Another Marriott ROFR waived

[thinze3]

Steve, after closing Marriott will untimately be the one who "pays" the person who had their week on the waiting list.

It was simple a point that Marriott will not be allowing anyone from their waiting list to collect $12K for a platinum week at BeachPlace or a red week at DSVII anytime soon. They could have had both of those weeks for a total of $10K had they simply used ROFR on ME. This is verses having to pay two people (or allowing two people to collect if you wish) a total of $24K.

Simply put, Marriott would get the $14K difference.

 

[Steve]

It was simple a point that Marriott will not be allowing anyone from their waiting list to collect $12K for a platinum week at BeachPlace or a red week at DSVII anytime soon. They could have had both of those weeks for a total of $10K had they simply used ROFR on ME. This is verses having to pay two people (or allowing two people to collect if you wish) a total of $24K.

Simply put, Marriott would get the $14K difference.

I don't quite follow you here. You are saying that "Marriott will not be allowing anyone from their waiting list to collect $12K for a platinum week...anytime soon." I think that's a completely false statement.

Marriott will gladly sell a week on behalf of the owners who are on the waiting list. It's happening all the time. Marriott is content to act as the real estate agent and make the 40% commission on these sales.

What Marriott isn't willing to do is exercise ROFR and purchase these weeks and resell them...despite the fact that Marriott would make a bigger profit if they did.

You seem to think that this is illogical and so it can't possibly be happening, but this is indeed happening all the time. Marriott is not blocking any sales from the waiting list. Sales are taking place...albeit at a slower pace than previously...but they are happening.

As just one example, Marriott recently sold my Manor Club week for me. I got over $13,000 after they took their 40% commission. At this same time, Marriott was passing up the opportunity to purchase Manor Club weeks through ROFR for thousands less. (Dioxide's ROFR database has the statistics to prove it.) Marriott could have made a lot more money if they had simply used ROFR to buy those weeks and then resell them, but they chose not to. Instead, they made a smaller profit by acting as a real estate agent and selling my week for me.

Steve

 

[TSResalez]

This is the best I know of... http://dioxide45.tripod.com/rofr.html

Thanks for the info. This helps for sales on the resale market, but what about offers made to owners directly from the developer??

 

[TSResalez]

Marriott doesn't buy back weeks from owners and doesn't buy weeks from the waiting list. When the company accepts a resale listing from a current owner, Marriott simply acts as a broker. When the week sells, they charge the seller a 40% commission. Marriott does NOT purchase the week, does not have to carry the week on its books, and has no risk.

In contrast, if Marriott exercises ROFR, then Marriott does indeed have to actually buy the week from the seller. Marriott can, in turn, sell the week to a buyer for a handsome profit. However, Marriott has to first actually purchase the week and take responsibility for it and for the maintenance fees in the event that the week doesn't sell quickly.

In this current economy, using your example, Marriott does indeed seem to prefer making $18,000 acting as a broker rather than making $24,000 as an actual buyer and seller.

Steve

what about when they make a direct offer to purchase from the owner? they have made repurchase offers in the past? these values change from season to season so I was looking for somewhere to view what the "latest" offer was so that I could sell my unit for example.

 

[Steve]

what about when they make a direct offer to purchase from the owner? they have made repurchase offers in the past? these values change from season to season so I was looking for somewhere to view what the "latest" offer was so that I could sell my unit for example.

Those offers were always quite rare. I believe that they have now ceased completely.

On the other hand, if you want to see if Marriott will act as a real estate agent to sell your week for you, simply call them and ask:

1) Is Marriott currently accepting listings for your resort and season?
2) What price is Marriott charging buyers of weeks like yours?
3) What will you net if it sells? (this will be 60% of the answer to #2)
4) Is there a waiting list, and if so, what number will you be on the list?

Please note that Marriott will only accept listings at the price they have set. You can't get them to sell it for less. Also, note that Marriott will NOT repurchase your week from you. They will only act as a real estate agent to find you a buyer.

Steve

 

[taffy19]

On a $30K unit, I say Marriott would simply buy a unit for $6K using its ROFR process vs. paying someone on the waiting list $12K.

I assume that Marriott would rather make $24K vs. $18K.

I believe that Marriott would accommodate some of the owners by selling their week and charge a hefty commission because that's what they may have been told when they bought. There would be so many gripes if they didn't keep that promise once they are on that waiting list already and that would hurt them more in the end than making less profit on a single sale. A 40% commission is not bad after-all. JMHO.

Are they no longer taking in trades if a buyer wants to upgrade to a newer resort, if they have a buyer waiting today for their current resort? I wonder if we have seen the worst now or if prices will even go lower yet? If you hang on long enough, prices will go up again and you guys will be very happy with the great deals you made.

PS. Sorry Steve, I didn't see your post. You are much more accurate in your message than I was.

 

[m61376]

The bottom line is, whether it seems to make financial sense from a $$ standpoint, is Marriott seems very reluctant to have to outlay any money despite the potential for profit making. They would rather act as a broker, get their 40%, and not have to borrow any money. I think the tightening credit market has had a huge impact, especially since timeshares are probably one of the least secured entities.

 

[tlwmkw]

Marriott is not stupid- they are being shrewd here

Marriott doesn't want to hold inventory- if they buy if from you to re-sell then they tie up capital and have to cover the MF's until they re-sell it. Who knows how long that will be? Especially if they don't want to discount their prices (which they don't). If they simply take a name and put it on a list then you hold the inventory and pay the MF's until it sells. Marriott gets 40%of the higher price if they sell it for you. Most buyers in the sales office don't know if they are buying from Marriott or from the original owner (and probably don't care). If Marriott could turn these weeks around quickly it would make sense to buy them in, but since they aren't discounting they know that they won't sell quickly so they prefer the 40% without the risk.

 

[TSResalez]

Marriott doesn't want to hold inventory- if they buy if from you to re-sell then they tie up capital and have to cover the MF's until they re-sell it. Who knows how long that will be? Especially if they don't want to discount their prices (which they don't). If they simply take a name and put it on a list then you hold the inventory and pay the MF's until it sells. Marriott gets 40%of the higher price if they sell it for you. Most buyers in the sales office don't know if they are buying from Marriott or from the original owner (and probably don't care). If Marriott could turn these weeks around quickly it would make sense to buy them in, but since they aren't discounting they know that they won't sell quickly so they prefer the 40% without the risk.

I called the resale office, they said the waiting list would have me selling longer than a year from today...also I'm not even available to get on the list but a "registration" as they put it. The resale rep also says they actually are losing money when taking a 40% commission!? absurd .

 

[TheTimeTraveler]

They would only be losing money with a 40% commission if their marketing costs exceeded the 40% fee; otherwise it is pure profit.

Trust me, it's a profitable venture for them otherwise they wouldn't be doing it.

 

[TEDK63]

Just got back from my annual sales pitch here in St Thomas. We discussed "upgrading" and buying/trading to a platnum plus here and they offered me just about 60% of what they said was the "value" of the property. I would be happy to upgrade ( a prospect where they can make money on both ends if they would just give me a reasonable value on my current Aruba surf club property let say 75 -80 %



The rep also indicated that we could sell in on our own for about 30k...

Any buyers.... anybody? Bueller...lol