# PAHIO still exercising ROFR on purchases, signed by David Walters.



## rickandcindy23 (May 10, 2007)

So who is in charge at PAHIO?  I cannot believe they are going to stop our recent purchase at Bali Hai.  We just got word this morning from Joyce at Timeshare Transfer.  

Peter Clark, sales manager for Wyndham Fairshare points, just told us 13 days ago that they are not exercising the ROFR and David Walters only did a few anyway, yet they are buying back this week.  I am really unhappy.


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## pattic777 (May 10, 2007)

Hi, Cindy -- I brought this up at owner's coffee (as well as with Peter Clark on Tuesday).  There was a Shearwater Board member there and he asked me how long ago -- I said within the last 6 months -- he did not think that should be happening.  I will be able to see him on Monday.  I would be glad to give him specifics and see if there is anything he can do.  For that matter, David Walters will be at the meeting on Monday.  Yesterday, after the board meeting, they had an owner's forum where no one even peeped (I could not hear and did not realize that they asked for questions before they were closing it out).

Anything I can do for you since I'm here on site?

Patti


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## rickandcindy23 (May 10, 2007)

Patti, I wonder what relationship David Walters still has with the resort, since he sold out?  

As soon as the business phone calls die down today, I am going to call Marjorie and ask why they are exercising this ROFR.  I thought this was done, they were no longer doing it, and was told that very thing by Peter Clark.  

They really are probably angry that we rescinded on the Fairshare points contract.  We were going to buy and found out they lied to us, even though Rick asked the guy to please not lie.  The deal they gave us was okay, but Peter Clark and Carlos told us some untruths, so therefore, we had to rescind.  I didn't really want to be done with this forever.  We have another trip planned next year, set for the end of March, so we thought maybe we would ask the right questions, now that we know the truth about their lies this time.  I just want to be prepared next time with more knowledge of Fairshare.  

As you can see, we own a few PAHIO weeks, including Shearwater, and we stayed there from 4/22-4/29 (and signed their contract on 4/27 for the points).


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## "Roger" (May 10, 2007)

David Walters is still an elected member of the HOA.


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## ouaifer (May 10, 2007)

David Walters is the Chief Executive Officer and Pahio's Chairman of the Board.  As far as the sale of Pahio to Wyndham is concerned, I sincerely doubt whether you will be given any specifics.  Wyndham is now the Management company and in charge of sales, marketing, and the development of the remainder of Bali Hai.

This is just a guess...but if Wyndham VO/Pahio exercised their ROFR on a unit, it could simply be a case of Wyndham wanting to own some inexpensive weeks of Bali Hai ...perhaps for marketing, and promotion, and perhaps for their own points' system inventory.  In the event of ROFR, the _original_ deed of ownership has to have this spelled out.  If it is not in the original deed, and they try to exercise it, you can fight it.


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## "Roger" (May 10, 2007)

ouifer gave a better answer to David Walters current status than I did.  As a member of the HOA, he would have little to do with day to day operations.  On the other hand, when a corporation buys out a business started by an individual, they often retain that individual to manage the company.  Not doing so can be disasterous.  I know of a family owned business that was bought out by Time Warner.  The family was removed from the operations entirely.  They went from making about a half million in profits to twice that in loses in the next year.  Ooops.


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## pattic777 (May 10, 2007)

David Walters is still the "developer" for the remainder of Bali Hai as well.

According to my notes, Wyndham purchased marketing and sales, management, and right to new inventory (so when Walters finishes building a building, he turns it over to Wyndham), but not the development.

I could have misunderstood, but it was obvious from the Ka'Eo Kai board meeting that Walters is very involved in the building of Bali Hai, and has "plans" for renovation of the Ka'Eo Kai phase II buildings.

Patti


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## T_R_Oglodyte (May 10, 2007)

ouaifer said:


> In the event of ROFR, the _original_ deed of ownership has to have this spelled out.  If it is not in the original deed, and they try to exercise it, you can fight it.



It probably wouldn't be in the deed itself, but in the program documents that are incorporated into the deed.  That's where the ROFR is referenced for our Po'pu unit.


