Bidding on a resale with current ROFR activity -- should I bother?

[marmite]

I have been looking at the ROFR database and am discouraged. It looks like I have a small chance of passing ROFR on the traditionally low-priced traders. It is so strange to see the occasional sale that slips through for $5 or $1 yet they exercise ROFR on the same unit type listed for 2k. It makes no sense!

I was hoping for a 2BD lockout every year platinum. I can't see a clear pattern to pricing (such as a calculation of DC point values to my offer price), or an EOY unit being any easier to pass ROFR than an annual, it is all over the place. I'm also not going to offer twice as much just to see if I can overpay my way into Marriott.

As a buyer, do you think there is any down-side to making an offer and seeing how it plays out? Will I lose money trying (i.e. are there any hard costs that the realtor listing the sale would pass on to me even if I don't pass ROFR)?

For the seller, they get their money either way, so they're not going to care if I buy I or Marriott does. I don't want to bang my head against a wall trying to get the Marriott preference window in II.

Thanks.

 

[Steve Fatula]

Correct, it does not make sense. Therefore, my plan was to keep buying until it passed ROFR. i.e., if x price did not pass rofr, I bought another one for x.

Some believe it "must" make sense, so if price x fails, they offer x+y on the next one. No reason to.

The way I looked at it was this. If Marriott exercised ROFR, I helped someone into selling a unit they no longer wanted. A good deed. Yes, I wish my purchase went through, but, at least something good came out of it.

I got no costs as a buyer (other than small amount of time) with repeated efforts until I got past ROFR.

 

[kds4]

The 'rhyme and reason' of ROFR is another one of those things that are 'behind the curtain with the wizard'. It could be differences in the person handling the ROFR clearance on that particular transaction (like a car appraiser who has guidelines but 2 appraisers may get a slightly different final value), or which resorts they are looking to add to the 'points trust' based on demand trends and needing more inventory in a given location. Bottom line, I would just keep offering unless you absolutely want a specific resort, specific unit, specific season, or available resales where you want are hard to come by. If that's the case, you can choose to offer more to increase your 'chances' of passing ROFR (not knowing if it will really make a difference in the end or not).

 

[CPNY]

I have been looking at the ROFR database and am discouraged. It looks like I have a small chance of passing ROFR on the traditionally low-priced traders. It is so strange to see the occasional sale that slips through for $5 or $1 yet they exercise ROFR on the same unit type listed for 2k. It makes no sense!

I was hoping for a 2BD lockout every year platinum. I can't see a clear pattern to pricing (such as a calculation of DC point values to my offer price), or an EOY unit being any easier to pass ROFR than an annual, it is all over the place. I'm also not going to offer twice as much just to see if I can overpay my way into Marriott.

As a buyer, do you think there is any down-side to making an offer and seeing how it plays out? Will I lose money trying (i.e. are there any hard costs that the realtor listing the sale would pass on to me even if I don't pass ROFR)?

For the seller, they get their money either way, so they're not going to care if I buy I or Marriott does. I don't want to bang my head against a wall trying to get the Marriott preference window in II.

Thanks.

Buy a mandatory vistana resort. But I do think about MVC interval exchanges. How easy is it to get trades? Do they hold more inventory back for their DC program or is It all based on deposited weeks? I’m not familiar with exchanges and deposits at all.

 

[marmite]

Oh, but does it have to be one or the other? Why not buy a Vistana Mandatory AND a Marriott... ? A girl shouldn't have to settle for just one!

 

[CPNY]

Oh, but does it have to be one or the other? Why not buy a Vistana Mandatory AND a Marriott... ? A girl shouldn't have to settle for just one!

