At the world now, went to DVC tour today, didnt buy here is why

[Dean]

When I bought an add on of 50 points in October 2008 that had a Dec UY, they immediately banked the 2007 points into the next year for me. Not sure if it still works that way.

They've done this informally for some time but recently they changed the rules to allow new buyers to bank points up until the last day of the UY.

One thing I wonder about on those lines is how it would change the equation if people thought they couldn't sell it for a decent price. That's one of the things DVCers thought about before I bought, that I could sell it if financial fortunes changed and not take too big of a hit.

I doubt it would make any difference and certainly not much. While a few super users might think that way, most people wouldn't. ASAMOF, buying with the intent to sell later is too large a gamble to be reasonable for almost every situation I can think of with only a couple of exceptions.

 

[LisaS]

We must have been lucky then because we have several contracts, and they all were the same as far as when the maintenance fees started. Never had to pay maintenance fees until the first full use year started.

Members are charged pro-rated dues based on the later of their purchase date, the start of their initial UY and the occupancy date of the Unit they purchased. In other words, dues begin when you receive and can begin using your first set of points.

For example, I purchased AKV when sales first began in Feb 2007 which was before the resort was open. I have an Oct UY. My first points were Oct 2007 UY points. My Unit's occupancy date was Sep 1, 2007. My dues were pro-rated starting on Oct 1, 2007, when I received my first set of AKV points. If I had had an August UY, my dues would have begun on Sep 1, 2007 because even though I would have received my first points on Aug 1, 2007 I would not have been able to use them until Sep 1, 2007.

The only way you could avoid owing any dues in the calendar year in which you purchased is if you purchased new construction and either the start of your initial UY or your occupancy date fell into the following calendar year.

 

[clarkinstlouis]

OP here. Thanks for all the good information (I think) I am more confused now that before LOL but I think thats a good thing. So much to learn.

If what I am reading is right, if I purchased on the secondary market, right now there isnt much if any rights and abilities of use points/reservations/etc that if I purchased direct from DVC.

But in the future, and from what many here think that may not be far away, Disney could change things so you lose rights as a secondary buyer i.e. in terms of reservations, using points at other timeshares around the globe things like that.

IF (and thats a big if at this point) I am correct about what others are posting, then it would seem that the resale value would become very near nil, as who would want to buy secondary, thus removing one of the things I like about it (secondary market resale)

If I am off track, knock me back on the right path!!

 

[Dean]

OP here. Thanks for all the good information (I think) I am more confused now that before LOL but I think thats a good thing. So much to learn.

If what I am reading is right, if I purchased on the secondary market, right now there isnt much if any rights and abilities of use points/reservations/etc that if I purchased direct from DVC.

But in the future, and from what many here think that may not be far away, Disney could change things so you lose rights as a secondary buyer i.e. in terms of reservations, using points at other timeshares around the globe things like that.

IF (and thats a big if at this point) I am correct about what others are posting, then it would seem that the resale value would become very near nil, as who would want to buy secondary, thus removing one of the things I like about it (secondary market resale)

If I am off track, knock me back on the right path!!

It would depend on what changes were to. IF all of the exchange options were to be removed but no differentiation for DVC resorts, it wouldn't change the actual value of an ownership in any way, only the options. And IF it forced one to more correctly judge the points they actually need and pushed you to other options for non DVC trips, it would save some significant money in the long run. Obviously any price changes would depend on the actual value placed on those items by potential buyers. My guess is it would reduce resale prices by a very slim margin from where they are right now.

 

[JimMIA]

OP here. Thanks for all the good information (I think) I am more confused now that before LOL but I think thats a good thing.

Yep, confusion is a good thing. It shows you now are aware of the questions.

So much to learn.

It's not that bad and you've made a good start.

If what I am reading is right, if I purchased on the secondary market, right now there isnt much if any rights and abilities of use points/reservations/etc that if I purchased direct from DVC.

Right. There is currently no difference in the use of your points (or any other aspect of DVC) based on how you acquired those points. And never has been.

But in the future, and from what many here think that may not be far away, Disney could change things so you lose rights as a secondary buyer i.e. in terms of reservations, using points at other timeshares around the globe things like that.

