Classic argument - Disney direct vs resale

[gscott8075]

Okay, folks,I've been participating in this board for a while. I've been reading and asking and reading some more.

I want to get started with 200 points - cash purchase. Resales have jumped in value - I put a bid on one at $55 and Timeshare Store told me it Disney would buy it first.

I have had several offers of $60 rejected.

Anyhow,

1. Buy from Disney - $14,400 buys 200 points. I get 200 points right away and 200 more points a few months later when my use year starts. So, I sell back 1/2 of the initial lot - so the net price is $13,400 or $67 per point.

2. Buy resale - sticking to WDW properties. Asking rate is $64 to $68 per point. Say I get $64 - that comes to $12,800 + $400 to close - that's 13,200.

And, most of the time, the seller has impacted the points with borrowing or banking.

I would think that a resale is the way to go, but the current pricing does not make it that much of a deal.

Thoughts, comments, advice?

 

[madaboutMickey]

I think you really need to decide where you plan on staying the most. We wanted OKW so there was no choice but to purchase a resale. Let your broker know exactly what you are looking for. You may have to wait a few weeks to find the right one. Many never make the website. I would not buy anything that did not have current points available or points borrowed. Banked points may be to your advantage.
If you want VWL you have no choice but to purchase from Disney.
Good luck in your decision!

 

[PixieDusting]

I think first off you need to decide where you want "home" to be. Once you've done that, the numbers will work out from there.

We recently bought 230 pts. resale at OKW (in fact it closed this week) for $55.50 per point. So...if this is where you want "home" to be....sit tight. Like you, we did have several offers (3 total) at OKW and BWV declined before we purchased this one.

<center>Lauren

All it takes is faith & trust....and a little bit of Pixie Dust!

<img width="200" height="152" src="http://members.aol.com:/pixiedusting/tink3">

 

[RobDoc]

If resale sellers (and agents) continue to hold this stance on prices, they may quickly find that they are not competitive with DVC any more.
Resales have recently entered some unchartered waters. Previously resales were competing directly with DVC for the same properties, but since OKW and BWV sold out in Nov., resales have something to offer which DVC does not. In addition, DVC has raised the purchase price to a new high. All of this would seem to favor resales even more. However, as more people do the analysis you have presented, they may well return to direct purchase- taking advantage of MB and the prorated dues structure offered by DVC. (Don't forget to add that into your example also.)

I still think there are resale bargains available, but it does depend on the financial structure of the seller -plus adding in his broker costs. If sellers remain convinced they can ask (and get) these higher sales, they will obviously continue. If they are in more of a hurry to sell, they will likely return to the reality of the situation. Stay Tuned!

Doc
doc@wdwinfo.com

 

[Lesley]

We were in a similar situation when we bought in Aug. and I went with the slightly (maybe) higher buy in cost directly through Disney just to avoid what I saw as the hassle of trying to find a suitable resale (a small package of points at BWV).

But the situation has changed...BWV and OKW are no longer available at WDW as they were in Aug. If you want to stay at either of these resorts most of the time a resale is the only way to go. Likewise if you want VWL you will need to go through Disney.

As has been stated so many times..buy where you plan to stay...and at this point (unless you're wanting VB or HH) that will determine who you buy from.


Lesley


1979 Contemporary
1992 Off-site
1994 Carribean Beach
1999 Fort Wilderness and Coronado Springs
2000 Polynesian and Old Key West
2002 Boardwalk Villas

 

[SusanSeng]

We went with a resale because we wanted to be at Boardwalk. We just sent out our check today. We paid about $200.00 less than what we would have paid with Disney, but we got about 200 extra points (because the owners points had been banked)
then we would have gotten with the Disney deal. I think we paid $65 a point. Going through Disney however may be less hassle. I really don't think you can go wrong either way.

 

[drusba]

gscott, your thoughts are correct but you left out one factor--financing. If you have to finance that resale in the market (and can't do home equity on your existing home and thus get a low home equity rate), it is likely you will pay a rate that is often 3% higher than Disney is offering. Factor in that higher interest rate and do a total cost comparison and that resale you mention for $64 a point actually costs more not less than Disney. In other words, if sellers are insisting on that amount they are limiting the people who can purchase from them to those who will pay cash. Right now it appears excess demand (probably because many buyers in the resale market want BWV or OKW rather than VWL) is giving a lot of sellers a reason to hold out for higher prices; I don't think that situation will last a long time particularly since there are going to be many like you who figure out that they are not really getting much of a deal if they have to pay $64 a point.

 

[gscott8075]

Okay, good input.

To clarify...

1. This is a cash purchase

2. We are fine with any of the 3 WDW resorts - VWL, BWV, OKW are all fine with us.

3. The dues - from what I have read, they are pro-rated if direct from DVC. Most resales ask for the dues paid for each point remaining - again, that is the starting point in the negotiations.

4. I have been told no by the broker on $55 and been rejected at $60 for three others. These were for 150 - 200 points at BWV and OKW (This was bottom line offer - including closing costs)

5. At $60, it seems worth a resale - it is a $1400 discount to DVC new purchase. $64 per point or higher does not make sense for a cash deal.

What I am missing that causes people to pay mid 60's for a resale?

As always, I appreciate your help. Dean, Richyams, Dsruba, I am counting on you to make this all make sense.

