buyers will fear their low numbers will get stolen by Marriott; C) Low priced comps will disappear from the market (shifting leverage to the seller) and providing current owners with support for their developer priced assets.  Think about it.  If you bought at $25K, you'd feel a whole lot better about your investment if the re-sales on eBay were going for $15K than $8K.



The fly in your soup is that it presupposes there is a fixed constant demand for Marriott timeshares and that they have no competition.

When the resale market is destabilized by aggressive ROFR-ing (a new word?) the buyers will just as likely move over to the competitors rather than ratchet up their demand for Marriott timeshares.

Imaging Caddy buying back all used Caddy's so that the cheapest Caddy you can find is $30,000? Do you think all the used car buyer's will just roll over and pay $30,000 for a used Caddy - or will a large percentage say "the heck with that" and go buy the used $12,000 Lincoln, or the $17,000 used BMW?

Offers won't go down or up - they will go elsewhere.


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## ada903 (Nov 18, 2011)

Looks like I threw a grenade in a mine field.

I am patiently waiting to see if Marriott will exercise ROFR on the properties I am buying - they are below typicaly eBay pricing, so if they are exercising it constantly, they would buy them back, if not, it must have been an isolated incident where they had a committed buyer on the wait list.


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## AwayWeGo (Nov 18, 2011)

*R. O. F. R. = R. O. F. L.*




Judi Kozlowski said:


> From a resale agents  point of view the resale prices go up when there is an ROFR present.


Other way round. 

When the resale prices go up sufficiently, then the timeshare companies with ROFR start snapping up the low-priced offerings for themselves. 

When resale timeshare prices are in the tank, the timeshare companies with ROFR just let it slide. 

ROFR *=* ROFL. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## jdunn1 (Nov 18, 2011)

Why no mention of the Platinum Marriott Manor Club that sold last week or the week before on ebay for something like $200?  If Marriott really has been exercising ROFR, then why would they pass on the $200 property and instead take a 5.5k one?  Just saying.

...and I like reading the different threads in this post, but I was hoping this post could be used to report other ROFR instances.  Instead, it has attracted a bunch of Marriott owners who want to vent about how/why their weeks should be worth more and now ROFR proves it.


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## timeos2 (Nov 18, 2011)

jdunn1 said:


> Why no mention of the Platinum Marriott Manor Club that sold last week or the week before on ebay for something like $200?  If Marriott really has been exercising ROFR, then why would they pass on the $200 property and instead take a 5.5k one?  Just saying.
> 
> ...and I like reading the different threads in this post, but I was hoping this post could be used to report other ROFR instances.  Instead, it has attracted a bunch of Marriott owners who want to vent about how/why their weeks should be worth more and now ROFR proves it.



It doesn't appear that Marriott is exercising ROFR except in an extremely rare case now & then.  So there is nothing to report except "no ROFR".


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## jimf41 (Nov 18, 2011)

Interesting take on a way to increase profit.



AwayWeGo said:


> Other way round.
> 
> When the resale prices go up sufficiently, then the timeshare companies with ROFR start snapping up the low-priced offerings for themselves.
> 
> ...



I always thought it was the other way around.


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## windje2000 (Nov 18, 2011)

It all makes me wonder if the demand for occupancy from trust points owners (who, generally speaking, own relatively few points) is skewed towards 'low priced' points occupancy, which is prompting VAC to buy resales in places like Manor Club to fulfill that demand.


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## kjd (Nov 18, 2011)

Without starting that old and tortured discussion about whether ROFR raises resale market prices it seems that VAC will purchase units where they either have a buyer in waiting (or feel that they can make a quick sale) or they need a unit to balance out their inventory.  Otherwise, to ROFR because prices are cheap, they will end up in the same financial mess as before the spinoff.  That is, stuck with a lot of unsold inventory and no reasonable expectations to get rid of it.  And, this time they won't have the security of mother Marriott to bail them out.

It's a good bet that VAC really doesn't fully know the inventory needed to support their point systems.  It'll take a few years of operation to know that.  Therefore, we might see selected ROFR purchases by VAC but IMO they're pretty much done with ROFR unless the market really moves upward.  Right now they can buy all the silver weeks they want at prices below $1,000.  Gold for a few bucks more.  They won't touch most of them. They would have to pay the maintenance costs.

