considering DVC, tell me the good, bad & ugly

[guess1928]

we are considering joining DVC but I want to do my homework first. We attended and talked to the DVC people but still unsure. Please tell me everything they don't tell you in the sales meeting. I have read stuff about ROFR on these boards and unsure what that is all about. I want to save money because every year since 2004 we have done a Disney trip, either to Disney World, or done cruises or done some Adventure by Disney trips. With the fact I don't visit Disney World every year matter in making the DVC worth my while? Please give me all your opinions and feedback. This is alot of money to shell out and I don't want to regret it. I have also read about buying other peoples contracts? where do you go to do that and can anyone direct me to how that works? Thanks so much. Brittney

 

[skier_pete]

Hi, we just bought into DVC (our points came through yesterday). This is a great place for advice. We've rented points before, but haven't yet stayed on our own points.

You mentioned buying from Disney versus resale. Re-sale is significantly cheaper than through Disney and gives you access to the same DVC resorts. However, with re-sale you can't use your points for non-DVC stuff, such as cruises or ABD. But truthfully, you SHOULDN'T do that, as its a terrible non-cost effective use of points. Is it worth the 30-50 % savings in up-front cost? Up to you.

Here is a list I put together back when I was first looking into it:

You should only buy DVC if the following apply:
1) You like Disney enough to go at least once a year to maybe every other year.
2) You vastly prefer staying on property AND staying at moderates or deluxes and you have the money to do so.
3) You can regularly schedule your vacations at a minimum of seven months in advance and preferably 11 months in advance. (Last minute and DVC don't go great together unless it's 1 or 2 nights.)
4) You would be 100% satisfied with staying at the resort at which you own points, because sometimes that's all you will be able to get with that long in advanced booking.
5) You don't mind not having maid service in your room. (This is sort of a hidden piece, but it's odd to be staying in such a nice resort and not get the high quality service.)
6) You don't care about trading points outside the DVC family of resorts. Anyplace else is a sucker's bet.
7) Once you spend the initial money, you better understand that you continue to have to pay maintenance fees, and these fees will continually rise. DVC will never be paid off.
8) The biggest thing to me - you have to foresee that you will want to continue stays at Disney World (on property moderate/deluxe) for at LEAST the next 10 years or more. The advantage to owning DVC is not today. When buying resale, the advantage is out about 10-12 years. (It's closer to 20 years if you buy DVC new from Disney.)

If only a few of these items apply to you, it might be wiser to RENT DVC points.

I think #3 is probably the biggest negative to DVC, the fact that you really need to be able to book well in advance especially at prime times of the year. (Mostly October - December.) As an example, the contract we bought had some points that are expiring on November 30th of this year. We didn't have to pay a maintenance fee on those points, but we decided that we would plan a weekend to go down to WDW for food and wine.

We waited patiently for the points to get into our account...yesterday....and then I went on to book the room. Well, there were basically no studios available at ANY DVC property at WDW. None. Zero. Fortunately we had enough points that we could expand the search to a 1-bedroom, and even there the only thing available was at Saratoga Springs. It cost us a lot more points than we should need to spend. Since the points are expiring anyways, it didn't much matter in this case, but you get the story - if you wanted to book a trip 5 months out - you couldn't.

Now, for fun I searched also for the same 4-day weekend type booking at the end of August - just 3 months away, and their was actually more availabilty for that than in October. So again, it all depends on when you go.

The point is, if booking less than 7 months in advance is your thing, you better be pretty damn flexible on your dates/locations.

 

[disneynutz]

we are considering joining DVC but I want to do my homework first. We attended and talked to the DVC people but still unsure. Please tell me everything they don't tell you in the sales meeting. I have read stuff about ROFR on these boards and unsure what that is all about. I want to save money because every year since 2004 we have done a Disney trip, either to Disney World, or done cruises or done some Adventure by Disney trips. With the fact I don't visit Disney World every year matter in making the DVC worth my while? Please give me all your opinions and feedback. This is alot of money to shell out and I don't want to regret it. I have also read about buying other peoples contracts? where do you go to do that and can anyone direct me to how that works? Thanks so much. Brittney

Here are my recommendations, buy where you love to stay, buy DVC for DVC stays only, take the time to read and search this board, your questions are asked and answered here several times per week.

