Puzzled by giveaways/ROFR

[Todd Moffitt]

I'm curious about timeshare giveaways. Don't these properties just get scooped back up by the developer when there is a ROFR? If you're at the point where you need to giveaway the property, why go through the whole process only to waste everyone's time when the property will go back to the developer anyway? Won't (in this case, Hilton) just take back the property? Has anyone ever been able to get a property from someone for "free" without the developer exercising their ROFR? Recently won a bid for an HGVC property on Ebay for $35 and sure enough, it was taken back. What's the secret here? Or is there one?

 

[tombanjo]

A few things -

1) There is a "ROFR Budget" - the conventional wisdom is at the end of the year they are out of money, where the beginning of the year they have lots of money for buy backs
2) They are probably very happy someone takes over a timeshare and they don't get stuck with having to pays the MF on less desirable units which they would have a hard time selling.
3) There are costs to buy the unit and then to sell the unit and pay the sales persons commission, as well as the cost of money to hold it until sold. It may be not worth it to take it back as they might not make enough money even at a low price.

Look at rofr.net for results, you will see a parc soliel sold for 8 cents.

 

[Nomad420]

A few things -

1) There is a "ROFR Budget" - the conventional wisdom is at the end of the year they are out of money, where the beginning of the year they have lots of money for buy backs
2) They are probably very happy someone takes over a timeshare and they don't get stuck with having to pays the MF on less desirable units which they would have a hard time selling.
3) There are costs to buy the unit and then to sell the unit and pay the sales persons commission, as well as the cost of money to hold it until sold. It may be not worth it to take it back as they might not make enough money even at a low price.

Look at rofr.net for results, you will see a parc soliel sold for 8 cents.

I know in some states the developer does not get stuck with the MFs on "abandoned" units. The can roll those over to the existing owners. I just went through that a few years back with my unit in Utah. I would say that you could pick up units when that was happening basically for back taxes after the original owner defaulted and the developer was just standing back and watching.

 

[dayooper]

I'm curious about timeshare giveaways. Don't these properties just get scooped back up by the developer when there is a ROFR? If you're at the point where you need to giveaway the property, why go through the whole process only to waste everyone's time when the property will go back to the developer anyway? Won't (in this case, Hilton) just take back the property? Has anyone ever been able to get a property from someone for "free" without the developer exercising their ROFR? Recently won a bid for an HGVC property on Ebay for $35 and sure enough, it was taken back. What's the secret here? Or is there one?

The eBay resellers have a way of pricing the unit that includes all money paid. The closing costs, buyers fees, sellers fees, MF’s and the like are all included into the price they submit to HGVC. It makes it look much higher than the actual cost.

 

[Panina]

I'm curious about timeshare giveaways. Don't these properties just get scooped back up by the developer when there is a ROFR? If you're at the point where you need to giveaway the property, why go through the whole process only to waste everyone's time when the property will go back to the developer anyway? Won't (in this case, Hilton) just take back the property? Has anyone ever been able to get a property from someone for "free" without the developer exercising their ROFR? Recently won a bid for an HGVC property on Ebay for $35 and sure enough, it was taken back. What's the secret here? Or is there one?

They do not always get taken back.

To avoid ROFR you can get an affiliate, no ROFR.

 

[Nomad420]

They do not always get taken back.

To avoid ROFR you can get an affiliate, no ROFR.

While I don't claim to actually know the number I suspect the number of sales taken back by the developers ROFR is very low, my guess is well under 20% of sales....JMHO

 

[tombanjo]

per ROFR.net, it is about 20% fail, but total reported is 202 for 5 years. As terms of total sales, 40 sales a year must be a tiny percent of all their sales. When I looked up my District deed, it looked like they foreclosed on 20 or more for that resort in a single day. (Obviously a lump transaction). I did not look at how many new deeds, but a rather large amount. There has to be thousands of developer sales a year. So resale is a tiny piece and ROFR take backs is even tinier.

here is a simple view from ROFR data