ROFR is a great deal for VAC because buyers have to get them to sign off before a sale can be closed.  It's just that there's not much advantage left for them use it.


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## flyboy0681 (Nov 21, 2011)

My purchase at Frenchman's Cove for $2,500 passed muster with Marriott.


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## larryallen (Nov 21, 2011)

SueDonJ said:


> But I'm at the point now where I've heard too many reports on TUG of the closing companies playing their own games with ROFR paperwork.  They falsely report the purchase prices in order to spur developers onto exercising it (thereby inflating the sellers' and their takes,) and in some cases the sellers/buyers don't know it's been done until all the paperwork has been filed.  The more reports like this that we hear, the more it occurs to me that it's useless to report and track ROFR unless the only ones used for tracking are the ones where the actual developer-signed ROFR waivers or claims are seen with your own eyes.



I find this really hard to believe.  I can't imagine any reputable, or semi-reputable, company would falsify documents in small time transactions like that. I just don't see it. Maybe this has happened once but I don't think it's the norm to have a title company falsifying closing prices.


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## larryallen (Nov 21, 2011)

PamMo said:


> Purely anecdotal, but I have chosen not to bid on timeshares I thought for sure would be ROFR'd. It just seemed like a waste of my time. IMO, when it's exercised randomly, ROFR simply favors the developer/management company, allowing them to cherry-pick prime units at low prices to sell to their retail buyers.



I am sure you are not alone in this thinking but how much time could one really waste? Plus, they exericse on well less than 1% (approaching 0%) so I just can't imagine even giving it a moment's thought. In the highly unlikely event you get ROFR'd then at least you know you were buying at a good price, you find another and you try again.


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## SueDonJ (Nov 21, 2011)

larryallen said:


> I find this really hard to believe.  I can't imagine any reputable, or semi-reputable, company would falsify documents in small time transactions like that. I just don't see it. Maybe this has happened once but I don't think it's the norm to have a title company falsifying closing prices.



Here's a recent thread where a TUGger was told by the closing company (Timeshare Closing Services) that it's "the way they do business."  Check out Post #27 in particular.

This is the first time that I can remember seeing a company admit to the practice, but there have been a number of threads on TUG over the years which mention it occurring.


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## Steve (Nov 21, 2011)

larryallen said:


> I find this really hard to believe.  I can't imagine any reputable, or semi-reputable, company would falsify documents in small time transactions like that. I just don't see it. Maybe this has happened once but I don't think it's the norm to have a title company falsifying closing prices.



Believe it or not as you wish, but it just happened to me.  Based on my conversations with the title company, I'm quite sure that it wasn't a rare exception.

Steve


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## JudyS (Nov 22, 2011)

larryallen said:


> I find this really hard to believe.  I can't imagine any reputable, or semi-reputable, company would falsify documents in small time transactions like that. I just don't see it. Maybe this has happened once but I don't think it's the norm to have a title company falsifying closing prices.


I really don't know how often companies falsify ROFR documents. But, I would point out that many of the timeshare sellers on eBay are PCCs, which aren't known for their ethics. The "title companies" these eBay sellers use may not be real title companies, but just another branch of the PCC.

Regarding the very low priced Manor Club Platinum weeks on eBay, do we have any way to know if these sales actually passed ROFR? (Assuming Marriott was even informed of the actual selling price.) Has anyone here bought one of these eBay Manor Club Platinum weeks lately? 

Also, does anyone think there is any chance Marriott would ROFR a Gold season property? Or, are Platinum (or equivalent) season weeks the only ones facing the possibility (however slight) of ROFR?


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## EKniager (Nov 22, 2011)

larryallen said:


> I am sure you are not alone in this thinking but how much time could one really waste? Plus, they exericse on well less than 1% (approaching 0%) so I just can't imagine even giving it a moment's thought. In the highly unlikely event you get ROFR'd then at least you know you were buying at a good price, you find another and you try again.



I totally agree with you!