Bill

 

[lvforvaca]

I would not buy direct, resale is much cheaper. If you go on a cruise- pay for it outright or rent points and pay for cruise with that money. Second PP you have to book early.

 

[guess1928]

wow I didn't realize that buying resale you couldn't use towards cruises or ABD. Also, what is the ROFR I keep reading about??

 

[chalee94]

wow I didn't realize that buying resale you couldn't use towards cruises or ABD.

again, before you get too carried away with this "limitation", make sure you look at the point charts for how much these trades cost...

Also, what is the ROFR I keep reading about??

it means disney has the right of first refusal on contract resales.

so if i buy a contract and years later decide to sell it, i need to find a buyer. if you decide to buy my contract at $70 per pt, disney gets to take a look at the terms first to decide if THEY like that deal.

if they want the contract at $70 per pt, they step into your shoes and give me the money and they get the contract. you as the potential buyer start over.

if they pass on the deal, you get the contract at the agreed-upon terms.

it just adds a delay and a bit of hassle (to sucker some people into paying extra to disney directly.)

 

[lvforvaca]

Right of First Refusal- Disney gets to take back points if they choose to.

 

[zavandor]

Also, what is the ROFR I keep reading about??

This would be relevant to you only if you buy resale.
When you make an offer for a resale contract and the seller accepts, you sign a contract and everything goes to Disney, who has 30 days to choose to buy the contract. If they decide to do so, you'll be back to square one and have to find a new contract.
One of the few cons of buying resale is that it will take much more time that direct (2.5 months is the average from offer to points in your account). But given the saving you could have, it's well worth.

About ABD, here just a random example:
ALASKA: Denali National Park, Anchorage & Kenai Peninsula 8 Days / 7 Nights adult: 618
child: 588

For a family of 2 adults and 2 children you would pay 2412 points.
With 2412 points you could book a studio for 4-5 MONTHS in most DVC resorts.
That's how expensive exchange options are.

 

[DanenRox]

About ABD, here just a random example:
ALASKA: Denali National Park, Anchorage & Kenai Peninsula 8 Days / 7 Nights adult: 618
child: 588

For a family of 2 adults and 2 children you would pay 2412 points.
With 2412 points you could book a studio for 4-5 MONTHS in most DVC resorts.
That's how expensive exchange options are.

WOW! That sure paints the picture!

 

[disneynutz]

WOW! That sure paints the picture!

IMO Disney doesn't want you to exchange your points for anything and they only want you to stay at DVC resorts. They set the point requirements high and when that didn't seem to reduce exchanges, they added a $95 fee.

Why offer exchanges? To market the DVC as a bigger/better program with hundreds of magical family destinations that you will remember for a lifetime!

Bill

 

[wendybeth75]

Why offer exchanges? To market the DVC as a bigger/better program with hundreds of magical family destinations that you will remember for a lifetime!

Bill

Do you write commercials? that was beautiful!

 

[Tonygee]

strange issue for the resale "buyer" in terms of real estate brokers?? They seem to "ALWAYS" make out on a sale, it's actually foolproof... they make the same commission whether ROFR is exercised or not... that's the only negative i see when purchasing resale.... think about it.. what does the TSS or any other agency lose when Disney ROFR's people? nothing....

 

[Lynne M]

strange issue for the resale "buyer" in terms of real estate brokers?? They seem to "ALWAYS" make out on a sale, it's actually foolproof... they make the same commission whether ROFR is exercised or not... that's the only negative i see when purchasing resale.... think about it.. what does the TSS or any other agency lose when Disney ROFR's people? nothing....

Why should they lose something?

As with other real estate, the seller of a DVC contract hires the realtor to sell the contract for them. Whether the contract ends up being bought by DVC or by an individual, the seller gets the same amount of money. The realtor has to do the work, no matter who the buyer is. Why should they not be compensated for their work if the buyer ends up being DVC?

