Disadvantages to buying via resale?

[goofy4wdw2]

We are considering resale due to the $ savings...but I think I recall hearing a few years ago that Disney started to place restrictions on how the points can be used when purchasing a resale. Does anyone know the scoop on this? Thanks in advance!

 

[Iamthequeen]

I believe the restrictions are that you cannot use resale points towards the concierge/club level rooms, Disney cruises, or Disney adventures. There might be one more that I'm not remembering. They can be used for all Disney resorts and for RCI.

 

[chalee94]

I believe the restrictions are that you cannot use resale points towards the concierge/club level rooms, Disney cruises, or Disney adventures.

actually, it's the concierge collection (a group of pricey hotels like the hotel del coronado in san diego or the mandarin oriental in DC). you can still book concierge villas at AKV if you are very lucky.

There might be one more that I'm not remembering. They can be used for all Disney resorts and for RCI.

resale pts can be used at all DVC resorts and traded out through RCI (or for club intrawest or club cordial resorts through the buena vista trading company).

resale pts cannot be traded out for any disney hotels (like the poly or POFQ).

 

[Annielkd22222]

Personally, I think that most people would agree that resale offers you a lower price, and the things you can't do by buying resale you are not likely to do anyway. Cruises and RCI have a terrible point to cash value. Resale is the way to go!

 

[Dean]

Personally, I think that most people would agree that resale offers you a lower price, and the things you can't do by buying resale you are not likely to do anyway. Cruises and RCI have a terrible point to cash value. Resale is the way to go!

RCI can be a good deal and a poor deal depending but it is not currently restricted for resale buyers, neither is the BVTC, Disney's own exchange company which currently works with Club Intrawest and Club Cordial. it's ONLY the cash type exchanges that are restricted. IMO there is absolutely nothing of reasonable value currently excluded from resale buyers. In effect, Disney did resale buyers a favor by lowering (at least for a time, likely again) resale prices.

 

[JimMIA]

With resale, you lose a bit of bragging rights.

Instead of saying, "I just spent $20,000 for a Disney timeshare!"...

You now can only say, "I just spent $12,000 for a Disney timeshare!"

Or..."I just spent $1 for an XYZ timeshare on eBay!" but that's another thread.

 

[nd43]

For a serious answer.

The resale process can be slow and relies on third party sellers to work smoothly which can (rarely) cause problems. Direct can also be slow if you want to buy an older resort.

There are benefits you lose in resale that many around here will quickly claim have zero value yet many current DVC owners use (cruise, regular room reservations, etc.). These are all discussed many times on this board if you do a search.

No one knows what Disney will do with resale in the future. In the past, they grandfathered resale contracts when changes were made. They may or may not do that again if they decide to make further changes. Others will claim the exact same could be said for "extra" benefits granted on direct contracts (which is true) but I believe it is clearly in Disney's interest to protect direct in the future, not resale. So, to me, resale comes with some risk Disney clamps down on further benefits if they determine it has become a large enough issue in their direct sales needs. For many, this is highly unlikely but you should at least understand that potential risk and measure it for yourself.

It is hard to argue against the savings of resale as the difference in cost is large. However, some make it appear there is zero downside to the process, benefits, etc. In my experience, that is not accurate. Resale can close easily but it can also become a hassle. Benefits others claim have zero value other members use often. So, it might appear there is zero benefit to direct around here but many still see it differently. Just keep reading and it will probably become clear for you as you make your own value judgment.

From what I can tell, a person is just unlucky when it becomes a real headache to buy resale as most appear to close smoothly.

 

[NDQuietman]

Though I chose to buy resale and it went fine, I do agree completely with nd43 on the uncertainty of how Disney will make choices in the future, and that their best interest is to protect direct first, and secondary market second, and only protecting the secondary market at all because the secondary market value decline could impact direct sales ( more permanency to your purchase if secondary market goes away, makes a buyer more wary).

 

[chalee94]

No one knows what Disney will do with resale in the future. In the past, they grandfathered resale contracts when changes were made. They may or may not do that again if they decide to make further changes. Others will claim the exact same could be said for "extra" benefits granted on direct contracts (which is true) but I believe it is clearly in Disney's interest to protect direct in the future, not resale. So, to me, resale comes with some risk Disney clamps down on further benefits if they determine it has become a large enough issue in their direct sales needs. For many, this is highly unlikely but you should at least understand that potential risk and measure it for yourself.

on the other side of this doomsday scenario: if disney drops the hammer on resales as you suggest, values will plummet...and who will lose more money if they need to sell? you with your $150 per pt direct contract or me with my $80 per pt resale?