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## rickandcindy23 (May 10, 2007)

Steve, the true ROFR is in all contracts after July of 2005.  For now it is just about notifying the resort of a change of ownership, which at that time would alert them of the sale price and what was being paid.  

It will be interesting to see if the call to Marjorie is fruitful at all, as I did call.  She is so nice, truly she is, so I cannot imagine her being vengeful at all.  She asked me to write a letter to David Walters, telling him how much we want the week, so I did.  I hope for good news soon.


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## LisaH (May 10, 2007)

rickandcindy23 said:


> She asked me to write a letter to David Walters, telling him how much we want the week, so I did.  I hope for good news soon.



I think you will get it.  We also went through the ROFR when buying our Shearwater week. A letter to Pahio solved the problem.


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## ajsmithtx (May 11, 2007)

ouaifer said:


> David Walters is the Chief Executive Officer and Pahio's Chairman of the Board.  As far as the sale of Pahio to Wyndham is concerned, I sincerely doubt whether you will be given any specifics.  Wyndham is now the Management company and in charge of sales, marketing, and the development of the remainder of Bali Hai.



Thank you for stating this, it is how I always assumed, how things would be run.


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## ajsmithtx (May 11, 2007)

"Roger" said:


> On the other hand, when a corporation buys out a business started by an individual, they often retain that individual to manage the company.  Not doing so can be disasterous.



This is very true.  I have a friend who ran his family's multi-million dollar business, when they sold the business, the new company retained him within the company.


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## ajsmithtx (May 11, 2007)

LisaH said:


> I think you will get it.  We also went through the ROFR when buying our Shearwater week. A letter to Pahio solved the problem.



Cindy, I hope this works out for you.


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## rickandcindy23 (May 16, 2007)

I am not feeling good about this right now.  It seems that PAHIO is trying to fool people into believing they have ROFR.  If you think about it, PAHIO can resell these units over and over again, so why would they not want to exercise their right?

Since this purchase happens to be from another postcard company (closing through Timeshare Transfer, which tricked me), Vacation Solutions, I would like to know why PAHIO did not stop that transfer, from owner to the postcard company.  They could have offered the owner something for the week and all would have been better off, including me, as I am going to have a poor opinion of PAHIO.  Stopping me from buying seems ridiculous to me...........


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## stratusnj75 (May 16, 2007)

Sometimes the postcard companies don't actually buy from the origninal owner and then sell to you.  I am going thru this right now.  Closing on a Fairfield points contract purchased on Ebay.  Assumed the person with the ad online actually owned the property.  They don't.  And the status of the original owners has changed(owned by married couple but apparently one of them passed several years ago), so closing paperwork had to be redone and resent, causing a delay.

If this was a similar circumstance in your case, that would be why the ROFR is being questioned during your purchase.


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## rickandcindy23 (Jun 14, 2007)

Two months after our payment was received by Timeshare Transfer, we have finally had ROFR waived by David Walters.  This process took two months and we had reimbursed the seller for maintenance fees this year.  I will reiterate that PAHIO actually doesn't have ROFR, not on any of the sales before July of 2005, but they love to play games with people, as with all timeshare salespeople and developers.  We wrote our letter, as we really wanted the week for our own use.  This is one we will use ourselves, as the fees are lower than trading in, and it is mostly just the two of us, anyway.  

We are now going to have to deposit this year's week into RCI because the week is never going to get used by us this time.  It is a lower-level unit, so Fairshare Plus points will be low on this one and will cost too much per point to convert, should we want to try to get the platinum VIP level again.


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## rickandcindy23 (Nov 2, 2007)

*Excuse my rant!*

 Here we are again, facing the same ROFR issue by David Walters!  

I am so tired of the game, and so unwilling to play it anymore.   

Are there any other great resorts in Princeville that don't play these games with people?   Alii Kai is starting to look better all the time.  Cliffs is so different looking, but how do the owners like it?  

How can all of the closing companies believe that PAHIO has ROFR, and who is going to protect the buyers from the process of a phony ROFR?  

Drives me absolutely crazy.  

When we attended the Wyndham presentation, the salespeople were aghast that David Walters was still stopping resales.  He continues, but I don't get the connection--who is in charge, Walters or Wyndham?


