Buying DVC Resale in the “new normal”

[Perryo]

Purchasing DVC resale appears to be turning into a 5 to 6 month long ordeal.

I believe it is time for a DVC Show topic, or maybe an in depth DVC Fan article written by a knowledgable person, giving some honest answers on what is going on with the deteriorating DVC resale process in the “new normal”.

I would like to know things such as:

What are the actual rules for ROFR? The old “Disney typically responds within 30 days” line on the DVC resale sites no longer applies.

Can the contract be closed without a Disney’s ROFR response after the minimum 30 days is past? If not, why not?

What are the actual rules for estoppel? Who requests it and when in the process should it be requested?

What is the time limit for Disney to respond to the estoppel request?

What is a reasonable resale contract closing date? It used to be around 60 days and is now pushing toward 110 days. Is pushing out the closing dates “enabling” the time delay problem?

Can Disney legally deny resale owners access to their points for upwards of 2 months after the contract purchase is complete by delaying the DVC member account set up process? (They still seem to be able to grant instant access to new direct purchase owners.)

What advice should the broker be giving potential DVC resale buyers, given the now very lengthy resale process, on items such as:

The value of any previously banked or borrowed points on the contract. Will they be useless (expired) by the time the purchase process is completed?

Will the current UY points on the contract be past their banking window by the time the purchase process is completed? If so, should the banking of current UY points by the seller be a part of the buyer’s offer?

Will the current UY points on the contract be likely to expire before (or immediately after) the new owner finally has access to their points? If so, should the buyer’s offer include the owner’s responsibility for paying current UY maintenance fees?

I have been in the process of buying a BLT contract since April 25th and it appears that I still have a long way to go. It would have been nice to know the answers to some of these questions at the start of the process.

 

[badeacon]

A lot of good questions. Another one about estoppel is why some closing companies send closing documents in several days and some in 4-5 weeks. The slow ones say they have to have estoppel before can send closing documents.

 

[ldo]

Will the current UY points on the contract be past their banking window by the time the purchase process is completed? If so, should the banking of current UY points by the seller be a part of the buyer’s offer?
Will the current UY points on the contract be likely to expire before (or immediately after) the new owner finally has access to their points? If so, should the buyer’s offer include the owner’s responsibility for paying current UY maintenance fees?

for the near future, I'd probably buy with a UY that had a very safe margin for banking. If you can add in extra time, resale is a still a great deal, IMHO.

 

[Sandisw]

The rule is that you must give Disney at least 30 days before setting a closing date.

So, yes, you can set it for something shortly after that, and legally close. However, most brokers give extra time and many sellers want it as well because it can take a little bit to get to a notary.

I know my contract I just bought gave both buyer and seller 7 days from when closing documents were sent....which was 10 days from waived ROFR.

Direct sales are set up even before a contract has been signed or closed so I don’t know what the difference actually is in terms of who handles it and whether there is a legal recourse for resale purchasers for the timeframe differences.

Everything with a resale is negotiable and as a buyer. I think all your questions are ones to consider when making an offer, I bought with a Dec UY at the beginning of May and made my offer contingent on those points being banked prior to the sale,

I think a broker will answer questions you may have but I have not yet heard or had a broker give me advice about an offer. However, I have always gone in knowing what my wants were for each specific contract I put a bid in on.

I do know with the recent timeframe, some brokers are increasing the closing date to ensure a buyer is aware it could take that long.

 

[sethschroeder]

Would love light shed on this.

 

[CastAStone]

I assume the closing delay problem is that Disney won’t process estoppel if they haven’t actively waived ROFR?

 

[meanwoodwhite]

I can understand most of the delays at this moment. But the one that I can't and is most unforgivable is the delay in membership setup and points usage. As been said this is obviously an easy procedure if it can be done instantly for a direct purchase.

 

[CLE2WDW]

This is where resale sellers should start to get creative and basically use an escrow-like system while the buyer/seller await DVC’s response. Basically, give the buyer immediate access to the sellers points and hold the purchase price in a 3rd escrow account. If the contract somehow gets refused a pre negotiated cost/point is held back in escrow and given to the seller while the remainder of the purchase amount is returned to the buyer. This gives buyers a littler extra incentive for sticking with an offer for 3+ months potentially.

 

[pkrieger2287]

This is where resale sellers should start to get creative and basically use an escrow-like system while the buyer/seller await DVC’s response. Basically, give the buyer immediate access to the sellers points and hold the purchase price in a 3rd escrow account. If the contract somehow gets refused a pre negotiated cost/point is held back in escrow and given to the seller while the remainder of the purchase amount is returned to the buyer. This gives buyers a littler extra incentive for sticking with an offer for 3+ months potentially.

Creative idea... I would worry that the administrative aspects of this would be time-consuming for no financial gain. You're asking a lot of the resale company for no real added return or increased commission.

 

[CLE2WDW]

Creative idea... I would worry that the administrative aspects of this would be time-consuming for no financial gain. You're asking a lot of the resale company for no real added return or increased commission.

Valid. I suppose the only way to address that would be to increase the commission they earn. Although given the value they are achieving for buyers and sellers that may be worth it. Personally, I’d pay slightly more than the going rate if I had use of the points faster.

 

[MICKIMINI]

It is in the brokers best interest to get through ROFR and close as quickly as possible. DVC can slow walk ROFR all they want and the brokers are reluctant to anger them (last year I had a 50+ day ROFR). I don't think DVC has much of an incentive to process resale contracts quickly right now and so they won't. If you are buying a contract that has points that can be banked, have it written into the contract. Otherwise, we wait...