Hilton Grand Vacations is one of the most respected hospitality companies in the world, and they offer some of the most versatile vacation ownerships that are available on the resale market. It’s no wonder why so many choose to buy their Hilton Grand Vacations ClubPoints on the secondary market, but you may have hear about Hilton’s Right Of First Refusal (ROFR) policy that adds an additional to selling or buying HGV timeshares. In this article, we will explain what Hilton’s ROFR policy is and how it works. We will also provide some tips for you to employ whether you are considering selling or buying a Hilton timeshare resale.
What Is Hilton Right Of First Refusal?
It’s important to note that most Hilton Grand Vacations (HGV) timeshares are subject to the right of first refusal (ROFR) program that is built into Hilton’s contracts. Right of first refusal (ROFR) is a contractual right that gives timeshare developers the option to purchase a timeshare interest directly from the existing owner before the owner can enter into a transaction with a third-party buyer on the resale market.
Timeline Of Right Of First Refusal
Once an offer to purchase an HGV property is accepted by a seller, the purchase contract must be sent to Hilton for review. Hilton then processes the contract and decides whether or not to perform a direct buy back on the property from the current owner for the price that the resale buyer has offered, according to specified contract terms. If Hilton chooses to excise their right and buy the timeshare directly from the existing owner (seller), this will inhibit the resale buyer from transferring the vacation ownership. This part of the closing process generally takes 4 to 6 weeks.
Why Does Hilton Buy Their Timeshares Back From Sellers?
Hilton will generally exercise its right of first refusal when the amount that the owner is selling for is lower than a pre-determined threshold. This practice is common for high-end timeshare ownerships, and is done to preserve the resale value of the timeshare. The exact price that will trigger Hilton to exercise its right of first refusal is not publicly available online, it differs for various HGVC resorts, and it changes through time.
HGV Resorts That Are Not Subject To ROFR
There are a few Hilton Grand Vacations resorts that are not subject to Hilton’s right of first refusal program. These include:
Right Of First Refusal For HGV Resale Buyers
We’ve compiled some of the most requested information our clients ask about, or need to know when buying a Hilton Grand Vacations timeshare on the resale market below.
Navigating Hilton’s Right Of First Refusal Program
We always recommend owners consult with a licensed Real Estate agent. The benefits of taking a free consultation with a broker that deals with Hilton resale each day can’t be overstated when it comes to navigating Hilton’s right of first refusal program. It’s important to know what prices Hilton is buying each specific timeshare back for, and only a broker with day-to-day knowledge of the Hilton timeshare resale market can accurately gauge if an offered price will likely pass through right of first refusal.
Do I Get My Money (Deposit) Back If Hilton Excises Their Right To Buy The Property?
Any money that buyers put down as a deposit will be returned to them if Hilton chooses to exercise their Right of First Refusal. If the potential buyer went through a broker, then that money will be held with the closing company during this process. If Hilton does decide to exercise Right of First Refusal, the closing company will be notified and will then return the money back to the buyer by check.
Can I Try To Buy Again?
If Hilton exercised its Right of First Refusal, buyers are always welcome to try to purchase again. If you’re searching for Hilton resale, the best approach to go would be to work with a broker on your next transaction. A real estate broker will also act as a consultant for buyer, advising them about present market conditions to help prevent Hilton from exercising their right to buy on their next resale purchase.
Does That Mean My Price Was Too Low?
Normally, when Hilton exercises its Right of First Refusal, it is because the price was too low. This is not always the case, however. There are times when the developer may need to repurchase properties from owners for inventory reasons, although this is not as frequent as a property’s price being too low.
Right Of First Refusal For HGV Resale Sellers
If you’re looking into selling your HGV timeshare, here are some of the commonly asked questions you need to know when selling on the resale market.
Do I Need To Have An Accepted Offer Before Knowing If Hilton Will Buy My Property Back?
Yes, sellers are required to have a signed purchase agreement that is sent to Hilton. Once you have a signed contract to sell, Hilton will then determine if they will be exercising their right of first refusal.
If Hilton Excises Their Right To Buy The Property, Does It Affect The Sale Price?
Hilton can not change the price or other terms of the contract when exercising their right of first refusal. As a seller, you will not receive any less money, and no terms of the sale’s contract are changed. You are essentially unaffected by the process, even if Hilton buys your property back.
How Does ROFR Affect My Property’s Resale Value?
Part of the reason that Hilton has continually been such a popular choice for buyers on the resale market is that Hilton is protecting the value of their owner’s properties with ROFR. Other vacation clubs that don’t have a buy-back program like this suffer greatly in terms of resale value, but HGV timeshares have been able to maintain their value much better than most on the resale market for many years.
Conclusion
Although Hilton’s right of first refusal does add additional steps and time to buying and selling a Hilton timeshare on the resale market, there’s no need to be intimidated! With a little education and guidance you can successfully navigate the process and steer clear of any significant problems.
If you’re looking into buying a Hilton timeshare resale, feel free to browse our current HGV resale listings, or contact us for a free consultation.
If you’re looking into selling your HGV property, please fill in a seller’s form to start the process. We have licensed agents who specialize in Hilton resales that can walk you through the process!
