How many people buy resale?

Discussion in 'Purchasing DVC' started by karebear06, Oct 25, 2012.

  1. Aladdin72

    Aladdin72 Keep Moving Forward

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    Following this thread, thought I would add 2 cents worth.

    My wife and I just purchased Direct at SSR for 175 pts with a March UY yesterday. That said, we looked at several resale locations and the financing options as well for the purchase. The incredible thing was, because we bought and dictated our purchase location and use year we received our current year's(2012) points (and we have 2 weeks to decide to bank or use) and will receive our upcoming year's points obviously. We have a first payment due in Feb, and put down 15% to cover the 7 weeks of dues. Our monthly payment (10yr financing, but our finances will allow us to pay it off in Aug 2013), include the annual dues over 12 months. With us banking the points we essentially received 350 pts for March 2013 use, paid 55/pt, with the full benefits entitled to direct buy, AP pass and all....

    This was by far cheaper than the currently listed prices of most regales at SSR for 63+ /pt, with no ROFR issues or anything.

    I have to say I am extremely happy with this and will purchase our next round in Nov 2013 at OKW for 200 Pts and same UY. There was no downside to this purchase, you just have to be smart on the time to buy, make your intents known for what you want in terms of pts and UY and they (Disney) will accommodate you.
     
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  3. ThumpersWorld

    ThumpersWorld Mouseketeer DVC Gold

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    It certainly is difficult to quantify the direct impact of Disney's ROFR policy on the market for resales but as an owner there is something very reassuring knowing that there are some very deep pockets propping up the dvc market.

    Maybe not a perfect analogy but one could look back to the financial market panic of 2008 to see the calming effect that a very large buyer of last resort can have on sentiment. Until the govt gave itself the powers to intervene decisively there seemed to be no bottom in sight.

    Leads me to believe that the mouse's bazooka and its willingness to use it (even if only occassionally) has got to be worth something.
     
  4. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    They've devalued all resales including those that buy retail, once you buy no matter who from, it's worth the 50%. The reality is that they won't actually make any real money at 50% because they're competing with their own retail products and those retail products don't cost them much or any more than that anyway. ROFR isn't about making money on resales (sure they make some but not much) but more about control of the market and driving sales to retail. It worked fairly well when resale prices were 80% or so but not at around 50% which is likely the reason for the differentiation between resale and retail buyers.

    To a small degree. There have been times where the ROFR price played prominently in the resale prices but currently I don't think that's the case and hasn't been for a long time. Sure there are isolated issues where there might be some affects but overall it's not really a player in prices right now. Those fire sales are a lot less likely now than even 5-10 years ago due to the internet.
     
  5. Lizard Valley

    Lizard Valley Mouseketeer

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    I hate to tell you this, but you didn't do the math right. Or you misunderstood. You only have 350 points for 2013, all of the other years only have 175 points.

    You can't divide your total purchase price by 350 pts to get a per point price. At best, you can subtract the value of the 2012 mf's that you didn't have to pay (about 5/6ths of the total 2012 mf's) from the purchase price, then divide by 175 (not 350).

    So:
    19,250-690=$18,560/175=$106/pt

    You paid 106$/pt, not 55$/pt.

    Sorry...
     
  6. JaimeA

    JaimeA Mouseketeer

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    I saw that thread before I thought they bought resale, but now I see the word direct, ouch!

    Sent from my iPad using DISBoards
     
  7. LisaS

    LisaS DIS Veteran

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    If you purchased directly from Disney then your contract cost you $110/point. For that price you will get 175 points every Use Year from 2012 through the end of your contract.

    If you purchase a resale contract that has all 2012 UY points and beyond intact, you would get exactly the same total number of points for, say, $60-$65 per point. You might even find a resale contract that has all of the 2011 UY points banked, giving you an additional year's worth of points over what you got from Disney. With resale purchases the seller usually asks for reimbursement of the current year's dues. Whether or not that is justified is a bit complicated and depends on the contract's UY and how many banked and current points you are getting.

    Closing costs will be higher with resale so add a couple of dollars/point to account for the difference. Even at $70/pt, you would save $7000 buying SSR on the resale market.

    Just an FYI: If it has been less than 10 days since you signed your paperwork, you can rescind your purchase and get your money back.
     
  8. ELMC

    ELMC DIS Veteran

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    Not to pile on, but there is a serious communication problem here. Either your purchase was not explained accurately to you, you did not understand the explanation, or you are not explaining it accurately to us. Regardless of the source of the misunderstanding, the paradigm of direct purchases is fairly consistent; I feel very comfortable saying that there is zero chance that you purchased SSR directly for $55 a point and/or for less than resale contracts (especially if you financed...which adds between 10-15% to the cost starting year one). It would be worth it for you to reexamine these numbers to make sure you understand exactly what you are spending, because I have a feeling it is a LOT more than you think. Good luck.
     
  9. ELMC

    ELMC DIS Veteran

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    Not to burst your bubble, but there was nothing incredible about this. You are currently in the 2012 use year. So even though "calendar" March 2012 has passed already, you are still entitled to those points because your 2012 use year runs from March 1, 2012 to February 28, 2013. The tricky way to exploit this is to buy a UY contract a few weeks before the end of the UY [for example, buy a DEC UY on November 25]. That way you get "two years worth of points" immediately. With all due respect, it sounds like your guide put a nice polish and bow on things that you are legally entitled to in order to make a direct purchase look more attractive. He didn't actually do anything extraordinary for you, sorry to say.