I think it is very important for buyers of any timeshare to understand what is guaranteed and what is not, and also what is the core of the timeshare program and what is icing.

But I think it is helpful to understand a few things about the DIS DVC boards as well. One of our primary rules here is the "Lumpy Pillow Rule" which states that if there is the slightest blemish anywhere in DVC, it will receive maximum coverage and comment here.

Also many of us, myself included, sometimes focus on the minutiae of DVC ownership -- especially the purchasing considerations -- and that often results in us making some things sound more important than they really are. Classic examples are the suggestions we hear that people split points up into small contracts and the over-emphasis on Use Year. We mean to help, but in trying to give you every last speck of information, we sometimes have extended discussions of relatively minor aspects of ownership.

The classic recent example of those tendencies, IMHO, is our speculation about whether DVC will someday change the rules in some way to make purchasing direct more advantageous than it is now.

And finally, we not only love to speculate, but we repeat the same speculation over and over again in thread after thread...so that some readers believe it just because they've seen the speculation repeatedly.

Bottom line: Could they change some things? Sure, and it's important to understand that.

Will they? None of us know.

And if they did, would it matter to me? Likely not -- most likely, anything they did would either be something I don't care about (like RCI or cruises) or would just create another little quirk to the program that I have to manage my account around.

IF (and thats a big if at this point) I am correct about what others are posting, then it would seem that the resale value would become very near nil, as who would want to buy secondary, thus removing one of the things I like about it (secondary market resale)

Well, you're making two assumptions there -- one about cause and the other about effect. To get hurt, you'd have to get hit by the neighbor kid's ball, and then fall off the roof.

I have two thoughts about that. One is that I consider Dean one of the most knowledgeable people here about timeshares generally, so I give his opinion about what might happen to resale prices extra weight. And he doesn't seem to be too worried.

Secondly, when I bought DVC, I did not consider it an investment, nor did I consider it a depreciating asset from which I might someday recover X% of my initial cost. I considered DVC, in accountant's terms, a "sunk cost." In other words, once I wired that money to buy DVC it was gone forever.

So, to me, if I recover anything, that is gravy. Not many people look at things that way, but those of us who do are much less likely to be disappointed than folks who bought comforted by the truth that early buyers who bought in the $50's were later able to sell at a nice profit.

Keep researching and asking questions; you're doing great so far!

 

[LJM721]

The resale market is a good option. I bought through the Timeshare Store and save a considerable amount of money.

 

[VTNuke]

If they wanted to change the system and put DVCers into Tier A or Tier B based on how they became members, it would cause some problems with the ROFR's and DVC reselling the ROFR'd points.

More likely, they will add some incentives for new DVC buyers, but I doubt these incentives will be worth the price difference in actual value. An example is are the cruises they gave away as an incentive. That did get close to covering the price difference and would have swayed me if I was looking at buying at that point.

Without those types of incentives, the resale market is the way to go. DVC has been hurt by the economy and the best place you can see it is with the resale market. The prices are WAY lower than they were 3 years ago when we purchased a resale, but DVC isn't picking up the ROFR's. That to me is showing they've taken a hit like everyone else. The fact the current incentives to buy direct aren't all that great is another clue.

As the economy rebounds over the next few years, the prices on resale will rise again. The problem is it may take a few years. Now is not the time to sell, but it's a great time to buy.

 

[Brian Noble]

it would cause some problems with the ROFR's and DVC reselling the ROFR'd points.

Nope. Those would be "brand new" points, fully qualified. At least, that's how other systems treat "recycling." And, that's how OKW deals with recycled points---all of them are magically extended.

Edited to add: OP, I think investigating the resale market is wise. Take a look, see what makes sense. If you decide that a developer purchase is still a good idea, you can still go that route.

 

[clarkinstlouis]

with BLT going up to $130 point in the next month (we were told that last week at the tour) that makes the idea of buying on the secondary market either better or scarier if Disney changes the rules.

If I was to start the process now, would it be acceptable if I put in the offer if Disney changes any rights or priviliges between acceptance and closing I could walk away?

