Buying in at SSR or resale elsewhere?

[Minderbinder5]

I'm new to this board, and we just did our open house at SSR during our vacation a couple weeks ago. The Disney rep, obviously, only talked about buying in at SSR because that's all they're offering right now. But I'm not crazy about the exterior hallways, the location, or the theming. In looking around on this board this morning, I discovered the option of buying a resale share in another DVC property like BWV or WLV...
So, I would love some more general information or links to info about the pros and cons of going through Disney vs. a resale company. And when you go through resale companies, how have you financed the purchace? Like most, I don't just have $15k-$20k to drop on the place. Did you just take out a private bank loan? Thanks, and sorry for the lack of detail in my query!

 

[dianeschlicht]

You can do several things for financing. If you own your own home, a home equity loan is a good way to go. If you want to buy from Disney simply for the financing aspect, they also have points available for the "sold out" DVC resorts as well, but the price will be $92 per point (I think). Click on the Timeshare Store banner at the top of this page for an idea about what resales are availble and what the going rates are. The problem with purchasing resale from anyone other than Disney is that you DO need to get your own financing. If you have a specific resort you are interested in, you can check it daily, since those resales change frequently. You also need to know that Disney has a Right of First Refusal on resales, so the resale process does have to depend on what Disney might buy back. For example, if you see a resale that looks really low, it might not pass right of first refusal, and will be snatched up by Disney after your offer. Be sure to look at the contracts being offered for how available current points are. Some will come stripped of current and next years points, and wont have as much imediate value as those will banked points intact.

Oh yes, and don't forget that maintenance fees are negotiable for those banked points. The other advantage of resale, is that you can look for a very small contract that might be more affordable to you than the 150 initial buy in that Disney requires. That gets you into the system, and you can add additional points as your finances allow.

 

[Caskbill]

Keep in mind that as you look at resales, the 'value' between two different offers can be very different depending on Use Year month and whether there are banked/borrowed points.

For example, if there are two contracts for 150 points each, and one has an April UY with banked 2004 points, all 2005 points, while the other also is an April UY, but has no 2004 banked points, no 2005 points remaining, and all 2006 points borrowed and used, it is totally stripped and not worth as much.

In the first case you have 300 points right now, and another 150 coming in April 2006.

In the 2nd case you have no points until April 2007. Plus you'll have to pay all the calendar year 2006 dues.

Even if you just figured a point is worth $5.00 (typical rentals are $10), that makes the value of the 450 point difference between the two contracts at about $2250, or even as high as $4500.

If both sellers want $82/point then it's obvious which contract is best.

Of course this example uses the extremes, but there will be some difference in all contracts. Even is two contracts are stripped for example and have no 2005 points left, but all points for 2006, then a February Use Year is more valuable than a December Use Year not only because you get points sooner in one than the other, but also because if you pro-rate maintenance fees (the same way DVC prorates fees when someone buys a new contract), the Feb UY is more valuable unless the Dec UY owner is willing to negotiate the calendar year 2006 fees. (Effectively pro-rating them the same way they were prorated for them when they first purchased directly from Disney).

Bottom line, just do your homework, negotiate (your broker can help you understand a contract's 'value'), and watch out for ROFR.