Resale restrictions - when announced in the past?

[spears2008]

I'm curious when the last round of resale restrictions were announced. ie. the restriction that resale contracts can't be used for the non-DVC hotels, cruises, etc.

I'm a new DVC member and have been thinking that any new resale restrictions would be announced at the member meeting this week. I have no historical knowledge of when the last round of restrictions were announced, so I don't know if this is a fair assumption or not.

Also, I'm thinking of adding on another resale contract. I currently have a contract at BLT, which I bought based on the "buy where you want to stay" thinking. I'd like to buy another contract that is less expensive per point which I would use if reserving within the 7 month window, therefore, I'm currently flexible as to which resort this new contract would be at. In the past when contracts were grandfathered, was there any offical warning that the restriction would be imposed as of x date in the future or did the restriction go in place immediately upon announcement? I am concerned that I might be in the middle of the long ROFR to closing process on a contract for a resort that I wouldn't prefer to stay at when restrictions are announced and that any new contract I purchase may not be grandfathered if I haven't closed yet. Did DVC give people time to close contracts, or even dump contracts they wanted to sell prior to the last round of resale restrictions becoming effective? How were DVC resale contracts impacted price wise? Was there a big dip in prices?

Thanks for your input!

 

[montrealdisneylovers]

As we were looking into buying DVC at the time, I can tell you that the announcement was made around January 20, 2011 for any resales purhcased on or after March 21, 2011.

We hurried up and purchased our BLT resale contracts so that we would be in the system by the deadline. We did not have much time for negotiating!!

We are sooooooooooooo happy we did!!!

 

[GOOFY D]

As we were looking into buying DVC at the time, I can tell you that the announcement was made around January 20, 2011 for any resales purhcased on or after March 21, 2011.

We hurried up and purchased our BLT resale contracts so that we would be in the system by the deadline. We did not have much time for negotiating!!

We are sooooooooooooo happy we did!!!

Wow, considering the 2 month or more turnaround on resales, that does not give you a lot of time to purchase if interested in doing so. We are looking to add on at another resort but have not been able to find the right contract for our wants. I am nervous that the rumors about restricting to home resort only could be true and we would be stuck not being able to get what we want.

 

[montrealdisneylovers]

Back then the turnaround time was a little over 1 month. It seems to be a lot longer now.

I believe Disney said that the contracts had to be submitted to them for ROFR by March 20, 2011. Not sure if they would do the same in the future.

 

[DebbieB]

I doubt they would announce that at the annual meeting. They usually avoid topics that will cause controversy at the meeting and slip them in at another time.

 

[spears2008]

Thanks for sharing your recollection of the 2011 restrictions. This actually makes me breathe a sigh of relief that I don't have to jump on a contract until I'm ready to purchase. 2 months notice is a tight timeline, but it can be done.

I purchased a small BWV contract from Fidelity and that contract moved along wonderfully. We had to wait the full 30 days for ROFR, but both sides signed all documents promptly and I think we were closed within about 6 weeks of the original offer.

My BLT contract is another story entire. Although we agreed on the terms in early October, I am actually still waiting to close. We reached an agreement on price and terms only a week following my BWV contract, but had to wait weeks for the contract to arrive, then it needed revisions, it wasn't submitted to ROFR until 2 weeks after the contract was executed by both sides, then we had revisions to the deed. Now, I'm waiting on docs from the seller. I wired funds for closing on Nov. 27th after we cleared ROFR and received closing docs. The seller is in Canada, and I understand that it's a bit of a bother that the seller has to go to a US embassy or return to the US to sign the deed in front of a US notary. That being said, I am surprised that 2 more weeks have gone by since I transfered the funds.

A transaction moving at the pace of my BLT contract would be an issue if a buyer was trying to beat another round of resale restrictions. My hope is that the resale restriction rumors will not come to pass, but if they do, I'm hoping we can find another small add-on contract in time.

 

[csharpwv]

OK, I'm going to get all strategic here -
There has to be more resale restrictions coming - here's why.
There is a lot of unsold inventory in the system right now - Aulani, Animal Kingdom Villas, and Grand Floridian dropping into the system some time in the not so distant future - they have to do something.

Have you seen the price of resales lately?

To say they have tanked is putting is very mildly.

The fact that we bought Hilton Head BEFORE the resale changes for less than $43 a point, and the fact that extended OKW contacts will sell for less than $60 per point - and a Saratoga Springs contract sold this weekend on ebay for less than $40 per point (not saying that it will pass ROFR - but putting it out there none the less) - if Disney ever wants to sell direct contracts, they will do more, to make resales LESS attractive.

