Steps to buying resale

How exactly does the process work? Browse listings, find one that looks like a good fit, and then what? If one needs financing, should that be set up first (it would be very short-term and paid off at tax time next year when I know how much of my bonus I get to keep - I just don't want to wait!), or after making an offer? Do we need to hire a professional on our end for anything? If someone could walk me through the whole process that would be awesome. Thank you!

Mmw37 said:

How exactly does the process work? Browse listings, find one that looks like a good fit, and then what? If one needs financing, should that be set up first (it would be very short-term and paid off at tax time next year when I know how much of my bonus I get to keep - I just don't want to wait!), or after making an offer? Do we need to hire a professional on our end for anything? If someone could walk me through the whole process that would be awesome. Thank you!

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Never looked into financing but I think you might need to get pre approved in order to make an offer-especially if you might make an offer on a "coveted" listing (i.e. lower priced than others, small contract etc) as they go quickly and I would imagine if a seller had two similar offers and one was contingent upon getting financing (because not pre approved) they'd take the other offer.
The brokers are actually transactional brokers which means they work on behalf of both the buyer and seller (are supposed to be neutral). However considering that they make commission based on the sales price it is in their best interest (financially) to obtain as high a price as they can. The closing company is the entity who will do the title search, prepare closing documents, record the deed transfer, obtain title insurance, etc so they are working on your behalf to ensure a clean title is transferred to you. I would suggest signing up for all the major resale companies' email lists to get the most up to date listings and keep an eye out until you see something that matches your wants/needs. Keep in mind the resale process generally takes 2-3 months from the time you sign contracts and forward them to Disney for ROFR so you won't have access to the points for a few months once you find a contract you like. Also Disney can exercise ROFR and buy the contract out from under you causing you to start all over. Good luck!

Mmw37 said:

How exactly does the process work? Browse listings, find one that looks like a good fit, and then what? If one needs financing, should that be set up first (it would be very short-term and paid off at tax time next year when I know how much of my bonus I get to keep - I just don't want to wait!), or after making an offer? Do we need to hire a professional on our end for anything? If someone could walk me through the whole process that would be awesome. Thank you!

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I'm not sure where you are in your investigation so I'm going to assume you're fairly early in the process. IMO one needs to figure out if DVC is a good fit. In my view that means sufficient Disney and DVC experience to be able to answer these type of questions for someone just starting and a good 6 months of active investigation. One needs to consider resale as the main alternative in most cases, be able to afford it (to me that's cash not hoping for a bonus later), be able to plan at least 7 months out, use ONLY at DVC resorts and be OK with the compromises of a timeshare. Once you have decided to buy, hopefully with these limitations, it depends in part on what you're looking to buy. If what you want is hard to get, commands a premium and is in short supply; you need to get on the email lists for various brokers AND communicate with them so you can get on listings as they come in before they're listed. Many in that category never make the website. You don't need a buyers agent, you just need to understand the process and what you're getting into.

Here's the process IMO. You investigate and see if DVC is right for you, THEN you get enough into to decide on home resort and UY, you investigate the going rate for what you want, assuming resale is the best (it is for most people), you then get up with brokers and start looking for the right contract and making offers. Don't be afraid to get turned down but don't spend months trying to get the best deal ever, esp for smaller or more difficult to find contracts. Once you have an agreement, you just wait for closing. Start to finish should be somewhere around 9-10 months before you'll be a member and be able to make a reservation starting from scratch. IF one doesn't have sufficient info to make such decision, they should consider renting privately for 1 or 2 trips before proceeding, that will add time to the process but is well worth it in that situation. IN reality there is little savings lost by 1 or 2 rentals.

Yes, I'm very early in the process, lol. I'm asking a lot of questions here, reading, browsing listings to get a handle on prices, and trying to figure out if it's something that will benefit our family long-term. We're heading down for a trip in Jan, but I didn't quite understand the point rental system at that time so we were unable to get a DVC property - we're staying at Beach Club resort instead.