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## yumdrey (Nov 22, 2011)

I believe there are many owners who know about false ROFR price for their newly purchased weeks. When they get deed, they can see the prices on it.
Even if they see $8000 on the deed, who cares? They actually paid only $500 - $1000 and the weeks are theirs already.
And many of them just don't say anything to public because their prices are very low and satisfied for the result.
TUG members are talking about ethics, but many ebay people seek for great opportunity to buy brand name resort for bottom low prices.
So those pcc sellers, in-house closing co and bargain deal seekers are perfect team.

I too, got a fake contract from TCS months ago for a Hilton week. 
I cancelled my purchase because I didn't want to be a part of that fraud and didn't want anything to happen to my existing Hilton account.
But Steve and I are only a few who complained about it.
Many others will be quiet and keep buying weeks from them.


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## Fredm (Nov 22, 2011)

Folks, you are not devious enough.

Think about it. 

If the sale price is altered (for ROFR purposes) by a PCC, it is because they *don't* want it exercised. 

PCC's usually transact the deal with a Power of Attorney. They do not actually own the timeshare.
If Marriott exercises the ROFR, the sale proceeds go directly to Marriott's owner of record. NOT to the PCC. 
Marriott does not use the "closing company" that submitted the transaction for review.

The PCC (and their "closing agent") want to avoid this possibility at all costs.
Not only do they not get the money from the sale, the real owner finds out they did not actually surrender the deed when they forked over the money to be rid of it. 
Some of them may not take kindly to being duped, after forking over a few thousand.

So, the "closing company" inflates the sale price. If a buyer inquires about it (as Steve did), they are told it was done in their best interest, to protect their purchase.
Isn't that considerate of them?

Now, if the seller is indeed the actual owner then the price may be inflated in the hope of having it exercised at the higher price. But, that does not appear to be the case most often.

I don't know the specifics of Steve's transaction. But, I am guessing the seller was a PCC.


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## timeos2 (Nov 22, 2011)

The whole idea of ROFR is a rip off.  The fact that it leads to questionable efforts to avoid or override it is just another of many downsides.  Best to avoid any dealing with it by simply saying NO to any resort / system that has it. There are plenty out there that are as good or better so why mess with it? Or, in the alternative if you MUST have resort X do whatever it takes to get a true market price & ignore the ROFR and any games involved. It's the closing company taking the risk as long as you aren't asking them to do it.  

The whole mess is a big nightmare.  Why anyone wants to become involved in any way is a mystery to me.


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## richardm (Nov 22, 2011)

Well said, Fred. Very few things are as one-sided as a postcard company transaction.


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## rrlongwell (Nov 22, 2011)

timeos2 said:


> A perfect example of "shrinking the buyer pool".  This leads to a lack of and lower offers than a free market would likely bring.  Thank you for posting.



And possably increased prices for the older contracts that do not have right of first refusal.  The cherry picking rational is exactly what the ROFR was designed to do.  If you are a small seller you may not have access to the market to get a good price.  They holder of the ROFR then gets it at what is basically a whole sale price to then resell at a higher price.


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## ada903 (Nov 22, 2011)

Fred, good to see you!

Today I got news that I passed ROFR on an very well priced Newport Coast platinum week (below ebay bottom pricing).


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## windje2000 (Nov 22, 2011)

+1

Fred, good to see you!


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## kjd (Nov 22, 2011)

I'm probably missing something here but where's the harm in all of this ROFR business? Obviously, it's the buyer who is somewhat harmed if the property is ROFR'ed away. As long as the deposit is refunded promptly the ROFR'ed buyer is free to continue looking for another property.  All they lost was time but may have learned more to make a better deal next time.  The seller isn't harmed because they have a guaranteed sale no matter what happens. The title company is going to collect their fees whether ROFR is used or not.  They are not harmed either.

The discussion here is more pointed at business ethics and the value of reported information.  While most would agree that transparancy is valuable the fact is that ROFR is always at the front end of each transaction and has very little to do with the buyer or the seller after ROFR is either waived or implemented. It also has very little to do with true market pricing IMO.  

The ethical questions are another matter.  I find that I do not like to do business with dishonest people even if they treat me with integrety and someone else not.  Unfortunately, the timeshare industry seems to attract the ethically challenged.


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## mamadot (Nov 22, 2011)

Just attended a sales presentation at Ko Olina. They are using ROFR to buy back units to convert to pts. It's all about the TRUST points now!


