home News forums Reviews Trade links

Go Back   The DVC Boards at MouseOwners.com - the place to talk DVC and Walt Disney World > VACATION CLUB RESOURCES > Questions about Buying and Selling DVC
 Register FAQ Calendar Search Today's Posts Mark Forums Read

 Notices

Reply
 
Thread Tools Display Modes

Old 11-21-2009, 09:40 AM   #1
DVC Information
*****
 
Join Date: Jan 2007
Posts: 3,912
Arrow Buy Direct from DVC or Buy Resale?

BUY DIRECT, OR BUY RESALE?

Most people who first hear about DVC hear directly from Disney, and may not even be aware that there is an active resale market where DVC contracts may be purchased - just like you can purchase a new or used home.

With a few exceptions, once the resale purchase is complete, new members receive the same benefits— including ID cards, website access, discounts, customer service, and travel assistance—provided with purchases directly from Disney.

However, there are a few restrictions on the usage of points purchased via the resale market.

DVC announced a policy that limits access to certain Member Getaways exchanges for Ownership Interests purchased on the secondary market (also known as the resale market). Under the policy, Members who purchase from anyone other than Disney Vacation Development, Inc., on or after March 21, 2011, will not be eligible to use those Vacation Points to make reservations for the following two collections:
  • "Disney Collection" - Disney Resort Hotels, Disney Cruise Line, Adventures by Disney
  • "Concierge Collection" - a prestigious portfolio of resorts and hotels

Points purchased via the resale market will instead be valid only for reservations at:
That said, Members who purchased on the secondary market prior to March 21, 2011, may use those Vacation Points for all Member Getaways.

Bear in mind, however, that you get the most "bang for the buck" using your points to stay at DVC resorts, so many view these options that were removed from resale purchasers as a poor use of DVC points and therefore no great loss. Also bear in mind that these programs are not guaranteed to be around and may be discontinued by DVC in the future.


INITIAL PURCHASE DIRECT FROM DVC
  • You can get the exact number of points that you want (although you must typically buy a minimum of 100-160)
  • Faster and more convenient than resale (you will be in the system and have your points and be able to make reservations much faster than resale, sometimes within a day)
  • No worries about the purchase if Disney executes ROFR**, since that only applies to resale purchases
  • More expensive cost per point than the resale market, although be sure to take into consideration any incentives that DVC is offering. DVC doesn't negotiate the price. Some brand new resorts may not be available on the resale market.
  • You can easily finance through DVC, and Disney doesn’t report the loan to credit reporting agencies; also, the interest on the loan will be tax-deductible (in most cases) since it’s a mortgage. Be aware that timeshare loans tend to have higher interest rates and shorter terms than typical mortgages.
  • You can pay with a Rewards credit card and get points/cash back
  • The full set of points you buy will be available immediately, versus some resale contracts which may be “stripped” of points.
  • If you don’t want the resorts they are actively selling, you may have to do some firm talking to a guide to convince them you really want an older resort.
  • You get access to vacation options from Disney Cruise Line, Disney Destinations around the world and Adventures by Disney that are not available when you buy resale.
  • You will get assistance from a Disney Vacation Club Guide, who will lead you through the sales process, and answer any questions you may have about Membership.

Bottom line: If you are willing to pay more, buying direct is easier, less stressful, faster, and requires less patience than buying resale.


INITIAL PURCHASE VIA RESALE
  • You may not get the exact number of points you want. If a resale listing is for 400 points, you can't just buy 250 of them (like you can direct). The number of points and Use Year are fixed, and resale contracts cannot be altered or subdivided.
  • You can purchase less than 160 points for your initial buy-in to DVC (Disney typically won’t let you buy less than 100-160 points).
  • It will take much longer to get into the DVC system and have your points (resales typically take 8 weeks), and you can't make a reservation until then. Some sellers may cause unforeseen delays if they are slow in returning paperwork or responding to messages, resulting in an even longer wait period to get your points. If you're a patient type of person, this may not matter.
  • Disney may exercise ROFR** and you may lose the resale and have to start all over. This can cause great anxiety to some people while they wait to hear if their offer will pass ROFR or not.
  • Resale is typically much less expensive then buying from DVC, and you can negotiate the price with the seller. Most terms of a resale purchase are negotiable including the purchase price, the party paying any outstanding annual dues and the party responsible for closing costs and fees. Buyers who are willing to live with the minor drawbacks of a resale purchase can save thousands of dollars over the cost of a similar purchase direct from DVC.
  • You can’t finance through DVC, although most resale brokers will recommend a finance company; also, the interest on the loan will not be tax deductible
  • A resale contract may be “stripped” of points where the user has used many of the current year’s points, and may have borrowed some or all of next year’s points. Just be aware of “stripped” contracts on the resale market.
  • Easier to pickup large point packages at any of the older DVC resorts.
  • Even if you purchase resale, you can still add-on points direct from DVC, if you wish

Bottom line: If you are willing to be patient and wait for the right contract to come along, like negotiating a deal, can deal with the anxiety of waiting to hear you pass ROFR, and then wait until you're finally in the system, buying resale will save you a lot of money than buying direct.