 

[Dean]

If they wanted to change the system and put DVCers into Tier A or Tier B based on how they became members, it would cause some problems with the ROFR's and DVC reselling the ROFR'd points.

More likely, they will add some incentives for new DVC buyers, but I doubt these incentives will be worth the price difference in actual value. An example is are the cruises they gave away as an incentive. That did get close to covering the price difference and would have swayed me if I was looking at buying at that point.

Without those types of incentives, the resale market is the way to go. DVC has been hurt by the economy and the best place you can see it is with the resale market. The prices are WAY lower than they were 3 years ago when we purchased a resale, but DVC isn't picking up the ROFR's. That to me is showing they've taken a hit like everyone else. The fact the current incentives to buy direct aren't all that great is another clue.

As the economy rebounds over the next few years, the prices on resale will rise again. The problem is it may take a few years. Now is not the time to sell, but it's a great time to buy.

Not at all. DVC already has it written in to the contract that they can resell as retail, break up contracts, etc. There is nothing that would prevent them from doing this. All that we'd be protected from would be usage at our home resort and to a degree, other club resorts. Even that could change. The rumors I and others are hearing are coming from within the system. While they may not come to pass, I am convinced they are being considered and I would be willing to be that some change will happen within the next 2-5 years that will mean a decrease of options for a resale buyer though I doubt it'll affect those who bought resale prior to X date. If you think they'll leave everyone (including future resale buyers) where they are and just add on to future retail buyers goodies, I think you're seriously kidding yourself.

The other issue that, IMO, follows this discussion is that of a VIP system. Maybe an advanced booking window, option to use points for dues/tickets, the list could go on and on. If done, assume the retail vs resale points would be an integral part of any system change related to such issues.

 

[Brian Noble]

The OP wrote:

But in the future, and from what many here think that may not be far away, Disney could change things so you lose rights as a secondary buyer i.e. in terms of reservations, using points at other timeshares around the globe things like that.

IF (and thats a big if at this point) I am correct about what others are posting, then it would seem that the resale value would become very near nil, as who would want to buy secondary, thus removing one of the things I like about it (secondary market resale)

Using other timeshare groups and what they have done to differentiate pre-existing systems as a guide, I don't think it's quite this doom-and-gloom. Usually, the differentiators are things that sound good on paper, but when you look at them head-on they disappear like so much smoke. For example, suppose resale buyers couldn't use their points for anything other than DVC lodging---no cruises, no Adventures By Disney, no RCI. If so, the resale buyer should be thankful, because those uses of points are almost never a good deal. You'd be far better off to rent out a reservation, and use the proceeds to buy the cruise, trip, or lodging you desire.

It's possible that DVC could come up with a differentiator that has *real* value. But, even then, the value is almost certainly going to be lower than the then-current spread between resale and retail, so you *still* come out ahead.

There are another set of differentiators that have much more teeth---for example, Marriott and Diamond both have point systems where a resale is withdrawn from the system, and you can only use it at your home resort/resort group. In both cases, it costs real money to get back in (either as a straight fee, or a requirement to purchase other points). However, these differentiators were part of those two systems from the day they were created, not added after the fact.

To add something with real teeth to an existing system after the fact is tricky, because of the way the governing rules were written in the original systems. Disney has clever lawyers, and they might figure out a way to do it, but I think history suggests that the odds are not in their favor.

More broadly: it's worth remembering that almost no one who walks into a DVC tour has the first idea about how the system works, that a resale market exists, or even what a DCL cruise typically costs. That's another reason why the differentiators can so often be nothing more than smoke and mirrors. Folks may have heard about "this resale thing", but a quick "oh, but you won't get your free newspaper and one-hour-early check in" has them thinking that maybe they better buy directly from the developer after all.

On the other hand the folks who truly understand the various value propositions are vanishingly rare, and wouldn't buy retail at 2X for practically any reason at all. So, while it seems like the increasing spread should be killing sales, it probably isn't.

In short, Mencken was right: no one ever went broke underestimating the intelligence of the American public.

 

[toocherie]

I agree on the guaranteed vs not front. We'll see if they do anything else but there are some pretty good (good sources, limited hits) indications that changes may be coming. It should be very interesting to the the reactions.