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## Dave M (Nov 2, 2007)

Can you elaborate, Cindy? The most recent previous post in this thread was on June 14. Yet you started your post with "Here we are again...." Was the Wyndham presentation a recent one? If so, that's probably what I missed.


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## rickandcindy23 (Nov 2, 2007)

Well, we are buying a two-bedroom this time, purchased for a great price, very recently.  But David Walters is once again exercising ROFR.  

When we went to the sales presentation back in late April, our one bedroom sale was still on David Waters' desk, waiting for approval.  (It finally went through) The Wyndham sales person was surprised at that time that he was still doing that because no Wyndham properties exercise ROFR, and this is now a Wyndham property.  

I guess I should have started a new thread, because digging this one back up might be confusing.  

New sale, same problem.  

Hanalei two bedrooms are going for too much money--too bad because I would love to own there.


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## Dave M (Nov 2, 2007)

Thanks, Cindy. 

Based on your complaint, I gather ROFR was exercised and your purchase was yanked from you. Correct?


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## rickandcindy23 (Nov 2, 2007)

Well, Dave, now the begging begins.   

That is what I had to do last time, along with having to write a shmoozy letter.  I am just not good at begging.


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## tombo (Nov 2, 2007)

I sold 2 different one bed room weeks at  Pahio Kauai Beach Villas in the last 4 months. They were both ROFR'd. I actually just deposited the check for the second one in the bank last week. The ROFR actually was done by Pahio Developments (according to my paperwork and the checks), not Wyndham.

I hate ROFR and wish there was no such thing. I bought both of these weeks in Februaury or March of 2007 for much less than I sold them for in August, and they weren't ROFR'd from me. Now months later I sell them for more than I paid for them and they are ROFR'd. I had purchased 2 one bed rooms to take the family, then shortly after I bought them, I found a 2 bed room which I purchased. I no longer needed the one bed rooms and put them up for sale. I was surprised that I bought all 3 weeks with no problems with ROFR, but when I sold the 2 one bed room weeks they both got ROFR'd. I assume they have decided to ROFR all weeks on Kauai now.


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## timeos2 (Nov 2, 2007)

*ROFR is bad business for the owners - again*

ROFR is NOT a friend to owners. This nonsense shows exactly why. It does little or nothing to keep prices up, it creates confusion and delays that discourage resales and only helps the developers.  Best advice is to avoid resorts/developers that claim to (as Wastegate often does although often they do NOT) have it and especially those that clearly have it.  There are plenty of great timeshares that don't have ROFR and you should move those to the top of your resale purchase list. Trade or rent to get into the ROFR units.  Don't mess with trying to own there unless you actually enjoy hassling with developers over ROFR.


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## Bill4728 (Nov 2, 2007)

In the earlier posts, Cindy's concern wasn't that the PAHIO resorts used ROFR but that the Pahio resorts do not have ROFR and yet have insisted that they do have it and use it.


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## tombo (Nov 2, 2007)

I was simply replying that whether they have the right to ROFR or not, they are doing it at Bali Hai, and at Kauai Beach Villas. They told me, the closing company, and the buyer that they had the right, and they stold 2 sales from my rightful buyers by exercising ROFR. I don't know whether they legally should have been able to do it, I just know for 100% sure that they did.


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## rickandcindy23 (Nov 2, 2007)

Tombo, they don't have ROFR on any contracts written before July of 2005.  They have some sort of clause in their contracts before that date that says something about being notified ahead of the sale.  That is not ROFR.  They just want owners to contact them, so they have an opportunity to buy it back before a new buyer gets the chance.  Certainly on a resale purchase, where you are selling one that you bought on the resale market is not their contract, so I don't understand how they got by with it.  

I think I need a lawyer to write a letter for me.    I will do just that, if I must.  I know a few lawyers.  

Those Lawai Beach resales are looking better all the time.


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## tombo (Nov 3, 2007)

Cindy, I am going to PM you the address and phone number that I had to use for the Pahio KBV ROFRs.