Note: You may hear of "stripped" or "loaded" contracts for sale on the resale market. Broadly, the following terminology is used:
  • Fully loaded: All prior UY points banked, all current UY points available, none borrowed from next UY
  • Loaded: All current UY points available, none borrowed from next UY
  • Stripped: No current UY points available, some points coming from next UY
  • Fully Stripped: No current UY points available, and no points coming in the next UY
Obviously, a loaded contract is more desirable to most people than a stripped contract.

RESALE FEES

The seller pays the commission to the broker, which is typically 10% of the sales price, as well as an Estoppel fee (~$50) and ROFR fee (~$20).

The buyer typically pays the closing costs. Closing costs generally include everything involved to legally transfer the property from the seller to the buyer, including items such as recording the new deed and the title insurance policy. A title search is conducted by the title company to be sure that the title is free and clear, and a title insurance policy is issued to insure the same.

As to who pays annual dues, it is completely negotiable. Most resale brokers will say the buyer is responsible for paying the annual dues on any points they get. Most buyers shouldn’t pay annual dues on banked points from a prior year.

BEWARE OF ROFR

When buying resale, one of the potential pitfalls to try to avoid is making an offer that will cause Disney to exercise its Right of First Refusal (ROFR).

If you find a contract you like and you and the seller agree on a purchase price, the agreement to sell the points is submitted to DVC for review. If the price is too low, Disney will step in and exercise their ROFR, which means DVC will purchase the property themselves at the terms agreed upon by the seller and the original buyer. DVC then becomes the buyer. The seller instead gets its money from Disney and the buyer loses the contract.

If DVC exercises ROFR, the original buyer can’t come back and make a higher offer. There is no second chance; the resale contract is lost to Disney. There is no financial hardship on the potential buyer — they will receive a refund on any down-payment that may have been part of the deal. But the buyer will have to go back to square-one and try to find another deal.

Disney has up to 30 days to review the contract and decide whether they will exercise ROFR, but it usually takes less time than that.

Disney doesn't disclose the criteria used to determine whether they will exercise ROFR on a DVC resale package, but the price per point is definitely a critical factor. A contract in which the sales price is below the average market value is particularly prone to being purchased by Disney via ROFR.

Falling victim to Disney's ROFR isn't the end of the world; it just sets you back about 30 days (the length of Disney's typical review process), and forces you to pursue a different listing. To avoid this kind of delay, make more competitive offers.


WHICH RESALE BROKER?

Similar to a realtor, the broker's role is to bring buyers and sellers together. All broker fees and commission are typically paid by the seller. I strongly recommend that you work with a broker who is thoroughly experienced in selling DVC contracts. There are several reputable companies out there that list DVC contracts, such as:
  • Resales DVC (The Tutas Family) (A sponsor of MouseOwners)


➤ MouseOwners.com officially recommends Resales DVC.


THE RESALE PROCESS
Once you have found a resale listing you like, you make an offer on it. Once the price is accepted by the seller, a contract is sent to you for your signature.

After both the buyer and seller sign and return the necessary documents, everything is sent to DVC for ROFR. Disney can take up to 30 days to review the contract and make a decision whether to exercise their Right of First Refusal. Disney generally makes their decision in less than 3 weeks.

Once Disney waives ROFR, the title company will do a title search on the property, order a title insurance policy and request an estoppel report from Disney. The estoppel report is what the title company uses to put together the final closing documents. When the closing documents are ready, the title company will send them to both buyer and seller. They need to be returned along with the final funds due from the buyer.

Once the closing is completed (it can take up to 8 weeks), the title company sends the purchase information to DVC and it then takes Disney 7 to 10 days to put you into their system as the owner of the contract.

It is at that point that you can call Member Services and make your first reservation.

Of course, with all the back and forth, there is ample opportunity for further delays. On the other hand, sometimes the process can take less time.

WHAT ABOUT OWNING MULTIPLE USE YEARS (UYs)?

When purchasing additional points via the resale market, you can easily purchase a contract with a different Use Year. If you’re buying an add-on direct from Disney, you will most likely be given no choice but to get the same Use Year you already have – unless you buy the minimum points that a first time purchaser is required to buy-in, in which case you can ask for a different use year.