I have a reliable source too, who indicated it was because Disney can't stomach the delta between current re-sale prices and its own retail prices. And I'm assuming because of the bad economy and a surplus of people wanting to sell points that Disney doesn't want to use its ROFR (which would have artificially kept the points high if they did it on a regular basis).

A reliable source told me the same, but, told me it would not be grandfathered.

The spread between resale and WDW prices are so large it has to be killing sales. Four or 5 years ago that was not the case - why not buy through DVC as their perks could even up the score somewhat.

Yepp--Disney needs a way to level the playing field.

One thing I wonder about on those lines is how it would change the equation if people thought they couldn't sell it for a decent price. That's one of the things DVCers thought about before I bought, that I could sell it if financial fortunes changed and not take too big of a hit.

My concern too. I don't want to "make money" off of my points, but it would be nice to be able to get some value out of them (taking into account the fabulous vacations I would have already taken if/when I decided to sell some).

If I was to start the process now, would it be acceptable if I put in the offer if Disney changes any rights or priviliges between acceptance and closing I could walk away?

You could try but I don't think you would be successful. They are not very tolerant of changes to their docs. (and technically, nothing in the written docs would change, because as mentioned above, the things that are guaranteed in the documents wouldn't be changing).

For example, suppose resale buyers couldn't use their points for anything other than DVC lodging---no cruises, no Adventures By Disney, no RCI. If so, the resale buyer should be thankful, because those uses of points are almost never a good deal.

Ok, so here's the problem as I see it. As a direct buyer from Disney (sigh--I was young and stupid, ok?) I would presumably not lose any rights and could continue to do cruises, ABD or RCI trades (not that I would). But if I sold some of my points in the future I could not pass those rights on to my buyer. Or even if the system were set up so that I could pass it on to my initial buyer, presumably their purchaser would lose those rights. Like it or not, having flexibility does have a value.

I am thinking back to the horrid DVC presentation I went to on my birthday earlier this year with the "Wishmeister" at Disneyland. The ENTIRE cheesy presentation was about what you could do with your points other than stay at DVC resorts--and think it would be really bad of DVC if it were now to "change the rules" and keep resale purchasers from having these rights.

Do I think they can legally do it? Most likely (though I think an enterprising lawyer could come up with enough smoke and mirrors that Disney implicitly made promises over the years that it would cost Disney a lot of money fighting a lawsuit/class action).

Do I think they ARE gonna do it? You betcha--based on what I have heard.

Do I think it is going to affect resale prices? Yep.

Am I going to sell points ahead of the (further) drop in price? No.

 

[Brian Noble]

Like it or not, having flexibility does have a value.

That's true. And, an *individual* person might value that flexibility improperly (i.e. too high). But, *the market* usually doesn't---in part because the resale market, by definition, consists of informed buyers. Those buyers know that the RCI exchanges, cruises, etc. are poor uses of points, and so they would be unlikely to factor that into their decision.

though I think an enterprising lawyer could come up with enough smoke and mirrors that Disney implicitly made promises over the years that it would cost Disney a lot of money fighting a lawsuit/class action

I'd be surprised. That road has already been paved by the many other systems (Wyndham, WorldMark, Bluegreen, Starwood) that have already created differentiators, including in some cases the withdrawal of previously "promised" (but not contractual) features.

 

[JimMIA]

Like I said earlier...

The classic recent example of those tendencies, IMHO, is our speculation about whether DVC will someday change the rules in some way to make purchasing direct more advantageous than it is now.

And finally, we not only love to speculate, but we repeat the same speculation over and over again in thread after thread...so that some readers believe it just because they've seen the speculation repeatedly.

 

[Dean]

I have a reliable source too, who indicated it was because Disney can't stomach the delta between current re-sale prices and its own retail prices. And I'm assuming because of the bad economy and a surplus of people wanting to sell points that Disney doesn't want to use its ROFR (which would have artificially kept the points high if they did it on a regular basis).

Retail sales is ultimately the reason for all such changes.

