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ROFR is still alive..

ada903

ada903

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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.
 
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!!!" :D ;) Were you buyer or seller this time? I hope Marriott pays up faster than Starwood does on ROFR's.
 
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? :confused:
 
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.
 
Yes, I got ROFR-Ed by Starwood and I sold them my Westin Ka'anapali week. I am a seller once again :)
 
EKniager said:
The rumors of the death (of timeshares) have been greatly exaggerated!:hysterical:
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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.
 
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.
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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! :)
 
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.
 
Lardan said:
People going on vacation is something that will never go out of style.
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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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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.
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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.
 
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! :)
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I agree, my family only goes to Hawaii every other year.:)
 
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.
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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.
 
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.
 
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.
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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.
 
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?
 
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.
 
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.
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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.
 
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.
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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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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.
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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.
 
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.
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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?
 
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.
 
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
 
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?
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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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