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## DaveNV (Nov 3, 2007)

Cindy and Tombo, I'm curious:  Are these units they're trying to ROFR (or on which they have exercised ROFR) oceanfront units?  And maybe Annual use?  I ask because I bought a 1br/2ba Lagoon View EOY back in June, and it closed without a hitch.  Cindy, you told me at the time I'd have to beg to get past ROFR, but it went right through.  The deed said the previous owner had purchased in 2000.  

So I wonder if they're trying to grab oceanfront weeks because they have higher resale value, especially if it's a developer doing the reselling.

It can't just be about the money:  I saw a 1br/1ba KBV auction end on eBay earlier today with no buyer.  It had an opening bid of $199, no reserve, and it had zero bidders.  I expect it'll be relisted shortly.

Dave


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## rickandcindy23 (Nov 3, 2007)

Dave, the units are not oceanfront.  None of Bali Hai has even a peek of an ocean view.  They are just actively selling the units, so grabbing all units in a ROFR process is a cheap way to resell the same thing, at a tidy profit each time.  

What I want to know is why doesn't PAHIO tell all owners, in the next newsletter, they will buy back weeks?  Why do owners have to go through the process of listing (or worse, using a Postcard Company) to sell their shares, if PAHIO wants them?  It is very upsetting being the buyer in these cases, where PAHIO pretends to have ROFR.  

I wrote a complaint to the Hawaii BBB, stating that PAHIO exercises the ROFR, even though they have no right and it is not in the contracts before July of 2005.  I did that last night.  It can take up to 30 days to hear anything.  The week will be long gone by then.


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## tombo (Nov 3, 2007)

I bought 3 weeks very cheaply in the spring and they all closed before July with no ROFR being exercised. Since that time they are ROFRing everything that is what they consider reasonable. I bought 2 -1 bed room 2 bath EOY lagoon view units for about $600 each plus closing costs (a total of under $1400 for each). Neither was ocean front or annual. I found a buyer for one week for $2400 and they ROFR'd it. I used ROFR to my advantage and asked the buyer if he would give me more for my other week to see if it would pass ROFR. He said the highest I will go is $2500. I sent them the notification and they ROFR'd it too. They didn't ROFR either of these weeks when I bought them on e-bay earlier this year, but ROFR'd both of them at a much higher price late this summer. 

As for the one that didn't sell on e-bay, that isn't how ROFR works. They never outbid anyone,they never offer to buy one from an owner for any price, they simply see what a week sold for, and at their leisure they decide if they want to buy it for that price. If it had sold on e-bay for $1 or $2000, they would have decided if they wanted to buy it only after they knew exactly what they would have to pay by stealing it from the rightful buyer.


I hate ROFR, but in this case I used it to my advantage. I only had one buyer who offered me more than $1500, but I got to to sell both of my weeks with only one buyer because of ROFR. You might can do the same. Sell your week for a good profit to a friend and notify Pahio. If they don't ROFR tell them the sale backed out but you have a new buyer who will pay less. Keep dropping the price and changing buyers till they ROFR it or you get a real buyer and sell it to them.


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## rickandcindy23 (Nov 6, 2007)

PAHIO decided to "waive their ROFR" and let us buy the week.   

I thought I would let all of you know, because certainly they wouldn't exercise a right they don't have, but I guess they do get by with it for most purchases because closing companies and resale companies just let them.  

I was planning to write the Hawaii Real Estate Commission about it, but since the letter writing method worked for us, I won't make a fuss this time, but for the future, don't worry about that ROFR with PAHIO and just push a little harder to get what you want accomplished.


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## armrecsys (Nov 6, 2007)

*ROFR,fair price*



rickandcindy23 said:


> Patti, I wonder what relationship David Walters still has with the resort, since he sold out?
> 
> As soon as the business phone calls die down today, I am going to call Marjorie and ask why they are exercising this ROFR.  I thought this was done, they were no longer doing it, and was told that very thing by Peter Clark.
> 
> ...


I am sure when all is said and done, you will get your new timeshare week.
If you can when all of this is complete, can you let some some of us know what price was offored. I want to know if we should waste are time putting in any offor below what every you paid.
Thank you
Linda


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## rickandcindy23 (Nov 6, 2007)

Linda, of course PAHIO has no ROFR on any contracts written before July of 2005, so the pretense is just a game.  If they did have ROFR, they wouldn't have let us buy this week, that is for sure.  