 

[Lil' Grumpy]

ssr, i did not do the math. it was posted here & i just re-figured
using our numbers. i also rounded off as i think it was closer to
$ 94/year.

wow, i wasn't thinking what many are posting here, the changes
making resales worth less.

i think the major difference is that dvc is disney , & the onsite benefits.
there are all kinds of options that can separate those buying direct &
those buying resales.

since reading here, there also seem to be a group of professional renters,
that are working the system then owners. also getting the best rooms
by using the points they are renting. that is something i like to see
stopped. [ it's strange hearing a renter educating owners about the
rooms.] why should any renter be allow to rent more than 5x? if they
don't buy then, they never will. [ oh, i heard one boasting while
own?!-they have the best of both world. ] as a owner, i am
expecting disney to address this. also i think, no renter should
have any room requests or be chosen over owners, even if
it isn't their home resort.

i don't see why disney will try to reduce the values of resales. but
there all kinds of adjustments they can do....espeically reducing
the competition for "direct buy" .crap, i don't know how many
times, i read how those buying resales, only using those points @
the other resorts. maybe they need restrictions, like having to stay
@ their home resorts, every other year. that would give those buying
direct more of a chance to move around. there is all kinds of things,
dvc can do without reducing the values of resales. and the biggest
deal remains, being a part of wdw.

...once i read someone taunting the guide, are you worth $5,000?!
however, for us, the guides are not the issue, rather other factors. blt
is where we brought because it was where we want to be...
because of magic kingdom.

the comments toward dvc's mr. lewis. well i think those observations
made sense.

i also think there are internal abuses, owners working inside dvc,
because some things are being tolerated that others owners could
not get away with.

finally, if dvc maintains the promises that were made to us then
no matter the problems that may come, owning @ dvc @ blt
will be worth it, by our expectations.

 

[CarolAnnC]

I will play Devil's Advocate here, LOL. I am a bit skeptical. What better way to ensure solid sales for $130 per point than to have rumors that resale purchasers will possibly be losing some of their ownership "rights"?

I am a resale (as well as Disney direct) owner and I am not in a panic over these rumors. One of my resale contracts is Vero Beach, and I truthfully often use those points for cruises, though we have had VB stays both this year and last year, too.

If this were to become limited to even only staying at Vero, I would not have a problem with that. I may bank points and book a Beach House, which I have not done for several years, but certainly it would be a nice option for us.

I have another resale contract which is BWV and again I would have no problem with my use of those points limited even to just that resort.

As always, time will tell.....

 

[jsivigny]

Another way to look at it...One perspective is to look at this from pure Economics. The discussion here has revolved around the delta on pricing per point for Resale vs. New. A key factor here is that this economy has dramatically reduced disposable income for families. They can't even make the Annual dues payments. Basic economics mandates that an increase in Supply along with a reduction in Demand yields lower prices. Disney, despite their magic, can't ROFR all of these since demand just isn't there for the product and they need to keep their income rolling in on the annual dues, just to keep the lights on. Any attempts to "artificially" inflate prices, in any industry, generally fails in the long run. Hence, Disney can't afford to ROFR contracts, as the inventory costs outweigh the benefits of higher initial costs they get on new contracts. They already made their cash on the initial sale. They overdeveloped in a down economy and need to ride out the downturn, like the rest of the Real Estate market in the US. Eventually, once demand rises, Resales will get purchased, prices will rise and the spread will decrease by pure market forces. Disney has a great product and brand, but like everyone else, they are not immune.

One other factor that will play a greater role in the discussion over the years, is that by only offering 50 year limits on contracts...the resales MUST go down in price each year, since they are, by definition, worth less. Eventually, once contracts dwindle to 20 or 10 years or less, Resale values will drop even further. Disney must know and expect this, given how they've structured the contracts with time limits. Just another perspective.

