Costs associated with selling a contract

[theMoreDisneytheBetter]

For those in the know…how much do you typically lose in fees/commissions/etc when selling a contract. My mom is convinced that selling back to Disney when they are buying back points is a much better deal than selling to a third party because of all the fees, whatever that means, but I’m skeptical given the thriving resale market and the fact that Disney isn’t particularly generous. Eg if a contract sold for $100/point realistically how much could the seller expect to pocket?

Thank you!

 

[intamin]

For those in the know…how much do you typically lose in fees/commissions/etc when selling a contract. My mom is convinced that selling back to Disney when they are buying back points is a much better deal than selling to a third party because of all the fees, whatever that means, but I’m skeptical given the thriving resale market and the fact that Disney isn’t particularly generous. Eg if a contract sold for $100/point realistically how much could the seller expect to pocket?

Thank you!

The commission fee typically is 8.5-9.25% depending on the broker. And yeah no, it's better to sell it through a broker than through Disney. Disney's buy back prices are extremely low if they even offer to buy it back directly.

 

[pianomanzano]

Disney doesn't generally buy back contracts directly from members and often times recommends that members look at the resale market (I believe they used to recommend a specific broker, but unsure if they still do). All brokers generally charge anywhere from 7-10% commission on the sale plus a $150 estoppel fee. Closing costs are generally paid by the buyer and you could also negotiate getting annual dues reimbursed by the buyer as well.

How much she'll make depends on what resort your mother owns, contract size, and how many points are currently available for this and next use year. dvcresalemarket.com maintains a blog that publishes monthly resale prices. I'd suggest going there to get a sense of what your mother could possibly sell her contract for.

 

[theMoreDisneytheBetter]

That makes so much more sense than what she heard from Disney. At one point she said that they were buying back OKW for $100/point and basically no fees, but I find that extremely hard to believe.

Good to know that the only fees are the commission and estoppel.

 

[DonMacGregor]

I've recently sold 2 contracts through brokers. Both charged me 8.5%. That plus the $150 estoppel fee DVC charges were the only fees paid.

 

[intamin]

That makes so much more sense than what she heard from Disney. At one point she said that they were buying back OKW for $100/point and basically no fees, but I find that extremely hard to believe.

Good to know that the only fees are the commission and estoppel.

What they'd offer is probably half of that honestly lol

 

[TheDailyMoo]

plus a $150 estoppel fee

That plus the $150 estoppel fee DVC charges were the only fees paid.

Is this negotiable? I ended up paying this on my resale purchase. I'm 99% sure anyway.

 

[Jwaire]

That makes so much more sense than what she heard from Disney. At one point she said that they were buying back OKW for $100/point and basically no fees, but I find that extremely hard to believe.

Good to know that the only fees are the commission and estoppel.

Post I saw was between $80-$88 back in 2021 for OKW and SSR depending on the contract. Disney offered to cover closing (because they close in-house of course).

Wouldn't be bad for now, but obviously back then it wasn't a deal by any means.

They were ROFRing OKW for up $130 per point back then too.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-october-21/

Obviously, the market has changed now.

 

[Epcot Forever Forever]

Post I saw was between $80-$88 back in 2021 for OKW and SSR depending on the contract. Disney offered to cover closing (because they close in-house of course).

Wouldn't be bad for now, but obviously back then it wasn't a deal by any means.

They were ROFRing OKW for up $130 per point back then too.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-october-21/

Obviously, the market has changed now.

Yeah back then OKW market was at like $110. Now it’s dropped into the $80s so I’m sure Disney would offer less but I’m also not sure they’d currently offer anything.

One thing I recall from that 2021 offer was that it was only good on like 8-9 resorts, and also didn’t include certain UYs at some of those resorts.

 

[theMoreDisneytheBetter]

Thanks all! It doesn’t necessarily make sense for us to sell the OKW contract now because we have borrowed against it (currently at VGC, not a bad trade!), but I’ll explain the difference in fees and encourage her to reconsider resale at some point.