I just love PAHIO resorts, now Wyndham.  I think the area is beautiful and the condos are every bit as nice as the hotel brands.


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## DaveNV (Dec 13, 2007)

*Update on ROFR at Kauai Beach Villas issue?*

Okay, so I won an eBay auction a few weeks ago for an oceanfront unit at KBV, and have been waiting for documents from the escrow company, specifically Charlotte Decker at Aloha Hawaiian Connection Services.  I called her today, since I haven't received any papers as yet.  Charlotte said she was told by Laurie at Old Republic Title (I think) that this deal won't pass KBV's ROFR because of the low sales price.  My seller bought the unit in 2001, and I'm buying it for the (amazing) low-low price of $279.  (Ebay rocks!)

I explained to Charlotte that deeds dated prior to July of 2005 do not have ROFR.  She said she didn't know anything more than what Laurie said.  So I called Laurie.  Laurie echoed what Charlotte said, so I told her about the July 2005 ROFR limit.  She said she didn't know anything about it, but would submit it anyway, to see what KBV says.  She expects to have an answer by this Friday.

So my question for TUG is this:  If I need to write a letter to David Walters (or whomever) to beg for this unit, what address and name am I supposed to use?  What is the legal reference for this July 2005 date we all refer to for wheher they have ROFR?  If I need to defend this purchase, what is the best way to do it?  Is there specific verbiage in the original deed I should cite?  I really want this unit.

Thanks,
Dave


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## rickandcindy23 (Dec 13, 2007)

You can call PAHIO today and ask for Marjorie, then tell her you want to send a letter to David Walters. 

At this point, I believe a call to Wyndham might be in order as well.... after all, it is no longer PAHIO, it is Wyndham.  So why is David Walters still doing this?

I pointed out to Marjorie that most of these low prices are eBay sales; therefore, the owner isn't getting the money, the PCC is.  She knew it as well.  The PCC's actually get reimbursed for closing costs from PAHIO, on top of the sales price, without doing any work for it.  It really is another reason I have such disdain for the PCC's because they play this game with PAHIO, then PAHIO pays them the full price you paid, with transfer fees/ closing costs.  The PCC is better off taking PAHIO's deal, and both parties know it.  

Sad for the original owner and the potential buyer, because both lose to the developer and PCC, the two companies that make money, hand over fist already.


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## DaveNV (Dec 13, 2007)

Thanks, Cindy.  I'll call Marjorie today.

For the record, even though it's an eBay deal, this sale is direct from the owner, not through a PCC.  (Already been there and done that a few times.)  What made this deal happen, I think, was that the seller (a private party) copied an ebay ad from a well-known PCC, and changed only certain portions of the text.  A casual viewer would think it was a PCC ad (at least I did.)  It wasn't until the end of the auction, with me as the only bidder, that I found out this was not a PCC sale, that it was, in fact, from the actual private party owner.  He told he he'd hoped to make more on the sale, but "a deal is a deal>"  He is quite a nice guy.

Now, if I can only minimize the ROFR hassles...

Dave


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## cancun dish (Dec 13, 2007)

I know that this is stressful for you as a buyer and legalities need to be followed but, I think the ROFR from a developer is one of the best things that can be done long term to create a real resale market.  Most of us on here have taken advantage of the lack of a structured or supported resale market.  

I really do think it is great that the concept is becoming more common and wish that all developers would embrace it.


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## jacknsara (Dec 13, 2007)

jeepguynw said:


> ... What is the legal reference for this July 2005 date we all refer to for wheher they have ROFR? ...


Aloha,
At the risk of pointing you to info you've already read:
http://www.tugbbs.com/forums/showthread.php?p=139469
I posted excerpts in two or three different postings within the thread
Jack


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## rickandcindy23 (Dec 13, 2007)

jeepguynw said:


> Thanks, Cindy.  I'll call Marjorie today.
> 
> For the record, even though it's an eBay deal, this sale is direct from the owner, not through a PCC.  (Already been there and done that a few times.)  What made this deal happen, I think, was that the seller (a private party) copied an ebay ad from a well-known PCC, and changed only certain portions of the text.  A casual viewer would think it was a PCC ad (at least I did.)  It wasn't until the end of the auction, with me as the only bidder, that I found out this was not a PCC sale, that it was, in fact, from the actual private party owner.  He told he he'd hoped to make more on the sale, but "a deal is a deal>"  He is quite a nice guy.
> 
> ...



