Considering letting go of our contract....

[ppony]

So. We financed directly through Disney over 5 years ago. We still have 4 years left on our loan. Long story short, since we still owe on the contract, but selling it would give us a few thousand more than we actually still owe, what are our options at this point? How would it go if we just let it go back to Disney? I know there are a lot of unanswered questions here, I just want an idea. We only just last night considered letting go of our contract. It was a difficult decision. One made easier by Disney bean-counters sucking the life that we used to love out of WDW.

 

[supersnoop]

"Letting it go back to Disney" means going though the foreclosure process. I don't know if Disney's financing reports on your credit, but that's a pretty big negative.

Call a broker and see what it will sell for. If you have enough equity to cover their commission, you might end up making a few bucks.

 

[ppony]

Oh gosh. No, I wasn't thinking about letting it go through foreclosure. I was more thinking about selling it back? if you can? Or would you have to go through the whole listing it and waiting for them to have a chance of ROFR?
To answer your question though, Disney financing doesn't report on your credit actually.
Thankfully we do have equity in it right now, enough to cover a commission and then some. Not a lot, but enough. I never thought we'd do this. WDW just isn't for us, what it was when we started visiting 20 years ago and even 6 when we started the buying process. that makes me terribly sad.

 

[supersnoop]

No, Disney will not buy it back. If you call them to ask, they will refer you to Fidelity, one of the resale brokers. Legally, it's real estate. The only way out is foreclosure or sale.

 

[Dean]

So. We financed directly through Disney over 5 years ago. We still have 4 years left on our loan. Long story short, since we still owe on the contract, but selling it would give us a few thousand more than we actually still owe, what are our options at this point? How would it go if we just let it go back to Disney? I know there are a lot of unanswered questions here, I just want an idea. We only just last night considered letting go of our contract. It was a difficult decision. One made easier by Disney bean-counters sucking the life that we used to love out of WDW.

You can agree to a sale with a mortgage, you'd just have to settle it with the closing or before. Basically you'd agree to a sale price like normal and they would pay it off out of the proceeds. If more was owed than you'd get after commissions, you'd have to come up with that at closing. Generally Disney doesn't do deed backs but even if they did it's about the same scenario as a short sale is to a foreclosure. The only difference MIGHT be that they might or might not report it. I'd call and talk to Member Accounting and see what they say but a regular sale and settlement of the loan at closing is about the only real option available in this situation. You could also consider renting it out to cover the MF and at least part of the mortgage.

 

[shpdem]

i think you would be much better off renting the points out and using the money for a vacation to another location or doing the rci exchange.

 

[CarolMN]

So. We financed directly through Disney at AKV over 5 years ago. We still have 4 years left on our loan. Long story short, since we still owe on the contract, but selling it would give us a few thousand more than we actually still owe, what are our options at this point? How would it go if we just let it go back to Disney? I know there are a lot of unanswered questions here, I just want an idea. We only just last night considered letting go of our contract. It was a difficult decision. One made easier by Disney bean-counters sucking the life that we used to love out of WDW.

Making the decision to sell is probably more difficult than the selling process itself. The listing brokers do the heavy lifting - all you really have to do is decide on a listing price (the broker will guide you), accept / reject offers and then sign the documents prepared by either the broker or the closing agent & collect the money.

If you haven't already, check out the info the TSS, one of our Disboards.com sponsors has provided:

http://www.dvc-resales.com/sellers.htm#DVCfaq

Good luck with your decision. I know you have to do what's best for your family.

P.S. I'm positive you will get more money for your contract by selling it via the resale market place than you will by letting Disney have it back. If they do agree to buy it back, it will be at a price substantially less than you can get by selling it using one of the resale brokers.

 

[LisaS]

I was more thinking about selling it back? if you can? Or would you have to go through the whole listing it and waiting for them to have a chance of ROFR?

The only reports I've seen where Disney offered to buy back a contract was for BCV. They offered people $50-$55 per point at a time when BCV contracts were going for $98/point on the resale market. So even if they would offer to buy back an AKV contract, I am quite sure you will do much better selling it on the resale market.

 

[ppony]

Thanks guys. that's info I was definitely needing. Like I said, this has been a sad realization for us. We took a WDW and DCL trip in Dec., and I hadn't told my husband how I felt after that and he didn't want to say anything to me because he KNEW how much our DVC membership meant to me. We have lots to consider now. Blessings to you all.