 

[GiantsNiners11]

on the other side of this doomsday scenario: if disney drops the hammer on resales as you suggest, values will plummet...and who will lose more money if they need to sell? you with your $150 per pt direct contract or me with my $80 per pt resale?

Precisely. This is why I wouldn't lose any sleep over resale. Yes, Disney could, but boy....this would crush resale value if the restrictions were significant. And if they aren't significant, than few will care.

It's a delicate balance and Disney has done a great job at keeping its direct prices high (and selling!) and their resale prices high (and selling!). IMHO, it's a symbiotic relationship where both need to be healthy and Disney knows this.

 

[JimMIA]

With what we have today, I don't believe the so-called "restrictions" on resale points create any actual differentiation between direct and resale. Yes, they create a selling point for the timeshare salesmen to make. But they're timeshare salesmen and they are going to say something anyway. If people research those claims, consider the points costs of the restricted items, and evaluate how often they might actually use those features, I think most will conclude the restricted items don't matter much.

However, Disney could create differences which would matter and which would be clear benefits to direct purchasers -- most other timeshare systems have.

IMHO, the way to do that is not with restrictions on resale, but to offer benefits to direct purchasers at certain ownership levels that are actually worthwhile. Looking at some other systems, here are some things DVD could do:

• Booking windows -- give owners of large numbers of direct points a booking advantage, possibly subject to some restrictions during peak periods. There's nothing in the POS that prevents that except the guarantee that home resort has at least a one-month advantage over non-home.
• Banking, Borrowing, and Transfer advantages -- similar to the booking windows, give preferred owners advantages in those areas of account management.
• Annual Pass Discounts -- Restrict annual pass discounts to certain levels of direct points, or offer an additional discount to those with large direct purchases. This would not only provide a benefit to direct purchasers, it would also eliminate the incentive for people to buy one 25-point membership for the purpose of the AP discount for their whole family...while staying and eating offsite.
• Reserved inventory -- set aside certain inventory for direct purchasers. I think DVD actually missed the boat on this one, because it is something that would probably have to be set up when sales opened for a new resort. The classic opening for this would have been when they first started to build the monorail resorts. They could have set up a DVC II for some of that inventory and limited it to direct purchasers and had a real selling point.
• Dues schedules -- some timeshare systems charge lower dues for owners who hold larger accounts. Why? Because larger accounts are more efficient for the management company to administer and the lower dues are an incentive to buy more points. For example, Wyndham charges a Program Fee to pay for common services like MS, admin, etc. Everyone pays the same for the costs of operating their home resort, but the Program Fee goes down as your points total goes up.
• Miscellaneous -- there are dozens of other things they could do: more FPs, earlier dining reservation windows, villa location requests, etc, etc, etc. Make your own list.

 

[JimMIA]

There are benefits you lose in resale that many around here will quickly claim have zero value yet many current DVC owners use (cruise, regular room reservations, etc.).

One of the problems with discussing this aspect is that none of us know how many people are cruising, using ABD, etc. There aren't any easily observable indicators of those usages, other than occasional trip reports. There may be a lot, there may be very few; we don't know.

There is another aspect of the direct "benefits" that many neglect -- the availability for some of those options is shrinking. For example, direct points can be used for hotel stays in Disney deluxe and moderate hotels which do not have DVC villas. The number of deluxe hotels which don't have a DVC component is down to almost nothing with the additions of AKV, BLT, VGF, and soon Poly. Also, in recent years, we have seen two long periods (e.g. 10 months or more) where DCL has frozen DVC availability and not allowed any DVC bookings.

One area where it is clear DVCers are using outside options (regardless of what anyone thinks of the value) is RCI. DVC just made another big bulk deposit of RCI availability for April-early May 2014 the other day, and it's obvious from recent deposits that more DVCers are exchanging out via RCI than I would have thought.

 

[dmunsil]

However, Disney could create differences which would matter and which would be clear benefits to direct purchasers -- most other timeshare systems have.

It's actually kind of a mixed bag with the other systems. I did a bunch of research to see what kind of things other timeshare systems have done (figuring DVC might follow suit).

• Hilton has no real resale restrictions at all. Everyone is in the same boat.
• Marriott has resale restrictions that don't really matter financially; they're just minor exchange and convenience features like DVC.
• Starwood has some serious and eye-popping restrictions on most of their resorts, basically completely blocking access to their internal reservation system for non-home resorts (though you can use external exchange companies like RCI). A few resorts are apparently grandfathered in to having only minor restrictions, again sort of similar to DVC. There is a way to get the restrictions lifted by buying more points/weeks direct.
• Wyndham has significant restrictions. Not sure if you can get them lifted.
• Bluegreen has significant restrictions. I believe you could get some or all of them lifted in the past, but some of those methods may not work any more.