Dave, the seller will also need to write a letter, saying they would like to sell to you.  

Cancun Dish, that is probably true, however if there is no ROFR, then certainly the resort shouldn't pretend to have it. 

I still don't get the relationship between PAHIO and Fairfield.  Fairfield salespeople were definitely disappointed that David Walters was still trying exercise the right of first refusal, when he doesn't have it.


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## cancun dish (Dec 13, 2007)

Cindy,

You are right if this contract was not under that provision then of course the seller should have the right to sell to whom.

I was not inferring that I think the "ROFR" is good for you but, for the long-term health of the industry I really like the ROFR.  

There have been several posts on other boards regarding the never ending burden of timeshares and the lack of value that some have.

I look at used cars and the fact that there are used car dealerships, certified cars by "insert name brand" has not hurt new car sales in fact the fact that they are somewhat liquid has increased new car sales....   Just my two cents good luck on your purchase and congrats!!!!


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## DaveNV (Dec 13, 2007)

jacknsara said:


> Aloha,
> At the risk of pointing you to info you've already read:
> http://www.tugbbs.com/forums/showthread.php?p=139469
> I posted excerpts in two or three different postings within the thread
> Jack




Thanks, Jack.  That's what I was looking for.  Not sure why/how I missed it before.  Might be because that thread started before I was a TUG member.

Dave


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## tombo (Dec 14, 2007)

Cancun, ROFR isn't good for anyone but the resort. ROFR doesn't raise the  sale price one penny. If a seller sells his week for $100 after trying to sell it for 6 months at any price, then the resort steals it from the righful buyer for $100, not one penny more. If you call the resort and ask them to buy your week for $100, they will tell you that they don't buy back weeks.

Please don't believe the Developer's lies that ROFR helps keep prices high. If they actually said we will not let a week sell for less than $5000 (for example), and they paid $5000 for any week for sale, then they would be helping keep the prices high. If they do what they actually do using ROFR, then all they do is steal the week to resell themselves for the exact price it already sold for. They don't bid the price higher, they don't pay you more than you already agreed to sell it for, they simply steal it for the same price you already sold it for if they want it. I can show you plenty of weeks that sold for under $100 on e-bay, then they were ROFR'd for under $100 by the developer. That is not keeping resale prices high. ROFR is bad for the seller and buyer!

Comparing it to the used car analogy, you buy a new car, drive it 5 years, try to sell it for 3 months, and finally agree to sell it to your neighbor for $500. The dealer can now tell you that you can't sell it to your neighbor because they want it back on their lot for $500 you were selling it to your neighbor for and they are going to sell it on their lot for $5000. You didn't get a dollar more, your neighbor who should own it is mad, and the next time you try to sell your neighbor or his friend a used car they say no thanks because the dealer will just steal it out from under me. Bad deal for everyone but the car dealer.


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## Abaco-Bob (Dec 14, 2007)

Wait a minute. If you the seller get the $100 from either the buyer or the developer why is it bad for you.  You still got your $100.


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## jacknsara (Dec 14, 2007)

Aloha,
quoting from my first post in the other thread I pointed to earlier

There was another thread on TUG that discussed who the injured party (if any) is in ROFR. In this case, I contend that both the seller and the buyer (us) would have been injured. Had the developer bid then the seller would get more. Exercising a ROFR when a potential buyer has submitted a substantially higher bid also harms the potential buyer. As it turns out, the buyer was not harmed, but the seller realized less potential $$.

Jack


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## cancun dish (Dec 14, 2007)

I respect your opinion that ROFR does not help anyone but, the developer.

I believe that long-term the ROFR will help all of those except those of us that know how to buy on the pennies on the dollar.

Timeshare is such an "immature" market in compared to cars/houses/boats etc.  These items all require ongoing maintenance and the market has created a relatively liquid marketplace in which to obtain a fair price on a resale.  