If you buy the same use year (and the deeds have the exact same names on them), all your contracts can be setup to be treated as one for purpose of reserving, banking and borrowing. If you have separate use years, the two contracts remain separate for all purposes and when you reserve using both you reserve some nights using one contract and other nights using the other and link the two. Or, you can transfer points from one contract to another, but there are limitations.

Having multiple contracts with different Use Years can offer added flexibility in some cases, but certain limitations in other cases, and is just harder to manage. Having the same Use Year on all of your contracts is much easier to manage, as there is less to keep track of and less chance for mistakes.

The main advantage of multiple UY’s is if you go different times of the year you can potentially chose which account to use for a given trip giving a certain amount of protection from cancelation and banking issues. But having multiple contracts with different Use Years does create more accounting, is more complicated and difficult (but not impossible) to make a single reservation from both contracts.

So, some people ask why you should make life harder than it needs to be and recommend sticking with just one UY.

If you were adding on to the same resort, many people recommend you keep the same use year. If you are buying a new home resort, then a different use year isn't too hard to manage.



Last edited by DVC Information; 07-26-2015 at 03:54 AM.
DVC Information is offline   Reply With Quote
Old 11-21-2009, 10:04 AM   #2
salmoneous
Add-on Aficionado
 
salmoneous's Avatar
 
Join Date: Jul 2008
Location: Sabado Gigante
Posts: 15,124
Default

Nice lists. I would add www.resalesdvc.com to your list of reputable companies.
salmoneous is offline   Reply With Quote
Old 11-21-2009, 10:10 AM   #3
kelly4me
Studio
 
kelly4me's Avatar
 
Join Date: Feb 2009
Location: Northern Va
Posts: 171
Default

I *think* that you can select your own use year if you buy direct. You have to take what's available if you buy resale.
__________________
Kelly, DH, DS (6)

kelly4me is offline   Reply With Quote
Old 11-21-2009, 10:12 AM   #4
DVC Information
*****
 
Join Date: Jan 2007
Posts: 3,912
Default

Quote:
Originally Posted by kelly4me View Post
I *think* that you can select your own use year if you buy direct. You have to take what's available if you buy resale.
In most cases, you can select your UY when buying direct. When buying resale, you can do the same by just waiting until a contract with the UY you want comes on the market. More patience is required when buying resale.
DVC Information is offline   Reply With Quote
Old 11-21-2009, 10:17 AM   #5
jrbdad
Add-on Aficionado
 
jrbdad's Avatar
 
Join Date: Oct 2008
Location: North Texas
Posts: 8,997
Default

I was going to say the same thing Sal said. The "sticky" is very well done & I'm sure will be very helpful to folks considering DVC.
__________________
John
jrbdad is offline   Reply With Quote
Old 11-21-2009, 10:35 AM   #6
minniekissedme
Add-on Aficionado
 
minniekissedme's Avatar
 
Join Date: May 2008
Location: In my car with three kids.
Posts: 6,709
Default

Until you've been through it, I'm not sure that anyone can accurately describe the angst of waiting for ROFR. Many buyers get involved in MouseOwners and other sites throughout the decision making and buying process. You make friends, you talk about your contract, how excited you are, how excited others are for you, and now you must play the waiting game.

Anyone that has purchased via resale knows what this is...heck, a "Waiting For ROFR Support Group" was formed and continues to thrive here. In my opinion this angst is the difference in purchasing via resale. The wait...

Purchasing resale most definitely has its rewards if you like to gamble. Some people have paid a difference of nearly $10 per point for similar contracts. Some people don't mind waiting out the ROFR and continue to offer low in the hopes of seller and Disney taking less for more.

IMO there is no better value right now than Saratoga resale. It can be had for $40 or more less than current BLT offers. They was not necessarily the case a year ago and may not be the case a year from now. It's an ever changing market and always fun and wise to keep up with.

Buying direct does have its advantages too as well noted by Mike. Every purchase is different and everyone does have options. MouseOwners continues to be a valuable resource for all things DVC.
__________________
Are you MOD? aka MouseOwnersDad?? Click here to join!

MKM Maulers 2012-13 Champion of the MODly Men of the World Fantasy Football League
minniekissedme is offline   Reply With Quote
Old 02-26-2011, 09:31 PM   #7
PAJD
Grand Villa
 
PAJD's Avatar
 
Join Date: Nov 2010
Location: Phoenixville, PA
Posts: 3,468
Default

Let me just say how important this thread, and then many, many threads after this were to me. 5 months ago, I knew ZERO about buying DVC. Then, by dumb luck, I found this place, and thank goodness I did.

I had been talking to a Guide for a while and seriously considering buying 200 BLT points direct, and it would have cost me over $25,000. I would have started with 200 points, and it wouldn't even have gotten me a week there in a 2 Bedroom, which really is what we need. But that was all I could afford, and even that was a stretch.