I consider a "significant" restriction to be something that impacts your ability to book rooms in-system, i.e. the primary value of the timeshare. Things like giving booking or waitlist priority to direct buyers, or giving them extra booking time, or blocking non-home resorts via internal booking.

I think there's an indication that the more popular and valuable the brand is, the less egregious their resale restrictions are. If you have a big national brand to protect, you can't be seen to be unfair to your customers. And frankly, I find the idea of making certain features of membership non-transferrable to be fairly slimy, which may be why Hilton doesn't do it, and Marriott and Disney only have minor restrictions. No one would buy a house from a developer under the terms that you can't transfer certain features when you sell it, so I wish people would raise more of a stink about timeshare companies doing it.

 

[CarolMN]

With what we have today, I don't believe the so-called "restrictions" on resale points create any actual differentiation between direct and resale. Yes, they create a selling point for the timeshare salesmen to make. But they're timeshare salesmen and they are going to say something anyway. If people research those claims, consider the points costs of the restricted items, and evaluate how often they might actually use those features, I think most will conclude the restricted items don't matter much.

However, Disney could create differences which would matter and which would be clear benefits to direct purchasers -- most other timeshare systems have.

IMHO, the way to do that is not with restrictions on resale, but to offer benefits to direct purchasers at certain ownership levels that are actually worthwhile. Looking at some other systems, here are some things DVD could do:

• Booking windows -- give owners of large numbers of direct points a booking advantage, possibly subject to some restrictions during peak periods. There's nothing in the POS that prevents that except the guarantee that home resort has at least a one-month advantage over non-home.
• Banking, Borrowing, and Transfer advantages -- similar to the booking windows, give preferred owners advantages in those areas of account management.
• Annual Pass Discounts -- Restrict annual pass discounts to certain levels of direct points, or offer an additional discount to those with large direct purchases. This would not only provide a benefit to direct purchasers, it would also eliminate the incentive for people to buy one 25-point membership for the purpose of the AP discount for their whole family...while staying and eating offsite.
• Reserved inventory -- set aside certain inventory for direct purchasers. I think DVD actually missed the boat on this one, because it is something that would probably have to be set up when sales opened for a new resort. The classic opening for this would have been when they first started to build the monorail resorts. They could have set up a DVC II for some of that inventory and limited it to direct purchasers and had a real selling point.
• Dues schedules -- some timeshare systems charge lower dues for owners who hold larger accounts. Why? Because larger accounts are more efficient for the management company to administer and the lower dues are an incentive to buy more points. For example, Wyndham charges a Program Fee to pay for common services like MS, admin, etc. Everyone pays the same for the costs of operating their home resort, but the Program Fee goes down as your points total goes up.
• Miscellaneous -- there are dozens of other things they could do: more FPs, earlier dining reservation windows, villa location requests, etc, etc, etc. Make your own list.

My interpretation of the POS would not allow them to treat direct owners differently from resale owners for the existing DVC resorts for things like booking windows, annual dues or account management policies like banking, borrowing & transferring points. I suppose they could establish a new club that would allow direct purchasers better windows, but they'd have to figure out a way to entice owners to move their points from the existing club to the new club.

They can offer perks and discounts at their discretion, though.

 

[JimMIA]

Wyndham has significant restrictions. Not sure if you can get them lifted.

Wyndham has several products which can only be purchased directly which supposedly give greater access to some inventory, etc. With those products, I believe the benefits transfer upon resale.

They also have VIP levels which have different booking windows, automatic discounts and upgrades, and different rules for banking/borrowing (credit pooling in Wyndham-speak). Only directly-purchased points can be counted for VIP status. When a VIP contract is resold, the VIP status goes away...unless someone in admin makes a mistake. Few think the VIP benefits are worth the huge difference in costs.

And they have one program (PIC) which is for direct purchasers, but can be bought into by some resale purchasers for a one-time fee of about $2,500. Again, not many think it's worthwhile.

With rare exceptions, booking windows don't matter greatly with Wyndham -- with a little planning you can get what you want, in most cases.

Therefore, the cardinal rule with Wyndham is "points is points" and don't EVER purchase direct.

 

[JimMIA]

My interpretation of the POS would not allow them to treat direct owners differently from resale owners for the existing DVC resorts for things like booking windows, annual dues or account management policies like banking, borrowing & transferring points.

I think we'd need an attorney -- and one who specializes in Florida timeshare law -- to decipher that for us. I don't know whether or not they could do some of these things, but I'm confident Disney lawyers could figure out a way to obtain the result they want.

I suppose they could establish a new club that would allow direct purchasers better windows

That's sorta following the Wyndham model. Wyndham has taken existing unsold inventory (which could include ROFR'd points and foreclosed points), plus unsold inventory from new purchases/construction, and put it into a separate category of inventory. During the initial booking period, only members of that category can book. At some point, any Wyndham owner can book that inventory, and the owners of that inventory can book anywhere else in Wyndham.