As a side note, I'm not worried about the actual cost, and I'm not planning to buy 500 points of Poly direct or anything. I know the prevailing wisdom is not to buy without cash in hand, and that would be my first choice. I'd just hate to wait so long that we miss the 7 month window for our next trip and have to pay cash instead of points (although as you said, it probably isn't the end of the world). My bonus and dividends are guaranteed but are not part of our budget - they go to vacation and other large fun things. The only question is how big of a chunk I have to send back to Uncle Sam, so I don't spend them until after tax time. If we get our tax forms on time this year, it won't be an issue.

One reason I posted this was because I read a reference to a buyer having a lawyer on another thread. I wanted to make sure I didn't need to have anyone or anything else lined up on my end, aside from the money.

Thanks!

Mmw37 said:

Yes, I'm very early in the process, lol. I'm asking a lot of questions here, reading, browsing listings to get a handle on prices, and trying to figure out if it's something that will benefit our family long-term. We're heading down for a trip in Jan, but I didn't quite understand the point rental system at that time so we were unable to get a DVC property - we're staying at Beach Club resort instead.

As a side note, I'm not worried about the actual cost, and I'm not planning to buy 500 points of Poly direct or anything. I know the prevailing wisdom is not to buy without cash in hand, and that would be my first choice. I'd just hate to wait so long that we miss the 7 month window for our next trip and have to pay cash instead of points (although as you said, it probably isn't the end of the world). My bonus and dividends are guaranteed but are not part of our budget - they go to vacation and other large fun things. The only question is how big of a chunk I have to send back to Uncle Sam, so I don't spend them until after tax time. If we get our tax forms on time this year, it won't be an issue.

One reason I posted this was because I read a reference to a buyer having a lawyer on another thread. I wanted to make sure I didn't need to have anyone or anything else lined up on my end, aside from the money.

Thanks!

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As far as a lawyer goes if you use one of the major DVC brokers they each have a standard contract they utilize and are not willing to make any changes to the language. So if you aren't comfortable with the way it is written you'd just have to withdraw you're offer and move on.

I recently put in my first offer on a resale contract and I noticed that particular broker required that you be pre-approved for financing before placing an offer. I wont be financing so I didn't pay much attention, but the drop down menu on the online offer form only offered the options for pre-approved with xxxx, pre-approved with yyyy, or not financing.

Mmw37 said:

Yes, I'm very early in the process, lol. I'm asking a lot of questions here, reading, browsing listings to get a handle on prices, and trying to figure out if it's something that will benefit our family long-term. We're heading down for a trip in Jan, but I didn't quite understand the point rental system at that time so we were unable to get a DVC property - we're staying at Beach Club resort instead.

As a side note, I'm not worried about the actual cost, and I'm not planning to buy 500 points of Poly direct or anything. I know the prevailing wisdom is not to buy without cash in hand, and that would be my first choice. I'd just hate to wait so long that we miss the 7 month window for our next trip and have to pay cash instead of points (although as you said, it probably isn't the end of the world). My bonus and dividends are guaranteed but are not part of our budget - they go to vacation and other large fun things. The only question is how big of a chunk I have to send back to Uncle Sam, so I don't spend them until after tax time. If we get our tax forms on time this year, it won't be an issue.

One reason I posted this was because I read a reference to a buyer having a lawyer on another thread. I wanted to make sure I didn't need to have anyone or anything else lined up on my end, aside from the money.

Thanks!

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IMO rushing for that next trip will cost you more in a number of ways than that next trip would save you. You'll have to make your own financial choices but I'd point out that unless the bonus is guaranteed even if you lose your job or the company goes under, it's not really guaranteed. But by the time you're appropriately ready to proceed you should likely be close to having the funds in hand. If the only variable is the taxes, you should have an idea at that point of how you stand. It sounds like a rental for the trip after Jan would be the best choice if you can't do it for that given trip. IMO you don't need a lawyer unless your own situation is complicated like you're putting it in a trust. But you do need to understand what you're getting into and the commitment and risk involved.

