And More....DVC Membership Questions

[Drake]

My spouse and I are considering becoming members....just in the 'talk' stage. We have a few questions that someone on these boards might know the answers to from their own experience. Here goes:

When you purchase your points from DVC or a re-saler.....is the total purchase price taxed? If so, then at what percentage?

If you purchase from a re-saler are there closing costs? And, can you recall how much that is?

Do the resalers offer financing like I read the DVC does?

Do you 'close', etc. 'long distance' or have to travel to FL to close?

As in buying a house.....should the purchaser have an attorney look over everything? Or, as in buying a car..........you just go with it?

I know....lot's of questions. Any answers?

 

[betslinc]

We just closed on a small resale through the Timeshare Store. There are no taxes, closing costs on small packages (under 100 points) were in the $375 range, I think they said bigger packages were in the $450 range. Everything took place via phone and mail. I don't know about financing, it seems like many people doing resale use home equity loans, which can have some tax advantages. We had a good experience, without any problems. Resales give more choices on home resorts (I've even seen a few BCV's offered) and saves a bit of money. You have to figure in closing costs, which you don't have if you go directly through Disney(but their per point charges are higher). Good luck!

 

[Lew]

There are closing costs. If you purchase through Disney, they pay all closing costs. Closing costs on our resale purchase amounted to about $500.

We have never paid tax on our purchases. If there is any, they were included in the closing costs.

Disney does provide financing, most resellers don't.

We have closed all of our purchases long distance. Disney pays for overnight document delivery both ways, our reseller did not.

You certainly have the right to have an attorney look over the documents, but I would not expect Disney to make changes in any of their documentation or agreements.

 

[amee]

We were long-distance resale purchasers(we live in Seattle)...l.and did not go to Orlando to close. We financed our own purchase and didn't even ask about financing....no one mentioned it so i bet its not available.....

We did not use an attorney in the process......it was all quite clearly stated. We were buying from a seller outside the US, so there were a few questions there, but nothing difficult. It was all pretty easy actually.
We used the TimeShareWharehouse for our purchase, which gets very little mention on these boards....they just had the deal we were looking for. They were quite professional. I wasn't crazy about TimeShareClosing Services, however. I don't know if they are used by lots of firms offering DVC resale or if it was just this one.......

Good Luck


Amee

 

[Dagny]

Hi there! We are in the "talk" stage too and have been doing quite a bit of research. I think I can answer the financing questions for you

As far as financing, it seems your best bet is to get a Home Equity Loan because your interest will be tax deductible. Your interest rate will also better than what Disney can offer.

If a Home Equity Loan is not an option for you, then Disney does offer financing (also tax deductible). Their rate is 11.95 if you put 10% down and 10.95 if you put 20% down.

There is another finance company, Tamarac, which offers financing at 11.99%, but I don't believe that you can tax this as a tax deduction (someone correct me if I am wrong).

I hope this helps!

 

[DVC-Don]

We bought a resale this past summer at OKW.

1.When you purchase your points from DVC or a re-saler.....is the total purchase price taxed? If so, then at what percentage?
No tax on the sale.

2.If you purchase from a re-saler are there closing costs? And, can you recall how much that is?
We paid $450 closing costs.

Do the resalers offer financing like I read the DVC does?
Not that I know of. We used a Home Equity Line of Credit to purchase ours.

Do you 'close', etc. 'long distance' or have to travel to FL to close?
We did it all via e-mail, phone calls from the broker and overnight mail. We never paid a dime in phone or mail costs.

As in buying a house.....should the purchaser have an attorney look over everything? Or, as in buying a car..........you just go with it?
We did not use an attorney.

 

[Drake]

Your information was speedy and invaluable!

Look's like we're going to look into the 're-sales'!

 

[MELSMICE]

We are in the process of purchasing a resale - waiting for the deed

As everyone has stated it is really a no-hassle transaction. Everything is done via e-mail, overnight delivery & occassionally by phone.

We paid for about 1/2 w/ savings & the other 1/2 with a home equity loan so we will be able to deduct the interest.

Good luck with your decision.

 

[Johnnie Fedora]

We used a CC for all our purchases, then paid it off with a home equity line/savings. We got lots of FF miles that way.

 

[JimC]

Two additional points:

1. Closing costs on resales are negotiable (think of it as any other real estate transaction); so are the maintenance fees in the current year. What is fair depends on the points banked and borrowed, size of contract, use year and price. We found this board and our agent (Pat Spell at The Timeshare Store) to be very helpful as we had lots of questions. We bought resale at OKW and BCV from Disney this past summer.

2. When you compare the value of DVC to hotel costs remember to add 11.5% to the hotel rates (I believe the rate went up .5% 1/1/03). You do not pay that tax when you are using points.

Good luck!

 

[Drake]

Yes....I've been trying to figure out what the best type of 're-sale' would be to buy...

What would be the advantage of buying say, 150 point membership, with 50 points banked? Doesn't that mean that you would be paying for 200 points at (example) $70 per point.......yet, next year you still only get 150 points? Why would I want to pay $70 per point for the banked 50 points when I could just by them from another member for $10 per point for use that year? I'm very confused over this.

Also, if points have been borrowed from the next year by the member selling....does that mean they usually ask a lower price per point when selling?

Wouldn't it make more sense to just buy from someone that neither borrowed or has any points banked?

Also, does anyone think that there is an advantage to a certain month for beginning a use year?

And, are the yearly dues for your use year.....or for the year from Jan thru Dec?

Thanks for all of your help in your responses!

Originally posted by JimC
Two additional points:

1. ........ depends on the points banked and borrowed, size of contract, use year and price. .........


Good luck!

 

[betslinc]

Drake: The beauty of buying a contract with banked points is that you pay for the number of points on the contract (ie 150) but have use of the extra banked points (ie 50), as long as you can use them before they expire.

If you have a particular time of year you usually travel it is best to get a contract with a month right before that time. For example, if you usually travel in December, a December or slightly earlier use year would be great. That way if you ever had to cancel less than 30 days out your points would go into a holding account, but you'd still have until the end of next November to use them (points in a holding account expire at the end of your use year. If your use year was January you'd only have until the end of December to use your points).

The yearly dues go Jan to December.

Hope this helps!

 

[JimC]

Betslinc is right on the money. I bought a large stripped December contract (for travel January to May) at what was then the price that below which, Disney would use their right of first refusal to pick up the contract. In order to lower the price further, I asked the seller to pay all closing costs and the current year maintenance fees. Even with the borrowed points used by the seller, it was a fair deal for both of us.

Small add-on contracts will be more expensive because some of the closing costs are fixed. Large contracts can be more difficult to sell because of the dollars involved and the lack of financing (only one company that I know of finances resale timeshares -- otherwise you need to have the cash or a line of credit). Stripped contracts seem to be priced a few dollars per point less than a contract with no banked or borrowed points. Go to The Timeshare Store link for current DVC resales (its in the header at the top of the page) and you can see what people are asking for various contracts.