 

[DVCcurious]

I recommend you rent the points out. Renting through a broker is very easy. You spend like 30 minutes setting up the reservation and sending the confirmation number to the rental company. They do everything else. You get half the cash up front and half at the day of check in. You can easily get $11 per point from a broker. Dues for AKL are like $6. So you "net" $5 per point per year. That should be enough to cover your loan (or at least it'll be pretty close).

Selling is so final. If you sell you won't buy back in. Selling is expensive when you consider closing costs and commissions. If you sell and decide you want to buy back in in 4 or 5 years you will regret your decision to sell.

Renting points is a lot more flexible. Rent the points, walk away from WDW for a few years. Maybe your perspective will change when you aren't "forced" to go to WDW and instead you have the "choice" to go. Right now you may not like the feeling that you "have" to go to WDW each year. If you rent your points you then open up the possibility of choosing to go to WDW or choosing to rent your points and doing another vacation.

We rented our 2013 and 2014 points because we just didn't want to go to WDW those years. We had a baby in Feb 2012 and we did a trip in Feb 2013 for his first birthday and it just wasn't fun. We wanted to wait until he was bigger to go back. So we rented the points. It was very easy to do. We used a broker who is well known (not sure if I can say the name, but if you google DVC rental it's like the first link).

 

[davidl81]

I also like the idea of renting if you are in a position to do so. Like others have said you should be able to rent and cover your cost of MF and loan payments (or come real close). This will allow two things for you, one being to have a little time to make sure this is what you want, the other is that you would get more equity in the property so if you do sell you would come with more net money.

That being said the resale market is high right now as it has been going up the last few years. It's hard to say if prices are going to go up more in the next few years, but historically now would be a good time to sell.

 

[ppony]

Thanks everyone! To tell the truth, it makes my mind spin. The options and what "what-ifs" of it all. I'm not the most analytical nor organized of a mind (ARTIST LOL), so math and anything related to that kind of management makes me have a constant deer-in-the-headlights look to me. Mh husband isn't much help in that dept. either. I appreciate all the advice and help. It really DID help!

 

[bellablue2]

best of luck to you.

 

[limace]

Would you consider trying to use your points at Disneyland or aulani? DL definitely feels more relaxed and old school than WDW does now, at least in my opinion.

 

[ppony]

Oh, definitely. We'll still rent points when we go. I can't possibly do a Disney vacation in anything else than a 1BR anymore. We're trying DL next year for the first time. With a child who'll be a junior in HS then, it's too hard to pull him out of school more than a few days, so DLR will fit that bill well. Hubby and I celebrate our 25th anniversary in 2017, so we're hoping to rent then too at Aulani. IF we can afford to go then. We might have to wait a year. If my art biz picks up, we might be able to do better, but since the economy tanked, luxuries like art are the first things people cut back on. It's so slow going for that now, so I guess we have to do what we have to do. Sad.

 

[bwang123]

"Letting it go back to Disney" means going though the foreclosure process. I don't know if Disney's financing reports on your credit, but that's a pretty big negative.

they do not report to your credit either positive or negative.

 

[supersnoop]

they do not report to your credit either positive or negative.

Regardless, foreclosure would be a court action and reported as an legal record on your credit report.

 

[luvdisneyland]

I would call a broker and see what you can expect to get for the contract ( do your homework on that one). If it is higher than what you owe, sell it and be done with it. We sold one of ours and got top dollar for it in a day. Sadly, we all know about the Disney "Bean Counters" , they only look at the bottom line and I do feel it will catch up with them at some point. You can send me a message if you would like a recommendation (don't want to break any rules here )
Good Luck!

 

[FFMickey]

they do not report to your credit either positive or negative.

What do you mean? Do they not report the debt to the credit bureaus?

 

[pachelbel9]

If you give a contract back to Disney, you can't finance through them again. A friend (who previously gave one back a few years ago) tried to add on 50 SSR points last year, and it wasn't till they were knee deep in ppwk at the sales center that they found out they couldn't finance. Personally, I was relieved to hear it since I had been trying to convince them to go resale anyway. I mean, buying SSR direct, and then financing on top of it, is just nuts. Anyway, I know OP said they aren't planning to give theirs back, but I wanted to throw that out there in case someone else is thinking of doing it and reading this post.