Just exploring options for now, hence all of the questions thank you! There isn't really anything complicated on our end. I like to research things, and I have a lot more to think and read about before we make a decision here - I only went down this rabbit hole about 2 weeks ago.

I heard in a FB group that DVC only allows Monera to hold a lien on the property. Is that true? Or was the person who said that blowing smoke?

Mmw37 said:

How exactly does the process work? Browse listings, find one that looks like a good fit, and then what? If one needs financing, should that be set up first (it would be very short-term and paid off at tax time next year when I know how much of my bonus I get to keep - I just don't want to wait!), or after making an offer? Do we need to hire a professional on our end for anything? If someone could walk me through the whole process that would be awesome. Thank you!

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We just financed through Monera. If it is under $30,000 you are guaranteed approval as there is no credit check. When we bought, we put in our offer and made sure the broker knew we were financing. As soon as it was accepted I filled out the online form at Monera. By the time I had received and signed the offer Monera had already sent the letter of commitment to finance to the broker. It was super easy.

As far as needing a lawyer, we didn't need anything like that. We just had to have the mortgage paperwork notarized. It required a witness but someone at the bank just signed for that. Again, super easy! Good luck with your purchase.

Mmw37 said:

As a side note, I'm not worried about the actual cost, and I'm not planning to buy 500 points of Poly direct or anything. I know the prevailing wisdom is not to buy without cash in hand, and that would be my first choice. I'd just hate to wait so long that we miss the 7 month window for our next trip and have to pay cash instead of points (although as you said, it probably isn't the end of the world).

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When you're thinking about timing, note that there is a significant period after the seller's acceptance of your offer before you are able to book a reservation. The steps (and times it took in my case) are roughly:

• Offer accepted.
• Contracts e-mailed by the broker. (Same day or next day.)
• Both parties send executed contracts to the broker and buyer sends a deposit to the title/closing agent. (You control how long it takes you, but I've had a seller take a week to send the contracts to the broker.)
• Broker sends contracts to Disney to decide whether to exercise their Right of First Refusal. (Should be same day the executed contracts have been received.)
• Disney has 30 days to consider whether to take the contract under the RoFR. (Shouldn't take more than 30 days, but for my last purchase, the broker hadn't heard back by Day 30 and it took a week after I inquired for them to confirm that Disney had not exercised their RoFR.)
• Title/closing agent requests estoppel letter from Disney and then prepares closing documents and e-mails them to the parties. (This took about ten days in two recent purchases.)
• Parties execute the closing documents and send them back. Buyer also sends a certified check for the remaining amount due. (Again, you control how long it takes you, but not how long the sellers take. This took three weeks in my most recent purchase. Some of the documents need to be notarized, which shouldn't be a big deal for a US seller, but a non-US seller may have more difficulty and may need to make an appointment at and go to a U.S. embassy or consulate.)
• After receiving the closing documents and funds, the title/closing agent closes the transaction and releases funds to the seller. The title/closing agent files the deed and sends a copy to Disney for processing. (This should be the same day the last set of closing documents is received, or the next day.)
• Disney processes the transaction, creating the DVC member account or adding the points to an existing account. This summer it took 7-10 business days for points to be added to an existing account, but it can take substantially longer for the membership information to be received (in the regular mail) by a new member. (I think it took more than a month before we received the mailed information.) According to reports on this board, some members have been able to get their member numbers as soon as Disney finished processing the purchase by calling Member Accounting (800-800-9800 option 3).

So 2.5-4 months in the ordinary course (And there are reports of it taking a lot longer.)

Oh, and if you need financing, that could add more time (although you could probably arrange it all while waiting on ROFR if it's not set up earlier). If I were to do a short bridge like you're considering, I'd draw on a HELOC on my residence -- cheaper than the high rates charged on DVC-specific financing and no additional complications for the DVC purchase.