Works for me lol

 

[JIMinNC]

I have developed personal opinion/theory about the unpredictability of ROFR based on listening to many Marriott Vacations Worldwide earnings conference calls and looking at some of their investor presentations on the corporate Investor Relations website. The attached photo is from an investor presentation a few years ago. They fund the inventory of points in the Trust they have to sell by a combination of new development and repurchases of inventory (ROFR, deed-backs, foreclosure, etc.). It seems they have a target mix of "New build" versus repurchases that yields a targeted "product cost" average. I suspect the times they are more aggressive and pay higher prices is when they need to increase their mix of repurchased inventory or when the number of deals presented for decision is lower (i.e. - they need to get more repurchase into the mix to manage their product cost). I suspect the times they let some pass through at lower prices are at the times when they have already exercised a lot recently, and don't want to get too much inventory into the Trust pipeline. While it's a guessing game for us, it's also a guessing game to some extent for them since they don't know what inventory is going to be presented for ROFR decision until it shows up in their inbox. If they had just exercised on a bunch, they might have to pass on some others they would normally exercise unless it was too good of a deal to pass up. I suspect they also have a bias in favor of high demand intervals, as that inventory is needed in the points system to allow current owners to successfully book; and since about 66% of their sales are to existing owners, they need happy owners who can book what they want in order to feed their sales machine.

While the philosophy others have offered of setting your price and sticking with it, and if you fail once, try and try again until you get one through, is certainly a rational, smart way to proceed, it's not the only way. On our two resale purchases, my priority was getting the deal done the first time - both to avoid the extra time and work to find and negotiate a new deal, but also because what I was looking for (EOY Odd 2BR OV at Maui Ocean Club and EOY Odd 2BR IV at Waiohai) are not things that there are myriads of on the market at any one time. It takes some time and sometimes lots of effort calling and communicating with brokers to find these. Sometimes there were multiple units on the market, other times months or weeks went by with none to be found. So, when I was ready to buy, I wanted to make it work the first time, so I tried to offer a high enough price to hopefully increase my chances of passing ROFR. Did I perhaps overpay compared to what I might have been able to get these for? Maybe. But I was OK with that (up to a point) to get the deal done the first time and not have to start searching again.

 

[Steve Fatula]

Absolutely Jim, in your case, you made a good move. The OP though was talking about low priced traders, which I suspect have a lot of potential sellers. For them, if they want maximum value, stick to the price. However, if they want quick and painless, your way would be better. I didn't care in my case if it took 2 years.

For me, there was no search, had a realtor who had over 50 listings of what I wanted, was simple. If you are looking on your own, could be more work for sure.

 

[JIMinNC]

Absolutely Jim, in your case, you made a good move. The OP though was talking about low priced traders, which I suspect have a lot of potential sellers. For them, if they want maximum value, stick to the price. However, if they want quick and painless, your way would be better. I didn't care in my case if it took 2 years.

For me, there was no search, had a realtor who had over 50 listings of what I wanted, was simple. If you are looking on your own, could be more work for sure.

That many listings of the same thing is certainly a very different dynamic than what we faced, and it would be tempting to try the lowball approach and try to slip something past the ROFR genie. On the other hand, just negotiating a deal and presenting offers/paperwork involves some hassle factor, so even in the situation where a lot of inventory exists, each person has to figure out how many times they want to go through the same process. For a low priced trader, since the price is low to begin with, the cost premium for taking the easy, one-shot attempt route should also be much lower. If you over pay for a $1500 week by a whopping 50%, that's only $750. When you consider what you'll pay for that week over 15-30 years in maintenance fees, that $750 overpayment is peanuts.

 

[marmite]

Absolutely Jim, in your case, you made a good move. The OP though was talking about low priced traders, which I suspect have a lot of potential sellers. For them, if they want maximum value, stick to the price. However, if they want quick and painless, your way would be better. I didn't care in my case if it took 2 years.

For me, there was no search, had a realtor who had over 50 listings of what I wanted, was simple. If you are looking on your own, could be more work for sure.

Thanks Steve and @JIMinNC, I agree with both of you. As for what you are saying Steve, yes I am looking for a low priced trader and there seems to be a lot of availability. I'm not looking for a $1 ebay auction, but trying to keep it around 2k (asking prices seem to be $1700 to about $3,000). There is availability of what I'm looking for, but it is also the stuff that Marriott is grabbing up (they love Platinum too!). I'm not sure I am so patient that I could wait 2 years... I think you have a tonne of self control!

