Buy New from DVC or Buy Resale?

[DVC Mike]

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.

This thread will be made a sticky and everyone can add their comments on the pros and cons of a prospective DVC member buying resale versus buying direct.

Regardless of which route you take, all DVC members were, until recently, treated exactly the same -- whether you bought direct or via resale.

Benefit of Purchasing Direct

DVC announced a new policy that limits access to certain Member Getaways exchanges for Ownership Interests purchased on the secondary market (also known as the re-sale market). Under the new 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 within the Concierge Collection, the Disney Collection or the Adventurer Collection. Those Vacation Points will instead be valid only for reservations at Disney Vacation Club resorts, as well as for RCI exchanges, Club Cordial and Club Intrawest. That said, Members who purchased on the secondary market prior to March 21, 2011, may use those Vacation Points for all Member Getaways.

Initial Purchase from DVC

• You can get the exact number of points that you want (although you must typically buy a minimum of 160)
• Faster than resale (you will be in the system and have your points and be able to make reservations much faster than resale)
• 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.
• 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-deductable (in most cases) since it’s a mortgage
• 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.

Initial Purchase via Resale

• You may not get the exact number of points you want
• You can purchase less than 160 points for your initial buy-in to DVC (Disney typically won’t let you buy less than 160 points).
• It will take much longer to get into the DVC system and have your points (resales typically take 6-8 weeks), and you can't make a reservation until then
• Disney may exercise ROFR** and you may loose the resale and have to start all over.
• Resale is typically less expensive then buying from DVC, and you can negotiate the price with the seller
• 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.

** What is 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.

To help insure your resale offer passes ROFR, take a look at the ROFR database.

Which Resale Company?

There are several reputable companies out there that offer DVC contracts, such as:

The Timeshare Store

DVC By Resale (Shontell Crawford)

Resales DVC

[salmoneous]

Nice lists. I would add www.resalesdvc.com to your list of reputable companies.

[kelly4me]

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.

[DVC Mike]

Originally Posted by kelly4me

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.

[jrbdad]

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.

[minniekissedme]

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.

[PAJD]

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.

[minniekissedme]

Originally Posted by PAJD

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!

[hilaw]

Another difference is that DVD may further restrict usages for resale purchasers, in addition to previous restrictions and the present March 20th restriction.

[Wilkeroo]

Originally Posted by PAJD

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!