Closing Costs: Resale vs. Direct Add-On

[glamdring269]

Haven't seen a lot of data on this from recent months so just wanted to double check:

1) Resale closing costs: Known as they are part of the listing.
2) Direct add on closing costs: ? Anyone have some recent data points you wouldn't mind sharing? (Specifically looking for "direct add on" only.)

In looking at recent contract postings for small add-ons (50ish) it seems like Direct vs. Resale is a near wash assuming closing costs are similar on both. However, I know the direct add on actually has lower closing costs so in many cases, in the current market for certain resorts, it likely makes sense to purchase direct. Just wanting to confirm this is true.

Thanks!

 

[Ben E N]

I only have experience of one each, but resale had costs around $600, and direct had closing costs of $111 for a 25 point contract. I think those are both pretty typical for any size contract.

 

[4luv2cdisney]

60 points direct last week cost me less than $150 in closing. I think it was maybe $147.

I do not understand how exactly they calculate MF's when buying resale, but I didn't have to pay any up front with my direct purchase. They said after I close, I can go online and set up monthly payments and my 2017 fees would be prorated. The MF stuff is a little murky to me but it seemed like via resale I'd be paying more in MF's but it didn't factor into my decision because I'm really not sure of the math. Maybe someone else can clarify.

 

[Ben E N]

MFs are the same either way. When you pay resale, you negotiate who pays what. When you buy direct, you pay your share of that year's fees, non-negotionable.

 

[4luv2cdisney]

MFs are the same either way. When you pay resale, you negotiate who pays what. When you buy direct, you pay your share of that year's fees, non-negotionable.

From the way it was explained to me (but I'm not sure I'm correct) MF's are by calendar year not UY. So, if you as a resale buyer are paying 2017 MF's (pretty typical if you are getting 2017 points) you are paying for 12 months of MF's. So, for a resale contract I bid on which they would not pay 2017 MF's, I was paying 12 months of MF's -vs- 3 months of MF's direct.

If MF's are around $6.50/pt, that equals a $4.88 / point savings over resale.

 

[Littlelulu01]

Direct closing costs go up along with the contract size. A 50 point add on direct is around $200 closing costs. 25 point add on around $100. That's about what you can expect for a small (25-50 point) add on.

Resale depends. I've seen everything from $350-$650 for a 25-50 point contract. So figure you can spend anywhere from $150-$550 extra for resale over direct for 25-50 points.

 

[glamdring269]

Thanks all, this is basically what I expected. Was trying to negotiate on a 50 point contract at a popular resort and the best we could get to was a price point that was more expensive than buying direct if you consider all factors (including closing cost variance).

 

[Littlelulu01]

60 points direct last week cost me less than $150 in closing. I think it was maybe $147.

I do not understand how exactly they calculate MF's when buying resale, but I didn't have to pay any up front with my direct purchase. They said after I close, I can go online and set up monthly payments and my 2017 fees would be prorated. The MF stuff is a little murky to me but it seemed like via resale I'd be paying more in MF's but it didn't factor into my decision because I'm really not sure of the math. Maybe someone else can clarify.

Which resort was this? CCV closing costs were higher than this on my recent add on.

 

[Ben E N]

Yes that is correct. This is one of Disney's main selling points. Something to consider when comparing resale vs. Direct and one contract vs. Another. It is almost impossible to get a large Dec contract right at the end of November, though, so those savings are not too significant usually.

 

[Littlelulu01]

Thanks all, this is basically what I expected. Was trying to negotiate on a 50 point contract at a popular resort and the best we could get to was a price point that was more expensive than buying direct if you consider all factors (including closing cost variance).

I think with the 25-50 point add ons, there's not much if any savings however they still get the high prices, especially the 25 point contracts because someone new to dvc can buy in for so little. They can then take a transfer of points for vacations every so often, add on a 25 point direct... Dvc won't sell a new member this small a contract so people are willing to pay direct price for contract sizes this small.

 

[glamdring269]

I think with the 25-50 point add ons, there's not much if any savings however they still get the high prices, especially the 25 point contracts because someone new to dvc can buy in for so little. They can then take a transfer of points for vacations every so often, add on a 25 point direct... Dvc won't sell a new member this small a contract so people are willing to pay direct price for contract sizes this small.

Yeah I get it for 25 but not really for anything above that. Definitely understand that the pricing resale vs. direct should certainly become a wider range as contracts get larger but would expect anything >25 to be cheaper resale vs. direct. I think the market is just weird right now. If it holds like this for awhile though we may just go up to 100 points resale or go just go ahead and do a direct 50 point buy. The savings doesn't seem to be worth the stalking in that range currently though. (at least for some specific resorts)

*edit*
I was just looking at the direct "new" vs. "add on" and I guess this could actually be a phenomenon that might impact multiple resorts up to 100 points. Never really looked at it this closely before. So I guess the point where savings may really start to kick in will be >100 points depending on resort.