My first visit to TUG was to research (to death) purchasing Disney's Beach Club Villas, which has ROFR. I definitely wanted to do it right the first time, without overpaying yet having a good shot at passing ROFR so went with Jim's method (can we coin a new term here?). Fortunately the ROFR pattern was somewhat predictable and it helped me come up with my offer price. I did it right the first time and was very grateful to all the help from the wonderful people on TUG.

Cheers.

 

[Steve Fatula]

I didn't say I did wait 2 years, only took a few offers to pass. I am cheap on such things. The paperwork was really zero since all the agent had to do was change the seller name. Really I didn't spend 5 minutes on many offers. Was just patient in this case as I knew what I wanted and I knew what I wanted to pay, so stuck to my guns. It's definitely not for everyone.

I can tell Jim is more like my brother, he would go nuts with the way I did it.

 

[JIMinNC]

I didn't say I did wait 2 years, only took a few offers to pass. I am cheap on such things. The paperwork was really zero since all the agent had to do was change the seller name. Really I didn't spend 5 minutes on many offers. Was just patient in this case as I knew what I wanted and I knew what I wanted to pay, so stuck to my guns. It's definitely not for everyone.

I can tell Jim is more like my brother, he would go nuts with the way I did it.

I don't know your brother, but you're probably right. I'd go nuts.

I've never been one to spend much time trying to get a slightly better deal. Since we only live a few miles from the NC/SC state line, a lot of my friends and neighbors will drive across the line into SC to get cheaper gas (since SC has lower gas taxes) whereas I'll only do that if I'm going that way. Otherwise I just pay the higher NC price (about 20 cents/gallon, I think) and save time/miles. I also hate haggling, negotiating price, and that's another reason to just get it done..

 

[Steve Fatula]

I don't know your brother, but you're probably right. I'd go nuts.

I've never been one to spend much time trying to get a slightly better deal. Since we only live a few miles from the NC/SC state line, a lot of my friends and neighbors will drive across the line into SC to get cheaper gas (since SC has lower gas taxes) whereas I'll only do that if I'm going that way. Otherwise I just pay the higher NC price (about 20 cents/gallon, I think) and save time/miles. I also hate haggling, negotiating price, and that's another reason to just get it done..

Fortunately, DW and I are the same on this. Otherwise, I'd have driven her away long ago!

 

[Dean]

I have been looking at the ROFR database and am discouraged. It looks like I have a small chance of passing ROFR on the traditionally low-priced traders. It is so strange to see the occasional sale that slips through for $5 or $1 yet they exercise ROFR on the same unit type listed for 2k. It makes no sense!

I was hoping for a 2BD lockout every year platinum. I can't see a clear pattern to pricing (such as a calculation of DC point values to my offer price), or an EOY unit being any easier to pass ROFR than an annual, it is all over the place. I'm also not going to offer twice as much just to see if I can overpay my way into Marriott.

As a buyer, do you think there is any down-side to making an offer and seeing how it plays out? Will I lose money trying (i.e. are there any hard costs that the realtor listing the sale would pass on to me even if I don't pass ROFR)?

For the seller, they get their money either way, so they're not going to care if I buy I or Marriott does. I don't want to bang my head against a wall trying to get the Marriott preference window in II.

Thanks.

They don't want it to make sense, they want the uncertainty, not the actual price, to drive you to retail. That said, the ROFR.net is a small % of the transactions. As for style, I'm in between Steven and Jim, I don't want to beat my head against the wall but if I know what I want, what I want to pay and have a broker(s) willing to work on that options; I'm OK waiting it out. But I don't want to spend hours trying to save $200 either.

IMO a good trader is one that is relatively cheap, has good to decent dues, has lockoff capabilities and is a week or season with good trade power. the traditional low cost traders in my book at Platinum at GV, HL, WR, & GC plus Gold or comparable desert resorts. But I think there are other possibilities like some resorts without lockoff's that fit the rest of the criteria (like Doral/Legend's Edge), Platinum desert, ? NJ, CH. And even further like HHI Gold or the lower rated resorts there or other Orlando options.