Yeah, it's not fun for the buyer to have DVC swoop in and grab a contract they want to buy, but the buyer's not the one paying the realtor.

 

[chalee94]

strange issue for the resale "buyer" in terms of real estate brokers?? They seem to "ALWAYS" make out on a sale, it's actually foolproof... they make the same commission whether ROFR is exercised or not... that's the only negative i see when purchasing resale.... think about it.. what does the TSS or any other agency lose when Disney ROFR's people? nothing....

it works out best for the broker if the buyer pays a higher price (since they get paid a fixed percentage).

it works out best for the buyer if they pay just enough to pass ROFR (assuming their primary motivation is to get access to the contract ASAP).

some brokers are happy to broker a lowball deal just to move things through quickly. other brokers try to warn buyers of making too low of an offer (even though the potential buyer may be happy to risk losing it to ROFR and only want the contract if they can get it super cheap).

so it's good to know what motivations are driving each party, but yeah, i agree with lynne, the broker deserves to get paid either way. (and as noted above, conscientious brokers can catch some flak from some buyers who feel as if they are discouraging their lowball bids.)

 

[skier_pete]

If a sales company constantly low-balls offers and gets them ROFR, you would think that reputation would spread and sellers would not want to use them.

In addition, while selling low and getting ROFR'd may still get the sales agent a commission, it's going to leave behind an unhappy buyer and also probably an unhappy seller. This is generally not a good policy.

In fact, I would think it would be better for a sales agent to encourage fair market or slightly higher than fair market. This keeps the buyer happy, the seller happy, and results in larger commissions.

 

[supersnoop]

If a sales company constantly low-balls offers and gets them ROFR, you would think that reputation would spread and sellers would not want to use them.

In addition, while selling low and getting ROFR'd may still get the sales agent a commission, it's going to leave behind an unhappy buyer and also probably an unhappy seller. This is generally not a good policy.

In fact, I would think it would be better for a sales agent to encourage fair market or slightly higher than fair market. This keeps the buyer happy, the seller happy, and results in larger commissions.

I think you're confusing a broker with an agent. Brokers simply put the two parties together. They shouldn't be advising you how much to offer unless previous similar offers have been rejected. I'd be appalled if a broker suggested I increase my offer based solely on ROFR. Frankly, price seems to be the least consideration when Disney considers whether to step in and purchase a contract.

 

[Tonygee]

I think you're confusing a broker with an agent. Brokers simply put the two parties together. They shouldn't be advising you how much to offer unless previous similar offers have been rejected. I'd be appalled if a broker suggested I increase my offer based solely on ROFR. Frankly, price seems to be the least consideration when Disney considers whether to step in and purchase a contract.

not in the data provided on this forum.. it's not the be all end all, but it matters.. look at the data. lowball prices are absolutely bought back. with the occasional median to high $$ value pts. being take randomly, although i would venture to guess in these dept budgets they balance buying back certain pts/UY contracts to fulfill requests of current owners... just a guess.

 

[MsTessP]

Why would a seller be upset if the contract was ROFR by Disney? If I were selling, and had agreed to a price, then I don't think I would care whether Tom, Dick, Harry......or Mickey ended up being the buyer.

 

[supersnoop]

not in the data provided on this forum.. it's not the be all end all, but it matters.. look at the data. lowball prices are absolutely bought back. with the occasional median to high $$ value pts. being take randomly, although i would venture to guess in these dept budgets they balance buying back certain pts/UY contracts to fulfill requests of current owners... just a guess.

I don't see the data the same way you do. Every contract taken was loaded, or at least had the full current years' points available. Other than the $60's at BWV, every other contract taken had one pass at the same price. Raising your price will not prevent Disney from taking a contract that they want.

 

[disneynutz]

I have been told that ROFR is based on adjusted price, points, and pending waitlist. It takes them a couple of minutes to make a decision but they wait 30 days to make resale less desirable to impatient buyers.

Bill