 

[Littlelulu01]

Yeah I get it for 25 but not really for anything above that. Definitely understand that the pricing resale vs. direct should certainly become a wider range as contracts get larger but would expect anything >25 to be cheaper resale vs. direct. I think the market is just weird right now. If it holds like this for awhile though we may just go up to 100 points resale or go just go ahead and do a direct 50 point buy. The savings doesn't seem to be worth the stalking in that range currently though. (at least for some specific resorts)

I agree on 50 points. A 25 point resale contract that exceeds direct pricing has merit. 50 points resale exceeding direct pricing seems kinda pointless.

Edit to add: if paying over or at retail on 50 points with intention on adding on 25 direct you are almost at the 100 point threshold of direct so almost better to just buy direct. If you don't intend on direct 25 add on then paying high prices on a 50 point contract still makes sense.

I still say the 25 point unicorn AKV resale contract is the best way to get started with dvc. It gets 5 nights studio every other year in 3 seasons. If banking and borrowing it gets a week stay in two seasons. If a person wants direct benefits; a 25 point add on gets pass discount... and for a total of 50 points ownership you actually can vacation at wdw annually for a week if willing to stay first two nights at pop. If a person really wanted a disney bargain that's the least expensive way to do it.

 

[4luv2cdisney]

Yes that is correct. This is one of Disney's main selling points. Something to consider when comparing resale vs. Direct and one contract vs. Another. It is almost impossible to get a large Dec contract right at the end of November, though, so those savings are not too significant usually.

But it wouldn't need to be a Dec UY.....purchasing any UY on Dec 1st means you are only paying 1/12 of your 2017 MF's. Actually, the value in that seems like it would be greater for an earlier UY.

I could have bought 50 pts direct on Aug 1 for an Oct UY. I would have gotten 2016 points and 2017 points...my MF's for 2017 would have been about $135 and my closing costs around $130. I think that's kind of the ideal situation for pulling the most value out of a direct purchase. Too bad I chickened out. lol

 

[4luv2cdisney]

Which resort was this? CCV closing costs were higher than this on my recent add on.

BWV

 

[Dean]

From the way it was explained to me (but I'm not sure I'm correct) MF's are by calendar year not UY. So, if you as a resale buyer are paying 2017 MF's (pretty typical if you are getting 2017 points) you are paying for 12 months of MF's. So, for a resale contract I bid on which they would not pay 2017 MF's, I was paying 12 months of MF's -vs- 3 months of MF's direct.

If MF's are around $6.50/pt, that equals a $4.88 / point savings over resale.

That's largely correct. Retail you pay the remainder of the year of MF on a prorated basis. For resale they are negotiable but most resale companies have a default which is incorrect of "you get the points you pay the fees". It's really an acknowledgment of either lack of understanding of how the fees are calculated or a money grab but you just need to understand this is the way it is and look at the overall costs/process including closing costs. If you can find a resale contract that's fully loaded and you can use the banked points, you don't normally pay dues on those so that can swing the tide and of course, the resale should be enough cheaper to justify the other issues. Rarely should this push one to retail but just away from a given contract or possibly, a given reseller.

 

[Ben E N]

But it wouldn't need to be a Dec UY.....purchasing any UY on Dec 1st means you are only paying 1/12 of your 2017 MF's. Actually, the value in that seems like it would be greater for an earlier UY.

I could have bought 50 pts direct on Aug 1 for an Oct UY. I would have gotten 2016 points and 2017 points...my MF's for 2017 would have been about $135 and my closing costs around $130. I think that's kind of the ideal situation for pulling the most value out of a direct purchase. Too bad I chickened out. lol

But it wouldn't need to be a Dec UY.....purchasing any UY on Dec 1st means you are only paying 1/12 of your 2017 MF's. Actually, the value in that seems like it would be greater for an earlier UY.

I could have bought 50 pts direct on Aug 1 for an Oct UY. I would have gotten 2016 points and 2017 points...my MF's for 2017 would have been about $135 and my closing costs around $130. I think that's kind of the ideal situation for pulling the most value out of a direct purchase. Too bad I chickened out. lol

That's a good point that does swing the close spread of resale vs. Direct in the direction of direct. I could have gotten a September use year contract with all the 2016 points included, MF free, plus only 1/3 the 2017 fees. On a $185/pt contract, it would have saved me about $9 per point in MFs compared to paying for them all. Still a big difference compared to what I paid resale though.
This is good for resale buyers to know when negotiating on loaded contracts, as they can tell sellers to pay the MFs, as it is the common practice for DVC to do the same.