I think you can get one of my first group for under $1000 or less. Don't just look at price, look at the dues and the closing costs as well. I bought HL less than 2 years ago for under $1000 with no closing costs and I got the week for free that year. But I do think prices have edged up slightly overall since then but there are still examples of great buys.

 

[Steve Fatula]

[QUOTE="Dean, post: 2321657, member: 1361"I'm OK waiting it out. But I don't want to spend hours trying to save $200 either.
[/QUOTE]

Well, the purchase I was speaking of was 3500 points. Even 50 cents ea is $1775.

 

[marmite]

IMO a good trader is one that is relatively cheap, has good to decent dues, has lockoff capabilities and is a week or season with good trade power. the traditional low cost traders in my book at Platinum at GV, HL, WR, & GC plus Gold or comparable desert resorts. But I think there are other possibilities like some resorts without lockoff's that fit the rest of the criteria (like Doral/Legend's Edge), Platinum desert, ? NJ, CH. And even further like HHI Gold or the lower rated resorts there or other Orlando options.

I think you can get one of my first group for under $1000 or less. Don't just look at price, look at the dues and the closing costs as well. I bought HL less than 2 years ago for under $1000 with no closing costs and I got the week for free that year. But I do think prices have edged up slightly overall since then but there are still examples of great buys.

I tend to focus in mainly on the MF's, but had payed more attention for listings of GV and GC as there is much more availability of Plat 2BR lockouts. I have also been keeping my eyes open for WR and HL though they are not as common.

Do you think gold season in the Desert (both CA & AZ states) is sufficient for most trades? I am having a hard time deciding when buying Gold is going to be enough to get the job done. With my Gold plus Vistana SDO trader, I am only depositing into II and have no control over the value they place on it. I do get great trades though (2BD in Hawaii with the smaller 1bed locked off is possible). With Marriott (if I am understanding correctly), I will be responsible for booking the most high value week I can find and then depositing, which could make it more important what season I am buying in for which regions.

As for the 2BD dedicated units, can these ever be good as traders? Given that II only charges $99 extra for a 2BD, isn't sticking to 1BD units or 2BD lockoffs a better strategy for keeping the costs down?

Thanks for your comments... I am compiling a list of other options!

 

[Steve Fatula]

I personally don't like dedicated non lockoff 2BR units as there is just DW and I, we only need a 1BR. By having a 2BR with no lockoff, we'd lose a week a year since we could only trade it into II once.

 

[pianodinosaur]

Don’t give up. I recently purchased a 2 bedroom platinum season at Marriott’s Legends Edge for $1.00. ROFR was passed. The seller Put in writing that he was gifting it to me for that amount.

 

[tshd]

Whether you should bother is subjective. As you mentioned the ROFR is not predictable for the lower priced traders, so I think if you want one, you'll have to decide if you are willing to possibly have to make multiple offers to get one. Really not a significant time investment except for the waiting part. Making a higher offer is not going to guarantee that it is going to pass. Look at GC for example.

sierra_ski made three offers on the same type of unit. The one that finally passed was lower than his/her previous offer by nearly 50%. (S)he offered $750, $1750, and then $1000 on the same type of unit. The first two failed but the last one passed. I'm surmising that (s)he looked at the randomness of the ROFR and just offered close to the asking price for which that unit was listed. The logical conclusion would be that if it didn't pass at $750 or $1750 that his/her offer would need to be higher than $1750 to pass, but the ROFR is not logical for these units. (S)he could have offered $2k and had it pass purely because that week was destined to pass regardless of price. (S)he would have paid $1250 more than (s)he needed to buy the unit. That "overpayment" might be all right for some folks who want the unit now and wouldn't be bothered to see the unit pass for someone else a week later at $750. I'd personally rather wait it out, but to each his/her own. In all, it seems (s)he got a unit in less than 60 days and saved $750 for the effort. Thank you Marriott!!