They 'have' to make resale contracts buy it and use it where you bought it.
That is IF they want to keep the value in the system - OR change the system to create a 'new class' or resorts.

To see points that I bought just a few years ago worth far less - and barely worth owning compared to paying cash to stay at WDW (we travel most often during heavily discounted periods... free dining etc)

So the fact that they keep raising the price per point, and taking away perks like Valet Parking - they have to make some changes in the value of contracts sold outside the club.

Especially for current DVC members who want to add on - the value of buying direct diminishes, even when considering the inability to exchange into ALL of what DVC offers to direct purchases.

There has to be an added value... beyond what's currently on the table.

Annual passes, dining discounts during low travel periods, benefits that most DVC members will value. When you look at why MOST people buy DVC is because they are value minded..... not so much of a person willing to pay 50% and not get more than 50% back. Something else has to change!

SO, when you look at resale listings, knowing that the vast majority do not sell at the asking price - people who OWN DVC are willing to NOT OWN DVC even if it means losing a good deal of cash initially laid out - to recover SOME of what they spent, or to escape the burden of MF's in tough times.

What questions you ask might be coming? I have a few suspicions -

-The inability to 'trade' within DVC (own at Saratoga stay at Beach Club)
(The only thing you are guaranteed to in the RTU is access to your home resort)
-The inability to bank or borrow resale points
(once again, not a guaranteed in the RTU tmk!)
-Limits on perks on resale ownerships
-The issuing of a new member number, requiring multiple accounts, for each resale account purchased.
-The inability to transfer point in or out of the contract

To return value to the program, they have to return value to OWNING DVC, not continue to lose value through allowing resales to convey with nearly all conveniences still intact.

We own 4 contracts, at 4 separate resorts, 2 direct, 2 resale - 1 resale was purchased way before the changes - the other in the shadows before the changes. Because we do use DCL exchanges - we won't be buying another resale contract - UNLESS they make a ton of changes to resales and we can get some really low priced VWL points that we HAVE to use every year! HAHA

 

[Sandisw]

I'm still having trouble believing that there is a way to restrict points to their home resort based on resale vs. direct status.

The way I read the POS, the only way to do that is to remove a resort from the club. But if that happens, all owners of that resort would be restricted. And, the more points at a resort that can not be traded out, the harder it is going to be for those that can trade to trade in.

I do think that there will be something that happens down the road in terms of restrictions and I would think it would be more likely that they could restrict trading to the new resorts by making them something different. Or, possibly charging a fee for trading out and that fee is waived if you are using direct points.

Again, not a lawyer, so really not sure whether any of that is even possible. But one thing is for sure, whatever it is, I'm confident it will be able to stand up to the terms of the POS.

 

[DebbieB]

Keep in mind this is all just rumor. One time there was a rumor on this board that you would have to cancel and rebook if you changed the names of people on your reservation. That way you could not rent an existing reservation. I typically book at 11 months with just my name and then add friends names later when I find out who is coming. I actually e-mailed DVC and got a call from member satisfaction saying it was not true.

It's a double edged sword with implementing resale restrictions. On one hand, it encourages people to buy direct. On the other hand, you are buying with the knowledge that it will be very difficult to sell if you need to. My personal situation was uncertain when I bought (I traveled with my mom who was in cancer remission) so knowing I could sell and get a reasonable amount back made it a lower risk for me.

 

[bighoo93]

They do not "have" to do this. They might choose to, but they do not have to. There are many alternatives. It isn't even clear that they have any need to change things up at all. We really need some hint of data about the situation to suggest that they should or need to do something so dramatic. So far, I haven't seen anyone with any.

 

[Dean]

didn't they end up counting those that had been submitted by the cutoff date as qualified instead of closed? I seem to recall that as a point that came out later apparently as a late decision by DVD.

 

[KingRichard]

I was watching that SS on Ebay and I don't think it really sold. The winning bidder was new and only bid on that item.

Wasn't going to get into a bidding war with a fake account.

 

[JKMJ441724]

I am nervous that the rumors about restricting to home resort only could be true and we would be stuck not being able to get what we want.

uh, what?

I have not heard that. I'm not actively looking to add-on but always have it in the back of my mind.

Tell me more about this rumor. I may use it to push my husband into taking the plunge.

I don't really see how disney loses when someone buys resale. The ORIGINAL points came directly from Disney somewhere down the line, no matter how often it has been sold or re-sold. Then they have someone staying at their hotel - PROBABLY going to the parks, buying food and souvenirs and drinks. I know making money on the room is important to Disney but they still have a ton of ancillary income after the sale.

