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Right of First Refusal: What You Need to Know

Right of First Refusal

November 26, 2018 – by Primo Management Group

Right of First Refusal

So, you want to sell your timeshare? Find out how the Right of First Refusal can affect the sale.

If you’re like so many timeshare owners across the country, you may be looking to sell your unwanted timeshare. Maybe you’ve had it with rising maintenance fees or are no longer able to make use of the property. So, you decide to sell to recoup at least some money and get out of your timeshare trap. But before you do anything, it’s a good idea to find out about the Right of First Refusal.

What Is the Right of First Refusal?

The Right of First Refusal (ROFR) is a clause in your timeshare contract that gives the resort the right to buy or decide not to buy your timeshare before anyone else can. So, let’s say you want to sell your timeshare. By some miracle, you find a buyer. However, before the sale can go through, you must give your resort the option to buy your timeshare at the same price. If they accept, the sale will proceed as it would have with your first buyer, only now the resort will be the buyer. If they refuse, then the sale goes through as it would have with the original buyer.

Why Is ROFR Even a Thing?

ROFR exists primarily to protect the interests of the resort. As you probably know, the resale market is flooded with timeshares at rock bottom prices. Want a $1 timeshare on eBay? No problem. If a consumer can buy a timeshare for $1, why would they ever want to buy a timeshare from the developer at full price? So, by exercising their ROFR, the resort can recoup the timeshare and sell it to someone else at the standard price. This protects their ability to make sales at the prices they set. It also gives them a way to get cheap inventory without building a whole new resort. If they buy your timeshare for $1,000 and resell (re-resell?) it at $15,000, that’s a pretty good day for them.

Do Resorts Always Exercise ROFR?

Not all resorts will exercise their rights. As with all things in the timeshare industry, there is substantial variation from contract to contract and location to location. Some companies do actively exercise their ROFR. Others don’t. During the recession, ROFR was rarely used. However, as the economy has recovered, so has the resorts’ ability to repurchase units. But a lot depends on if you have a highly-valued property or a highly sought-after week. The more “valuable” the resort perceives your timeshare to be, the more likely they are to exercise ROFR.

How Does This Affect You as a Seller?

ROFR affects sellers in two primary ways. First, it can slow down the sales process. Even if you do eventually sell the timeshare for the agreed-upon amount, the resort typically has a time window within which they can decide to exercise their rights. For example, Disney Vacation Club has up to 30 days. So, if that window is lengthy, you’ll have to continue to pay your fees and worry about getting out of your contract. Secondly, a savvy or wary buyer may be turned off by the specter of the ROFR. Maybe they’ve had deals fall through in the past and don’t want to risk another disappointment. Or maybe they, too, don’t want the delays the ROFR process can bring.

Right of First Refusal can complicate the timeshare resale process. If you are having difficulty with this or any other aspect of the sales process and need to get rid of your timeshare, we can help. Our consultation is free, so contact us today.

(Image Source: Pixabay)

 

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Frequently Asked Questions ?

How does PMG get me out of my timeshare contract?

PMG is not a resale, transfer, or donation company. We are consumer advocates—we help to negotiate the release of your timeshare contract obligation. We do not buy, sell, or rent your timeshare. Simply put, we help you to get out of your timeshare contract forever.

How long does the process usually take?

Usually less than 12 months, but it all depends on your situation. If your timeshare is free and clear with no mortgage, then the process may only take 3-9 months.

Speak to your advisor about the time, and what delays the resorts have put into place to prevent timeshare owners from departing their ownership. If you have a mortgage or past due maintenance fee, the process takes more time.

How much is my timeshare worth?

This is probably going to hurt, but whether you paid $5,000 or $50,000 for your timeshare, the IRS values all timeshares as worthless investments. In addition, that timeshare would have negative value due to the annual maintenance fee bill which compounds year after year. That is until PMG helps you cancel your timeshare.

Can I use your service if I still have a balance owed on my mortgage?

Yes. Whether you bought your timeshare 20 days ago or 20 years ago, PMG has a solution for you and is here to help.

Will my name be off the timeshare?

Yes! Permanently! GUARANTEED!

In addition to getting me out of my timeshare, can you recover the money I’ve already spent on mortgage payments and maintenance fees?

While we are able to recover money in rare cases, beware of any timeshare cancellation company that entices you with the promise of fund recovery. The truth is, timeshares are loath to give back the money they’ve already taken.

Are your consumer advocates really “consumer advocates”, or is that just a fancy word for salesperson?

Because most of our clients have had their trust betrayed by timeshare salespeople, we understand how some consumers can become a bit jaded. When you call us for a consultation, that’s exactly what you get, a consultation. At PMG, our job is not to sell you; our job is to help you get out of your timeshare. Which is why we have numerous 5-star reviews and an “A” (excellent) rating from the BCA.

Why should I choose PMG to get me out of my timeshare?

We pride ourselves on providing our customers with the best customer service in the industry. When you contact our company, you speak to a live person, not an automated system or voicemail. We go above and beyond for our customers by helping you to protect your credit and even repair your credit if needed. We offer a 100% money back guarantee, and we can provide documented proof of our success in helping customers just like you.

What happens after I sign up with you? Will I be apprised of your progress?

At PMG, we pride ourselves on our hands-on, boutique-style customer service, so every new client is assigned a case manager whose job is to keep you in the loop throughout the entire cancellation process. Your case manager is always just a phone call away.

How much is your fee?

Not all timeshare experiences are created equal. Some are more complicated than others, and every situation is different. That’s why our trained timeshare elimination consultants will ask you a series of questions designed to determine exactly what needs to be done to terminate your timeshare, how long it will take, and how they can best advocate for you. We will always seek the most cost-effective route for you.

What if I still have more questions?

Canceling a timeshare contract is not a cookie cutter process. With each situation being unique, once you complete the form below an experienced consumer advocate will call you today to discuss your options.