At the end of May Annie lost a 2bd for a high bid of $3200, yet one passed for $899 less than 3 weeks later. Makes no sense! So if you do decide it's worth playing the Marriott ROFR crapshoot game, it seems to make sense to stick with an offer you think you can be happy with paying, rather than kicking yourself for overpaying just to get it to pass.

 

[kds4]

Don’t give up. I recently purchased a 2 bedroom platinum season at Marriott’s Legends Edge for $1.00. ROFR was passed. The seller Put in writing that he was gifting it to me for that amount.

The 'gifting' language is an interesting idea. We really like Legend's Edge and would definitely go back there again. I believe it is the smallest with only 2 buildings, but we found all of the amenities/activities we would expect from a far larger property.

 

[Dean]

I tend to focus in mainly on the MF's, but had payed more attention for listings of GV and GC as there is much more availability of Plat 2BR lockouts. I have also been keeping my eyes open for WR and HL though they are not as common.

Do you think gold season in the Desert (both CA & AZ states) is sufficient for most trades? I am having a hard time deciding when buying Gold is going to be enough to get the job done. With my Gold plus Vistana SDO trader, I am only depositing into II and have no control over the value they place on it. I do get great trades though (2BD in Hawaii with the smaller 1bed locked off is possible). With Marriott (if I am understanding correctly), I will be responsible for booking the most high value week I can find and then depositing, which could make it more important what season I am buying in for which regions.

As for the 2BD dedicated units, can these ever be good as traders? Given that II only charges $99 extra for a 2BD, isn't sticking to 1BD units or 2BD lockoffs a better strategy for keeping the costs down?

Thanks for your comments... I am compiling a list of other options!

Yes, I do think the desert locations Gold (or comparable) are on par from a trade power standpoint to the others I mentioned and frankly, except for some GV weeks, are probably better traders than the others mentioned. Just be careful with the dues for those, esp DSV I which does not have ROFR. I think the lockoff's are still better but with the lockoff fee and upgrade fees, the difference is not nearly as much as it used to be. If there's something you'll use part of the time that's in the gray area, that might be a good compromise.

 

[JIMinNC]

At the end of May Annie lost a 2bd for a high bid of $3200, yet one passed for $899 less than 3 weeks later. Makes no sense! So if you do decide it's worth playing the Marriott ROFR crapshoot game, it seems to make sense to stick with an offer you think you can be happy with paying, rather than kicking yourself for overpaying just to get it to pass.

For sure. If you'll end up kicking yourself for overpaying by $500 or $1000 more, then you've gotta try to get that cheapie through the ROFR gauntlet, even if it means a few tries. Just remember, even that $1000 is less than a year's worth of maintenance fees. The maintenance fee will be your biggest expense over a 15 or 20 year ownership, adding up to probably at least $20,000 to $30,000 over 20 years. BY comparison the $500 to $1000 is peanuts, so that's why I don't sweat it.

 

[JIMinNC]

Whether you should bother is subjective. As you mentioned the ROFR is not predictable for the lower priced traders, so I think if you want one, you'll have to decide if you are willing to possibly have to make multiple offers to get one. Really not a significant time investment except for the waiting part. Making a higher offer is not going to guarantee that it is going to pass. Look at GC for example.

sierra_ski made three offers on the same type of unit. The one that finally passed was lower than his/her previous offer by nearly 50%. (S)he offered $750, $1750, and then $1000 on the same type of unit. The first two failed but the last one passed. I'm surmising that (s)he looked at the randomness of the ROFR and just offered close to the asking price for which that unit was listed. The logical conclusion would be that if it didn't pass at $750 or $1750 that his/her offer would need to be higher than $1750 to pass, but the ROFR is not logical for these units. (S)he could have offered $2k and had it pass purely because that week was destined to pass regardless of price. (S)he would have paid $1250 more than (s)he needed to buy the unit. That "overpayment" might be all right for some folks who want the unit now and wouldn't be bothered to see the unit pass for someone else a week later at $750. I'd personally rather wait it out, but to each his/her own. In all, it seems (s)he got a unit in less than 60 days and saved $750 for the effort. Thank you Marriott!!