 

[DebbieB]

uh, what?

I have not heard that. I'm not actively looking to add-on but always have it in the back of my mind.

Tell me more about this rumor. I may use it to push my husband into taking the plunge.

I don't really see how disney loses when someone buys resale. The ORIGINAL points came directly from Disney somewhere down the line, no matter how often it has been sold or re-sold. Then they have someone staying at their hotel - PROBABLY going to the parks, buying food and souvenirs and drinks. I know making money on the room is important to Disney but they still have a ton of ancillary income after the sale.

DVC doesn't care about money made in the parks, that's not their area. They are trying to sell their newly built properties, that's where their profit is on Disney's balance sheet. They paid for construction, they need to get it back plus a profit. If someone buys resale instead of direct, there is no money in that for DVC.

 

[Missyrose]

uh, what?

I have not heard that. I'm not actively looking to add-on but always have it in the back of my mind.

Tell me more about this rumor. I may use it to push my husband into taking the plunge.

I don't really see how disney loses when someone buys resale. The ORIGINAL points came directly from Disney somewhere down the line, no matter how often it has been sold or re-sold. Then they have someone staying at their hotel - PROBABLY going to the parks, buying food and souvenirs and drinks. I know making money on the room is important to Disney but they still have a ton of ancillary income after the sale.

And for the record, there's no guarantee they grandfather in previous resale contracts. They did it once, but that doesn't mean they'll do it again.

 

[JKMJ441724]

If someone buys resale instead of direct, there is no money in that for DVC.

Not trying to start an argument, honestly not understanding the logic.

SOMEONE bought it originally from Disney. They already got their profit on the original sale. So are you saying that Disney should buy them all back on ROFR and then sell them to new "original" owners?

I'm thinking about your answer as I type. I think we are coming at it from different sides. I think I see where you are coming from. There are a finite number of buyers and Disney wants them coming straight to them. But looking at it like that, once you've bought in, you are stuck. You would never be able to sell.

 

[bighoo93]

DVC doesn't care about money made in the parks, that's not their area. They are trying to sell their newly built properties, that's where their profit is on Disney's balance sheet. They paid for construction, they need to get it back plus a profit. If someone buys resale instead of direct, there is no money in that for DVC.

Of course not, because DVC/DVD doesn't own the property. They've already received their profit from the original sale. The secondary resale market doesn't hit their P&L at all. There is an unstated (and to my knowledge, never supported or quantified with actual, real data) that sales in the secondary market are direct losses from Disney revenue. Unless someone has some data to support this, I think we should be cautious in our conclusions about the magnitude of this impact and what DVD cares about. DVD is wholly owned by Disney, so a fair assumption would be that they serve the company, and do not just go about their own ways to maximize their own bottom line without regard to the company as a whole.

 

[GOOFY D]

And for the record, there's no guarantee they grandfather in previous resale contracts. They did it once, but that doesn't mean they'll do it again.

Not sure how they would not grandfather. To not do so would be to significantly dimish the value of something someone already purchases (after the fact). Would seem they would want to avoid that situation as much as possible.

 

[GOOFY D]

uh, what?

I have not heard that. I'm not actively looking to add-on but always have it in the back of my mind.

Tell me more about this rumor. I may use it to push my husband into taking the plunge.

I don't really see how disney loses when someone buys resale. The ORIGINAL points came directly from Disney somewhere down the line, no matter how often it has been sold or re-sold. Then they have someone staying at their hotel - PROBABLY going to the parks, buying food and souvenirs and drinks. I know making money on the room is important to Disney but they still have a ton of ancillary income after the sale.

http://www.disboards.com/showthread.php?t=3028134

 

[DebbieB]

Not trying to start an argument, honestly not understanding the logic.

SOMEONE bought it originally from Disney. They already got their profit on the original sale. So are you saying that Disney should buy them all back on ROFR and then sell them to new "original" owners?

I'm thinking about your answer as I type. I think we are coming at it from different sides. I think I see where you are coming from. But looking at it like that, once you've bought in, you are stuck. You would never be able to sell.

If there is a family that is new to considering DVC, they want them to buy one of the new properties direct, not buy a resale where they (DVC) don't make any money. They don't care if the existing member loses alot of money when they try to sell. They can also scoop up low ROFR's and sell them at the direct price and make a profit on those. I'm not sure with closing and administrative costs what the cutoff is for them to make money on a ROFR, it also depends on the resort, if they will be able to sell direct. It's a lose for them if a new member buys resale, they lost a direct sale.