    Point of clarification, resale buyers receive the same "perks" as direct buyers vis-a-vis annual passes, merchandise discounts, TiW eligibility, etc. The only perks available to direct purchasers that are not available to resale purchasers deal with the use of points, and even those are not guaranteed and can be changed/removed at any time.
     
  10. DougEMG

    DougEMG DIS Veteran

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    Current pricing for SSR is $110/point. For the 175 points you bought, that comes to $19,250.

    If you think you actually only paid $55/point, then your total for 175 points would only be $9,625.

    Please check your contract and figure out how much you are actually paying and that will tell you the price you paid per point.

    As someone else already pointed out, you probably took $19,250 and divided that by 350 points (your 2012 and 2013 points) to come out with your $55/point number. Or else a tricky salesman manipulated you into thinking of it that way.

    Hope you are still as happy once you realize that you are paying $110/point.
     
  11. dvcterry

    dvcterry DIS Veteran

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    Exactly. Once they receive their Purchase Agreement & Note and Truth in Lending Document it will clearly state that. It was a miscalculation on their part, a misunderstanding.
     
  12. Theaberdeenkid

    Theaberdeenkid Mouseketeer

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    I agree, we just bought our first contract, it was direct.
    Why you ill informed boy,you say?

    No I am very well informed, I knew about resale before my wife and I bought direct.

    Why direct?

    Because we didn't want any restrictions on our points (not matter what the "value" of using them elsewhere is) and I wasn't worried about the extra money I paid.

    Will I buy direct again? Probably, but I'll make that decision when I come to it.
     
  13. AllieV

    AllieV DIS Veteran

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    Based on nothing but my own hunch, I'd venture to say it's 75% direct, 24% resale, 1% inherited.

    Resale used to be appealing for people who wanted to buy at sold out resorts (before disney got back in that game) or those who wanted specific sized contracts. Now, it's all about the savings.

    If you have easy access to a lot of money, resale is the way to go. If you don't have the cash, can't get a loan or a cheap loan, you'll find yourself in the Disney rabbit hole as so many do.
     
  14. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    I'd be surprised if resale were that high, I'd guess direct more in the 90% or more range overall.
     
  15. bighoo93

    bighoo93 Mouseketeer

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    This kind of makes me wonder then why people think Disney needs to change things up to stop bleeding DVC sales to the resale market.
     
  16. ErikdaRed

    ErikdaRed DIS Veteran

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    I think it is less of an issue of lost sales, and more of an issue of preventing buyers remorse on the part of people that buy direct and then (once upon a time) found that someone else got the same product for much less.

    I think it is just an issue of the current restrictions are no longer covering for the value difference between Direct and resale (probably measured directly in complaints received).
     
  17. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    Because even at 10% (assuming), it's still a lot of money. Plus it's likely a changing number since people are becoming more and more informed. While I'd give out the 10% resale as a guess looking at the last few years, I'd guess 5% before that then I'd guess the next few years it'd be more in the 15-20% range. Frankly, I doubt DVC has the backbone to make enough changes that will make a big difference in the resale vs retail issue and that lack of commitment has likely already cost them far more than anything else they could even do. IMO there are things that DVC could do that would make every single buyer want to purchase retail even at a much larger cost difference than we have today but I don't see them going to those extremes.
     
  18. bighoo93

    bighoo93 Mouseketeer

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    Gee, they could just start offering a fair market price.
     
  19. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    That's tough for timeshares, even Disney. Generally the markup is roughly double the real costs. Plus market forces don't work well with timeshares due in part to the limited audience much like a collectible item that's obscure. It's more effective to up the pressure to get people to tour then buy and to make buying resale less attractive. It's likely that the companies that specialize in reales for DVC have more to do with the current prices than does DVC or the market currently but each plays a role.
     
  20. bighoo93

    bighoo93 Mouseketeer

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    I'm getting confused, I think because I don't have the actual data, so I am taking in a composite of information from the boards here.

    Does Disney have a problem with languishing points that they can't sell in their inventory? I was under the impression that they were nearly "sold out" of points at all resorts. I understand that there is some steady state at which they are perhaps claiming points due to foreclosure and they can sell those again. But it isn't like they are unable to completely sell all of their points, or that they are getting in a price war with resale. They sell all of their inventory. And that's all there is. Until they build a new resort, there isn't anything left to sell. And when they do build that, then they sell all of those points. The way it is described in some of these threads is as if DVD is "losing sales" to the secondary market. But if they are selling everything they've got, then what sales are they losing? They can't just manufacture points out of thin air.

    A certain percentage of people own resale points because a certain proportion of buyers end up wanting or needing to sell their points before the end of the contract. It is as simple as that. DVD doesn't buy points back directly, except through ROFR, do they? So it is just a fact of being in the timeshare business, there is going to be a secondary market, and some people will end up with points from that market. If this is undercutting their business, then perhaps there is an issue to deal with (besides high direct prices). But if they are selling out their points, then the percentage of people with resale points is mostly just a factor of turnover.
     
  21. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    Every single resale is a lost retail sale. If they were handling all they could under optimal circumstances, it wouldn't matter but if that were the case, it means they underpriced their product as well. Sales need a pace to be optimal but every resale purchase, and every person that doesn't buy retail because of the resale market, is a lost potential sale they can't get back plus possibly any acquaintances of that person as well.

    From Disney's standpoint they don't want you to be able to sell no matter the reason behind it, they want a one way street only. IF they could sell more points and faster at a level that generated the desired profit or more, they'd generate the points to do so. They'd get some from ROFR, raise prices faster for more profit per point, build more resorts, maybe charge more per villa, and many other similar examples.
     

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