Then I stumbled upon this place around the same time, and read this thread. Started asking tons of questions, and doing a bunch of searches, and now I'm happy to say 5 months later, that within a few weeks, I'll be the happy owner of 330 points at Saratoga Springs Resort. I will have saved over $8,000, AND, I'm starting out with 660 points to use. And as a little bonus, will be getting 150 points that will expire on May 31, that I'm gonna use for a quick golf trip with my friends.

So thank you MO's and those of you who put in all the efforts creating threads like this. It's absolutely priceless information, and I thank you all for your openness, patience and honesty towards all us newbies out there.
__________________
-Jeff

MOD 122
PAJD is offline   Reply With Quote
Old 02-26-2011, 09:47 PM   #8
minniekissedme
Add-on Aficionado
 
minniekissedme's Avatar
 
Join Date: May 2008
Location: In my car with three kids.
Posts: 6,709
Default

Quote:
Originally Posted by PAJD View Post
Let me just say how important this thread, and then many, many threads after this were to me. 5 months ago, I knew ZERO about buying DVC. Then, by dumb luck, I found this place, and thank goodness I did.

I had been talking to a Guide for a while and seriously considering buying 200 BLT points direct, and it would have cost me over $25,000. I would have started with 200 points, and it wouldn't even have gotten me a week there in a 2 Bedroom, which really is what we need. But that was all I could afford, and even that was a stretch.

Then I stumbled upon this place around the same time, and read this thread. Started asking tons of questions, and doing a bunch of searches, and now I'm happy to say 5 months later, that within a few weeks, I'll be the happy owner of 330 points at Saratoga Springs Resort. I will have saved over $8,000, AND, I'm starting out with 660 points to use. And as a little bonus, will be getting 150 points that will expire on May 31, that I'm gonna use for a quick golf trip with my friends.

So thank you MO's and those of you who put in all the efforts creating threads like this. It's absolutely priceless information, and I thank you all for your openness, patience and honesty towards all us newbies out there.
Good stuff Jeff. You are certainly not alone in your DVC flight...trust me I know! Congrats and hope you'll continue to find MouseOwners a great place to be!
__________________
Are you MOD? aka MouseOwnersDad?? Click here to join!

MKM Maulers 2012-13 Champion of the MODly Men of the World Fantasy Football League
minniekissedme is offline   Reply With Quote
Old 02-27-2011, 12:08 AM   #9
hilaw
Grand Villa
 
Join Date: Jun 2008
Posts: 1,040
Default

Another difference is that DVD may further restrict usages for resale purchasers, in addition to previous restrictions and the present March 20th restriction.
hilaw is offline   Reply With Quote
Old 02-27-2011, 09:47 AM   #10
Wilkeroo
Two Bedroom
 
Wilkeroo's Avatar
 
Join Date: Jul 2010
Location: St. Catharines, ON
Posts: 587
Default

Quote:
Originally Posted by PAJD View Post
Let me just say how important this thread, and then many, many threads after this were to me. 5 months ago, I knew ZERO about buying DVC. Then, by dumb luck, I found this place, and thank goodness I did.

I had been talking to a Guide for a while and seriously considering buying 200 BLT points direct, and it would have cost me over $25,000. I would have started with 200 points, and it wouldn't even have gotten me a week there in a 2 Bedroom, which really is what we need. But that was all I could afford, and even that was a stretch.

Then I stumbled upon this place around the same time, and read this thread. Started asking tons of questions, and doing a bunch of searches, and now I'm happy to say 5 months later, that within a few weeks, I'll be the happy owner of 330 points at Saratoga Springs Resort. I will have saved over $8,000, AND, I'm starting out with 660 points to use. And as a little bonus, will be getting 150 points that will expire on May 31, that I'm gonna use for a quick golf trip with my friends.

So thank you MO's and those of you who put in all the efforts creating threads like this. It's absolutely priceless information, and I thank you all for your openness, patience and honesty towards all us newbies out there.
I couldn't agree more. We also knew nothing of DVC until a trip to WDW last May. When I started doing some research in June or July, I also stumbled across the resale market and this site. From that point on, I knew that buying resale was the way we could go. Our first 220 point BWV contract closes in a few days. We saved $11,000 over what we would have paid direct from Disney and our contract also came with over 400 banked points that we get to use and don't have to pay MFs on. Thanks again to all MOs that helped us learn so much through this process!
Wilkeroo is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -4. The time now is 09:09 PM.

MouseOwners. "MouseOwners" is a registered servicemark. This is an unofficial fan site and is not affiliated in any way with The Walt Disney Company, the Disney Vacation Club, Disney Vacation Development, or any of their affiliates or subsidiaries. All Disney images The Walt Disney Company.
Powered by vBulletin® Version 3.7.3
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.