 

[RoseGold]

Disney was buying back right after Covid, when they had nothing to sell but RIV. The prices were an absolute joke to the point I don't know how they slept at night. Complete rip off. They sent off letters targeting particular resorts, and maybe even particular demographics. It was disgusting.

If she's worried about the fees, you can sell on Facebook. Call a reputable title company and get an estimate. The buyer pays those costs. If she's not in a hurry, you could find an educated buyer who is willing to buy this way. I almost did it.

EDIT: Not sure what you mean by "borrowed against it." If you mean borrowed points, you can still sell no problem.

 

[theMoreDisneytheBetter]

I just meant that a stripped contract sells for less and she’d rather use the points to upgrade to nicer rooms at 7m than sell way below market. But after buying another 200 VGF yesterday and with us still considering adding on at Riviera or Cali we may have “enough” SAP without the OKW contract.

 

[pianomanzano]

I just meant that a stripped contract sells for less and she’d rather use the points to upgrade to nicer rooms at 7m than sell way below market. But after buying another 200 VGF yesterday and with us still considering adding on at Riviera or Cali we may have “enough” SAP without the OKW contract.

Sounds like you'll need to assess the need of the OKW contract as it sounds like you still may want to use it for SAP. I wouldn't consider the contract being stripped as much of an issue affecting how much it will sell for as the market really doesn't differentiate all that much between stripped and loaded (with respect to current rental rates). Meaning it might only be a different of like $5-10/point. Also, the longer the contract is held the more dues will need to be paid so factor that in as well as you think about waiting for the contract not to appear stripped, especially since OKW has some of the highest dues for resorts at WDW. So if selling is the goal, I'd still sell regardless of how many points are available on the contract.

Edit: added consideration of dues as well.

 

[DonMacGregor]

Is this negotiable? I ended up paying this on my resale purchase. I'm 99% sure anyway.

I've never heard of a buyer paying it.

 

[RoseGold]

I've never heard of a buyer paying it.

I mean I guess the buyer always pays it, because the points sell for more than private sale?

 

[DonMacGregor]

I mean I guess the buyer always pays it, because the points sell for more than private sale?

I mean I have never seen a resale contract where the buyer is specifically paying the $150 estoppel fee to Disney. When I have sold, I (the seller), had the $150 fee, plus the broker commission, taken out of the gross proceeds of the sale. @TheDailyMoo thinks they might have paid the estoppel fee as the buyer on a resale contract. As a resale buyer, it has never been in my itemized closing costs.

 

[Epcot Forever Forever]

I've never heard of a buyer paying it.

I believe in my sales contract it specifically called out that Florida law dictates the seller pays estoppel. You can get reimbursed I suppose but you’d need to pay estoppel no matter how you sold the contract.

 

[DonMacGregor]

I believe in my sales contract it specifically called out that Florida law dictates the seller pays estoppel. You can get reimbursed I suppose but you’d need to pay estoppel no matter how you sold the contract.

You might be right, but I do know that the seller is responsible for requesting it, in order for the buyer to be insured there are no HOA dues or other fees outstanding on the property. It wouldn't make any sense for me, as the buyer, to pay to make sure you, as the seller, have paid all of your fees and dues. Particularly if there are net proceeds from the sale that can be used to satisfy any arrears.

 

[Sandisw]

Disney was buying back right after Covid, when they had nothing to sell but RIV. The prices were an absolute joke to the point I don't know how they slept at night. Complete rip off. They sent off letters targeting particular resorts, and maybe even particular demographics. It was disgusting.

If she's worried about the fees, you can sell on Facebook. Call a reputable title company and get an estimate. The buyer pays those costs. If she's not in a hurry, you could find an educated buyer who is willing to buy this way. I almost did it.

EDIT: Not sure what you mean by "borrowed against it." If you mean borrowed points, you can still sell no problem.

iIRC, the letters that ownees received and the information shared with them when those who inquired admitted up front that that they could very well get more money on the resale market,

So, not sure what was wrong with it, They gave owners an offer for an easy out.

 

[Jwaire]

Disney was buying back right after Covid, when they had nothing to sell but RIV.

Now, now, they had plenty of AUL to sell along with RIV.