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## TheTimeTraveler (Nov 22, 2011)

mamadot said:


> Just attended a sales presentation at Ko Olina. They are using ROFR to buy back units to convert to pts. It's all about the TRUST points now!





I'm not sure why they would be using ROFR on weeks when they have a brand new building that offers plenty of unsold Destination Points....

Was the salesperson believable 




.


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## yumdrey (Nov 22, 2011)

mamadot said:


> Just attended a sales presentation at Ko Olina. They are using ROFR to buy back units to convert to pts. It's all about the TRUST points now!



I don't believe this 100%.


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## Bogey1 (Nov 22, 2011)

SueDonJ said:


> Here's a recent thread where a TUGger was told by the closing company (Timeshare Closing Services) that it's "the way they do business."  Check out Post #27 in particular.
> 
> This is the first time that I can remember seeing a company admit to the practice, but there have been a number of threads on TUG over the years which mention it occurring.



I used Tmeshare Closing Services several years ago after I found a buyer for a Maui week. After the deposit and contracts were signed, they notified the buyer and myself that Marriott was going to take the unit. I asked to see the correspondence from Marriott. Timeshare Closing service delayed sending it to me for some time. When I finally received the copy, it said that Marriott was NOT going to take it.  While filled with legalese, it's only a one page document!!  Of course, the buyer had moved on to purchase elsewhere. 

The closing service offered nothing other than to put it on ebay for a fraction of the price. Eventually I found another buyer myself and they agreed to not charge for the closing, but it was a lousy experience.  Personally, I would never, ever use Timeshare Closing services again.


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## Fredm (Nov 23, 2011)

Adriana and Windje2000,

Thank you! Nice to be missed.


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## taffy19 (Nov 23, 2011)

Isn't it possible for the sellers to contact the Marriott direct and ask them to send them the ROFR document that is required for this?  This way, you know that it is filled out correctly.

After that is done, open an escrow with a Hawaiian Company.  I believe that this is a requirement now even if you sell it FSBO.  Am I correct?


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## Fredm (Nov 24, 2011)

> Isn't it possible for the sellers to contact the Marriott direct and ask them to send them the ROFR document that is required for this?  This way, you know that it is filled out correctly.



All Marriott needs is the signed and accepted Purchase Contract between buyer and seller. The contract must specify the deeded unit and week number.




> After that is done, open an escrow with a Hawaiian Company.  I believe that this is a requirement now even if you sell it FSBO.  Am I correct?



Correct. If money is changing hands, a Hawaii timeshare must have funds placed with a licensed Hawaii escrow agent.


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## mamadot (Nov 25, 2011)

I should have said some Marriott properties. Not at Ko Olina.


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## bdh (Nov 26, 2011)

kjd said:


> I'm probably missing something here but where's the harm in all of this ROFR business? Obviously, it's the buyer who is somewhat harmed if the property is ROFR'ed away. As long as the deposit is refunded promptly the ROFR'ed buyer is free to continue looking for another property.  All they lost was time but may have learned more to make a better deal next time.  The seller isn't harmed because they have a guaranteed sale no matter what happens. The title company is going to collect their fees whether ROFR is used or not.  They are not harmed either.



While logical; if everyone looked that way, alot of the TUG world would having nothing to debate - but time and time again, the dead horse is beaten here on TUG.


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## Ddaley (Nov 27, 2011)

*Rofr is being exercised*

Hi All,

I have tried to purchase week a Whaiohai week 51 fixed (twice) and a floating week 1 to 51 (once) this year only to have Marriott exercise ROFR.  I understand that this is because the only inventory the trust owns in Hawaii for weeks 51 and 52 is Kauai Lagooons which has only a very small beach area.  

Thought this might be of interest.  

Denise


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## taffy19 (Nov 27, 2011)

How interesting but the Waiohai was almost sold out completely so that makes sense.

There is a TUGger here (dioxide45) who is maintaining a database of all the Marriott resorts where the Marriott exercised their right to buy the timeshare so they are the buyer at the end.  Most TUGgers will add this information here if Marriott exercised this right.

Here is the website and you may want to fill it out as the more people fill it out, the better the database is.


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## Arb (Nov 27, 2011)

*Trust Points*

So is anyone selling trust points in the secondary market?


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