In the case of one such program, Wyndham Club Access, the points come from a variety of resorts and the CWA members enjoy home-resort booking privileges at all CWA resorts. Their MFs are also a blend of the MFs from those resorts.

but they'd have to figure out a way to entice owners to move their points from the existing club to the new club.

How 'bout this enticement for existing direct buyers? "If you want, we'll grandfather you in for nothing."

 

[dmunsil]

Wyndham has several products which can only be purchased directly which supposedly give greater access to some inventory, etc. With those products, I believe the benefits transfer upon resale.

They also have VIP levels which have different booking windows, automatic discounts and upgrades, and different rules for banking/borrowing (credit pooling in Wyndham-speak). Only directly-purchased points can be counted for VIP status. When a VIP contract is resold, the VIP status goes away...unless someone in admin makes a mistake. Few think the VIP benefits are worth the huge difference in costs.

And they have one program (PIC) which is for direct purchasers, but can be bought into by some resale purchasers for a one-time fee of about $2,500. Again, not many think it's worthwhile.

With rare exceptions, booking windows don't matter greatly with Wyndham -- with a little planning you can get what you want, in most cases.

Therefore, the cardinal rule with Wyndham is "points is points" and don't EVER purchase direct.

Thanks for the clarification. I read the long list of various perks and VIP statuses reserved to direct purchasers of Wyndham and thought, "Well, some of these must be important." Which I suppose is the point. The perfect resale restriction is one that seems like it would be valuable, but really isn't that important.

 

[JimMIA]

The perfect resale restriction is one that seems like it would be valuable, but really isn't that important.

IMHO, the perfect direct-purchase benefit is one which costs nothing and gives the perception of being worthwhile.

 

[Dean]

There are benefits you lose in resale that many around here will quickly claim have zero value yet many current DVC owners use (cruise, regular room reservations, etc.). These are all discussed many times on this board if you do a search.

As noted, we don't know how much they're used but likely far too often. I'd submit that how much they're used is not relevant as to buying or a decision to use for such matters and as I pointed out, removing this options from a resale buyers is a good thing in my book as it removes the temptation to buy extra points for the purpose or receiving a reduced value. The numbers are somewhat irrelevant to my way of thinking just like the number of people that finance expensive cars, a bad idea essentially 100% of the time. Actually there's no guarantee DVC will continue to treat current owners or retail buyers the same as future buyers either. While mostly speculation, there has been much talk of a VIP system which could easily leave out most current owners even if retail. Most timeshares systems now have such a system and of all of the 4 I own, DVC is the only one that doesn't have such a VIP system.

No one knows what Disney will do with resale in the future. In the past, they grandfathered resale contracts when changes were made. They may or may not do that again if they decide to make further changes. Others will claim the exact same could be said for "extra" benefits granted on direct contracts (which is true) but I believe it is clearly in Disney's interest to protect direct in the future, not resale. So, to me, resale comes with some risk Disney clamps down on further benefits if they determine it has become a large enough issue in their direct sales needs. For many, this is highly unlikely but you should at least understand that potential risk and measure it for yourself.

I think we know that the core reasons one should buy DVC will continue to be present for existing resorts and is legally protected, that of using DVC points at DVC resorts and aiming mainly at the home resort as the expectation. As I see it DVC cannot take this away or create different rules for resale or retail buyers. All else is at risk but some type of exchange option (RCI or similar) is about as close to guaranteed as well, worst case scenario would be the independent exchange companies.

It is hard to argue against the savings of resale as the difference in cost is large. However, some make it appear there is zero downside to the process, benefits, etc. In my experience, that is not accurate. Resale can close easily but it can also become a hassle. Benefits others claim have zero value other members use often. So, it might appear there is zero benefit to direct around here but many still see it differently. Just keep reading and it will probably become clear for you as you make your own value judgment.

From what I can tell, a person is just unlucky when it becomes a real headache to buy resale as most appear to close smoothly.

IF one spends enough time investigating, they should learn to put themselves in a position that will dramatically minimize any risk which done correctly is negligible other than possibly time and aggravation.

 

[bakerworld]

Biggest disadvantage to resale:
me: lets buy into DVC
DH: how much does it cost?
me: $12K - we can afford it
DH: no
me: but we have the $$ - I'll use mom's legacy
DH: no
me: can we just go listen - they'll give us fast passes
DH: sigh** if I go will go leave it
me: sure just the FP
DH: ok but this is a waste of time
me: we can do re-sale for 1/2 the price
DH: no

That was a serious discussion