The timeshare market does not have a mature "used" market and thus we have all bought great users/traders for pennies.  I own at Casa Maya in Cancun which we used really for a beach membership.  Our unit is an every other year and the mfees are around $425 per year.  With the membership we gained day usage of the beach and discounts.  A beach membership in Cancun would have cost us a minimum of $35 per month and we would not have had a week of timeshare every other year.  For that we paid $125 plus closing.  We also own Sedona Pines in Sedona.  This is not a fancy resort although it is gold Crown this was bought on a whim as I want to take my family to the Grand Canyon.  For this we paid a 1$ plus closing.

Neither of these have developer right of FR but, I wish they did.  I do believe that long-term it will help create a resale market which will "hopefully" reflect in the underlying value of our collective timeshares.

I also believe that points (don't own but, love) also creates some price stabilization but, that is a whole nother issue which I won't become involved in.

Again I hope Rick and Cindy get their timeshare!!!


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## tombo (Dec 15, 2007)

If Casa Maya in Cancun did have ROFR, the resort would own your week instead of you, for exactly $125 (what you paid for it). If you like your week be thankful they didn't have ROFR. ROFR would have hurt you the buyer because you offered the owner more than anyone else, agreed to buy it from the owner, sent your deposit to the closing company, and a month to 3 months later you find out the resort stole it from you and you get your money back.  You now won't make an offer on a week at that resort again because you are mad that they took the week you rightfully bought at your agreed upon price and feel like they will do it to you again.

Now the poor sellers who are trying to sell their weeks have one less potential buyer to sell their week to. I had a week for sale and a buyer told me that he would like to buy my week but he had the previous 2 sales he had purchased rofr'd by the resort and didn't want to go through the headache again with no week to show for it. I begged him to make me an offer anyway and he finally did and the resort ROFR'd it. He said that is it, I am going to buy a week where there is no ROFR. 

The week sold for exactly our agreed upon price.  I didn't get a penny more than I had negotiated with the buyer I found after spending money advertising my week for sale. I the seller found the buyer (not the resort), negotiated a price (the resort won't buy from you for any price), and the buyer that saved my tail by agreeing to buy my week doesn't get to own it. I didn't have another offer besides this buyer in 6 months. 

I personally won't buy at a resort any more that I know ROFR's because I know that many buyers are reluctant to make an offerif I ever want to sell the week, and I don't want to do all the paperwork and send in my money only to have a good deal I negotiated stolen by the developer. 

Resorts only ROFR at desired resorts as shown by Marriott and others only exercising their right at high demand resorts. Why not ROFR at all resorts if it is done for the good of the owners? Developers only ROFR if it is good for them price wise, and location wise. It doesn't stabilize any market, it is simply a cheap never ending supply of weeks for the resorts to steal so they will have  perpetual inventory to sell. I wish I could see the sale prices of all sold weeks and have the option to buy any week I want (no obligation to buy though) for their exact sale price, no bidding, no negotiating. I know developers say it helps keep values high, but their lips are moving, so you know they are lying.


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## DaveNV (Dec 15, 2007)

If all timeshares had ROFR, I wouldn't own any.  If I have to pay big bucks to get them, I'll vacation in other ways, or rent when I want to use them.  I'm ONLY into timesharing because it was inexpensive to get in the door, and relatively inexpensive to stay there.

I don't agree that the timeshare resale market is the same as a tangible resale market like for cars or homes.  Vacation ownership by it's very nature is fluid, and intangible.  In most cases, I feel you're buying an idea, a period of time, that happens to have a deed attached to guarantee you that time slot.  The resale market for such a thing isn't likely to have the same money attached as it did from the developer.  So ROFR only truly benefits the developer, who wants to get something cheaply, that they'll turn around and sell again to an unsuspecting buyer for too much money.  

If the value of something is "what the market will bear," then the value of a resale timeshare should be only what a buyer (you) would be willing to pay.  ROFR and the developer shouldn't enter the picture.

Dave


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## Jya-Ning (Dec 15, 2007)

cancun dish said:


> I believe that long-term the ROFR will help all of those except those of us that know how to buy on the pennies on the dollar.