At the end of May Annie lost a 2bd for a high bid of $3200, yet one passed for $899 less than 3 weeks later. Makes no sense! So if you do decide it's worth playing the Marriott ROFR crapshoot game, it seems to make sense to stick with an offer you think you can be happy with paying, rather than kicking yourself for overpaying just to get it to pass.

When I look at the ROFR data for Grand Chateau, I see a different pattern. Using an Annual 2BR Standard as the example, over the last two years I see many, many failures from $1000 all the way up to $3200. I see only a couple of passes for the same thing, and they were at $1000 or below. While that shows some unpredictability for sure, I would say, based on the many failures, the odds are you'll fail with an offer of below $3000 or so. I would wonder if the cheap passes actually passed because they were upfront-fee sellers on eBay who bundle the upfront fee paid by the seller into the ROFR submittal, thus the price shown is not representative of what Marriott passed on. If I were looking at this data, and I wanted a 2BR Annual Standard at Grand Chateau, I would expect to pay over $3000 to get it to pass.

 

[ski_sierra]

sierra_ski made three offers on the same type of unit. The one that finally passed was lower than his/her previous offer by nearly 50%. (S)he offered $750, $1750, and then $1000 on the same type of unit. The first two failed but the last one passed. I'm surmising that (s)he looked at the randomness of the ROFR and just offered close to the asking price for which that unit was listed. The logical conclusion would be that if it didn't pass at $750 or $1750 that his/her offer would need to be higher than $1750 to pass, but the ROFR is not logical for these units. (S)he could have offered $2k and had it pass purely because that week was destined to pass regardless of price. (S)he would have paid $1250 more than (s)he needed to buy the unit. That "overpayment" might be all right for some folks who want the unit now and wouldn't be bothered to see the unit pass for someone else a week later at $750. I'd personally rather wait it out, but to each his/her own. In all, it seems (s)he got a unit in less than 60 days and saved $750 for the effort. Thank you Marriott!!

Looks like you read my mind! I kept making offers based on the advice of many people here. The total cost of trading a 2 BR LO is over $2000 per usage year. So saving 1000 on purchase cost wasn't really important to me. If I had lost the third week @ 1000, I was prepared to offer $2500 for the next one.

I was also willing to pay more as I wanted to start a search soon.
I'm glad I got my week sooner than later. I traded the studio for a 3 BR at Marriott Marbella for Easter holiday week. I'd have probably missed that if I had not received my trader in time.

The 3 brokers I made offers with were awesome (JJ Timeshare, Breanne @ Express closing, & Bill Gabrieli). The week that passed was from Breanne. I dealt with SMTN & Redweek full service as well but found their tactics shady.

 

[ski_sierra]

When I look at the ROFR data for Grand Chateau, I see a different pattern. Using an Annual 2BR Standard as the example, over the last two years I see many, many failures from $1000 all the way up to $3200. I see only a couple of passes for the same thing, and they were at $1000 or below. While that shows some unpredictability for sure, I would say, based on the many failures, the odds are you'll fail with an offer of below $3000 or so. I would wonder if the cheap passes actually passed because they were upfront-fee sellers on eBay who bundle the upfront fee paid by the seller into the ROFR submittal, thus the price shown is not representative of what Marriott passed on. If I were looking at this data, and I wanted a 2BR Annual Standard at Grand Chateau, I would expect to pay over $3000 to get it to pass.

I have another conspiracy theory. Marriott wants people to keep making low offers so they can keep buying it back for cheap. Let an occasional one pass at a low price so that people believe they can get a week at low price. These people will keep submitting offers at low prices and help Marriott in acquiring majority of the weeks at low cost. MVC can put this week back into the trust and make lots of money.

Of course, this is pure speculation and just for fun.