 

[RobDoc]

<BLOCKQUOTE><font size="-1">quote:</font><HR> What I am missing that causes people to pay mid 60's for a resale? [/quote]

gscott- I suspect the answer is that you haven't missed anything!
Some have not done the analysis you have and mistakenly just look at the cost per point instead of the entire actual cost of the transaction. They ignore the closing costs, any lack of prorating dues, financing costs and in some cases- even the lack of banked points- or worse yet- borrowed points.
This board has generously advised people for several years to explore resales as a cost effective alternative to direct purchase, but at this point in time the process needs to be reevaluated to be certain of the cost effectiveness.
Your observations serve to point out the issue.

Doc
doc@wdwinfo.com

 

[Richyams]

I think that once you start staying, you will have a preference between the resorts...at the very least, a preference for the resort for a certain type of vacation. For a quick trip with just my wife and I or my daughter and I, a BWV unit is prefered. For a long vacation, I wouldn't give up my OKW Grand Villa for anything in the world.....I need the 11 month window for that Grand Villa. I couldn't own elsewhere and get it every year.

That is my preference.

I think the common thread here is that your choice of resort will decide which way you go.

I agree, there isn't all that much of a difference in the costs, but there also isn't that much of a difference in the ease of the transaction either....we have only hear one bad story and one or two minor inconveniences with resales, and I would have to guess that we have heard about several hundred, or more, resale transactions.

As I have been quoted, I would pay $75 for an OKW resale before I would pay $55 for a BWV resale...but that is me and the vacation habits that I have grown so fond of. I get a grand villa at OKW every year for 12 nights and invite guests, usually, I invite two sets of guests, one for the first week, a crowded-renunion type weekend in the middle and a second set for the second week. It is VERY comfortable to have us in the master, another couple in one of the bedrooms and the common kids, I only have one, in the third...the pull out couch is rarely used, but once in a while there is a stray teenager or two for that.

For my vacationing habits, OKW and the parking out front is truly unmatched.

You may be different, maybe you hate all you family and would never invite anyone, you may even truly secretly hate your friends and be looking at this as a way to get away from them....everyone is different.

I think it comes down to where you want to stay.....and you are going to be forced to make a decision.....one of those "only one kid can live, you have three, pick one" decisions....

"From each according to his ability, to each according to his needs", Karl Marx, pretty sick, huh?

 

[nuthut]

Well said Richyams, I could not agree with you more on OKW!!!

 

[Dean]

I think the resalers are pulling your leg. I havesn't seen any indication that Disney will buy it back at $55 per point, quite the contrary. I suspect they're telling the sellers they can get more and are trying to get you to be the patsy that makes them correct. Personally, I wouldn't buy for more than $55 pp total including maints fees and closing. If you really don't care which resort and want 200 points, look at your alternatives. I'd say that if you truly don't care which resort, consider a resale at OKW for at least $1000-2000 cheaper than WLV. The yearly dues will also be some $100 or more less.

Alternatives would include buying from DVC directly and you can pick exactly what you want including use year and number of points. With buying directly from DVC you'll likely have a little less maints fees due and you may get more points than most resales. This may allow you to buy a few less points with banking and come out ahead in the long run. Regardless, good luck.

Dean

 

[mickeyc]

Any real estate transaction is only worth what an individual is willing to pay. Currently, people seem willing to pay above market value in order to own at a specific resort. Each resale offers different advantages and disadvantages. All the advise given on this board is I think on the mark. It gets down to what you are willing to pay, which means in a sellers market you could overpay on a resale. Personally, I think if you are patient a good deal will come along. I live in New Jersey close to NYC and the real estate market is hot,hot , hot. People are paying above asking price on homes and the inventory is low. Timing is everything! Good luck! I am sure you will make the right decision.

 

[gscott8075]

I am on the brink - we agree that resale should be 55-57 per point total, on the road including closing and dues for OKW/BWV?

 

[Richyams]

Should be and what you will find someone willing to sell for may be two diferent things. I would say that a total cost including closing and dues of $58-60 is good for OKW with all current points and either banked or a nearby use year. Slightly more for BWV.

You may want to try to hold out for less. Go with Century 21, all of the regular realtors along with the timeshare brokers, put you name in and tell them its a fast cash deal, for a little less.

"From each according to his ability, to each according to his needs", Karl Marx, pretty sick, huh?

 

[dmadman43]

Rich is right on the mark. We just bought 330/pts @ $59, at OKW. The whole process was a breeze. I've bought appliances where the transaction was more complicated. I was able to buy where I wanted at the point level I wanted. I didn't need financing.

Alternatively, if I went through DVC, I would have had basically one choice (VB and HH are out of the question---thanks, Rich!) -- WVL --- at $72 points. $23760 vs $19870 (adding in closing, plus I got 127 banked points. So...it was a simple decision for us. The price and the location I wanted.

 

[Caskbill]

Everyone has pretty much discussed the costs to buy the points resale, and you've factored in points borrowed, banked etc.,

If you haven't decided on a Home Resort, you might want to consider the maintenance fees. Someone can correct me if I'm wrong, but I believe the difference right now is about $0.70/point between OKW and BWV (approx 3.10 vs 3.80). On 200 points, that's $140.00 more per year to own at BWV as opposed to OKW. Don't know if you had factored that into your decision or not.

Caskbill

 

[BobH]

I bought through Disney (cash purchase). I felt more comfortable doing business long distance through Disney. I also did not think the slightly higher cost spread over 41 years was enough to make me go with a resale and the potential people problems associated with resales due to divorce, estate sales etc. I know people have done these deals very successfully, but there wasn't enough difference in price to tempt me.

 

[mooses41]

If you work at the disney store, you get a 15 % discount through disney. It might be worth it to work there part time for a little while...