It depends.  At this moment, there is no strong support for the resell market.  So it means the ROFR will restrict the potential buyer pool.  As a seller, it means you have a more illiquid assest.  It will cause money to maintain that assest and to run ads.  And the only reason the price of the resort is x dollar is because of developer artifically set that way.

Most of the time, resorts only use ROFR on the places they actively sell.  So once they done the selling, the price on that places drop.   Also, some developer only excerise on certain amount, if so, the price will stay in that level.  The worse is if they excerise in certain day and stopped in other day even when they are still sell.  It is not like when economic is booming, they will increase the level to 50%, then when economic is recess, they drop the level to 30%.  

As a buyer, it means it will cause you more trials and it may or may not get any results.  

As an owner that does not plan to sell the week, it means the chance of some owners that in need of selling and don't pay the MF will be higher than if you have a more liquid assest.  Thus the potential you need to pay extra is higer.  And it does not mean anything to your TS value.  When you try to sell, if all you get is low ball offer, that is what you will get paid anyway.

Jya-Ning


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## cancun dish (Dec 15, 2007)

Guys,

I am simply stating my opinion.  With full disclosure I am involved in the industry but, I do not work with a developer or an exchange company.

I have always felt that the reason that the industry was not bigger was because of the lack of a viable resale market.  This is a topic at every convention and every developer believe it or not would like a stronger resale market.  In the end if there was some hope down the road that the value of the week would be more than $1 many more people would own.  (in my opinion)

As a timeshare user I love the fact that I can almost all day long by a two bedroom spring break week in prime south florida (pompano bech for example) for under $1000 with closing fees.  If it were a condo the value would be what n the 300-500k range?

One other poster was right and I would not own at Casa Maya or Sedona pines if they had rofr in place or even if they occasionally surfed ebay.  Product cost for a new timeshare (sticks and bricks) is typically about 25% of the purchase price so on a $20,000 timeshare the product cost is 25% of that.  If they can rofr for less than that their profit is increased greatly.  

I guess i tend to think long term and best case scenario and really do see the fact that developers will take on their product again as a good thing.  Yes it is a pain in the behind for us trying to buy.

Could the ROFR not be avoided through a slightly trickier move such as simply changing the name on the deed?  not sure the escrow company could hold the money on that...


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## rickandcindy23 (Dec 15, 2007)

I can see both sides of the ROFR issue.  I think it would benefit all of us if the resale values were not in the toilet, but I understand wanting to buy the bargains.  I also think it is downright rotten that resorts won't just buy weeks back, especially if they are in sales, like PAHIO is.  PAHIO could just say iheir newsletter, "If you are thinking of selling, or you no longer want to own your timeshare week, please let us know, and we will make you an offer."  That way, there is a point at which the owner can say, "I have an offer from PAHIO for more than your offer, so no, I won't take what you are offering."  

The worry over PAHIO's exercising their ROFR is keeping resale prices down, too.  How many people just look at that info on a listing and decide not to bid?  The PCC's shouldn't be supporting the ROFR at all.


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## jacknsara (Dec 15, 2007)

cancun dish said:


> ...  This is a topic at every convention and every developer believe it or not would like a stronger resale market. ...


Aloha,

I suspect that the reason developers are concerned about a stronger resale market is that some of them recognize that they can only continue their current business model as long as consumer information flow is so inefficient (in economic terms).  As long as information flow is inefficient, there is much money to be made in developing and selling more units.  No one knows when the constraint to information flow will crumble.  When that happens, most developers with projects in their pipelines will see their rate of developer price sales suddenly crumble and they will be unable to sell at resale prices without losing a fortune.  I'm guessing we're locked in a tragedy of the commons system archetype for those of you familiar with system archetypes.  With the proliferation of vacationers carrying laptops and other web access devices, I'm guessing the developers current business model will hit a wall within a handful of years.  Go TUG.  

One way to strengthen the resale market would be to dramatically reduce the rate of development of new units.  Any developer who tries to do that unilaterally is afraid of losing their market position and high paying jobs.  If they try to coordinate by agreement, they get arrested and potentially convicted.

Enough prognosticating for one night.

Jack


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