 

[Dean]

ssr, i did not do the math. it was posted here & i just re-figured
using our numbers. i also rounded off as i think it was closer to
$ 94/year.

wow, i wasn't thinking what many are posting here, the changes
making resales worth less.

i think the major difference is that dvc is disney , & the onsite benefits.
there are all kinds of options that can separate those buying direct &
those buying resales.

since reading here, there also seem to be a group of professional renters,
that are working the system then owners. also getting the best rooms
by using the points they are renting. that is something i like to see
stopped. [ it's strange hearing a renter educating owners about the
rooms.] why should any renter be allow to rent more than 5x? if they
don't buy then, they never will. [ oh, i heard one boasting while
own?!-they have the best of both world. ] as a owner, i am
expecting disney to address this. also i think, no renter should
have any room requests or be chosen over owners, even if
it isn't their home resort.

i don't see why disney will try to reduce the values of resales. but
there all kinds of adjustments they can do....espeically reducing
the competition for "direct buy" .crap, i don't know how many
times, i read how those buying resales, only using those points @
the other resorts. maybe they need restrictions, like having to stay
@ their home resorts, every other year. that would give those buying
direct more of a chance to move around. there is all kinds of things,
dvc can do without reducing the values of resales. and the biggest
deal remains, being a part of wdw.

...once i read someone taunting the guide, are you worth $5,000?!
however, for us, the guides are not the issue, rather other factors. blt
is where we brought because it was where we want to be...
because of magic kingdom.

the comments toward dvc's mr. lewis. well i think those observations
made sense.

i also think there are internal abuses, owners working inside dvc,
because some things are being tolerated that others owners could
not get away with.

finally, if dvc maintains the promises that were made to us then
no matter the problems that may come, owning @ dvc @ blt
will be worth it, by our expectations.

Disney doesn't care what the resale prices are per se, only driving as many to retail as possible. As for working the system, we all work within the system to the best advantage possible. The ONLY promises that mean anything are the ones you have in writing and even then, it's possible they could change.

 

[Lil' Grumpy]

i only know how the system is "intra"-connected, and the current rules/
products have a "cause & effect" impact.

no sir, the "inside job" does not extend as professional perks, by my
way of thinking- and what i saw, was on the owners 'dollars and not
the company.

[ any i just stating it was based on our experiences. while we
received corrective measures, we never received any answers &
it wasn't hard to guess why.]

now,i am taking an interest in this "gift". our points , cost more than
our first house. no body gave us a thing. & we build our fortunes
one dollar @ a time. however, all we expect, is to be able to have
a one-bedroom , mk . view [ just like we were promised-, does not
have to be the best or the highest] , and we will be very happy.
booking @ 11mos..

things like people paying dirt cheap prices for ssr, we should not
be in competition with. of course, vice versa for ssr rooms.

however, i think there are some very capable people here working
for disney. dvc, by it very nature is different than a time share, if
it potential was recognized. maybe for example dvc should take
away any resort exchanges but make it possible for owners to do their
own exchanging.

the way we see our purchased...we brought a blt room for 60 years.
we didn't do this to make money off it but to used it for our disney
vacations. we are hoping the majority of dvc owners are more in
the line of dedicated wdw fans. & are seeking greater apprication &
care about the mission behind its creator. we are hoping for better
company than our 09/summer venture. nasty-teens [ girls] from
brazil. it was liked running a gauntlet where they were trying to
force us off the sidewalks just to get our rooms. they threw
their trash on the ground & i jumped them. hanging female products
on the rooms , "i didn't want our daughter seeing this". banging balls
off the disney icons or throwing towels or clothing on them.
while it was our turn for a character pic., a group tried to run over
us. [ note "tried"].

and this is also where i have concerns over renters. they stuck out
@ our first trip and were more aggressive/abusive toward the things
i saw. "renting" was an issue that disney neglect to informed us.
[ very much like someone selling an house with a major fault that is
hidden.] so @ first, i was not a fan of this dave guy. but after
reading all the problems here, i think disney needs to defers renting
thru such professionals, so "control measures" in place. to prevent
rip offs.[ both ways], & limit the manipulation. though i was unsuccessful
in getting specifics, his success rates left me with the conclusion that
renting can be done if set up right. which he seem to have accomplished.

renters here have alarmed me, by their intentions. one example, they
know they are not supposed to go to towl but over & over , they
posted how they are going to try. very similar to the brazilians . no respect
for the rules or other guests. then i read those sneaking in on the bridge
to watch fireworks, were also leaving all their trash. it just my opinion, but
the lake views + castle should always go to blt owners first, dvc
owners next then renters if any left over. nor do we want to have a
room that was trashed.