Direct vs Resale... are there some grey areas?

[MCDUDZ]

Thanks. When we bought, we figured we'd add on resale, but it just isn't worth the headache to me. The price point for CCV right now is still pretty high. I saw one for $182 pp I think. At that point, why bother?

OP: Sorry to hijack.

Yes, exactly. That’s why I think every scenario is different and research is so important.

 

[Deb & Bill]

In almost 22 years of ownership, our OKW dues have more than doubled. My guess is they will rise exponentially in the future.

 

[Disneychick75]

OP, when we first bought our points, I never thought about staying at different WDW DVC resorts. After a year though, we would book different resorts all the time. It was so much seeing and staying at different places with their vastly different themes. Sold our pts. a couple of years ago but are thinking about buying again.

 

[MCDUDZ]

I said 2057 contracts.

My apologies.

 

[ELMC]

Hello everyone! My husband and I have been contemplating becoming DVC members for some time now. I have researched purchasing direct vs resale and a lot of times I’ve found it’s mostly black and white. With the new resale restrictions, the main benefit of buying resale is the price per point difference from purchasing direct from Disney. That being said, we may have come across a grey area that we need some advice on...

Consider this example:

OKW Direct (Deed Exp 2057)
$155pp x 170 = $26,350 (purchase price)

OKW Resale (Deed Exp 2057)
$120pp x 170 = $20,400 (purchase price)

The difference in the purchase price over 38 years is $5,950 ($156.58 per year.)

Gaining the benefits of buying direct, the DVC annual pass discount would cover the additional cost of the purchase price over time. On the other hand, the majority of people suggest not to purchase direct for the perks as they are subject to change at anytime. If you consider this example, what would you do or what advise would you give us???

Thank you!!!

I'm also going to have to disagree a bit with the assumptions you've made. First, I think you are making a mistake when you amortize the difference in cost over the life of the contract. The difference is $5,950 right now. If you were allowed to pay it as $158.58 per year then it would be fair to look at it spread out over time. But since you're paying for it in today's dollars, it really makes sense to look at the price difference as a present day lump sum. Second, while OKW Extended contracts are harder to find, the current market value is only around $105-110. And that might be a little high. Remember, the majority of owners didn't pay a $15 premium when the extension option was originally offered (it was actually offered at $25 and then reduced). This article also spells out the current value of an extended contract quite well (about $6-9 premium).

https://www.dvcresalemarket.com/blog/the-value-of-an-old-key-west-extended-contract/

So my thinking is you should perform this analysis, but your resale purchase price assumption should be more in the $90-100 range. Try using those numbers and then make the determination as to whether or not the cost justifies the added expense. You may very well end up drawing the same conclusions. Good luck with your decision!

 

[MCDUDZ]

I'm also going to have to disagree a bit with the assumptions you've made. First, I think you are making a mistake when you amortize the difference in cost over the life of the contract. The difference is $5,950 right now. If you were allowed to pay it as $158.58 per year then it would be fair to look at it spread out over time. But since you're paying for it in today's dollars, it really makes sense to look at the price difference as a present day lump sum. Second, while OKW Extended contracts are harder to find, the current market value is only around $105-110. And that might be a little high. Remember, the majority of owners didn't pay a $15 premium when the extension option was originally offered (it was actually offered at $25 and then reduced). This article also spells out the current value of an extended contract quite well (about $6-9 premium).

https://www.dvcresalemarket.com/blog/the-value-of-an-old-key-west-extended-contract/

So my thinking is you should perform this analysis, but your resale purchase price assumption should be more in the $90-100 range. Try using those numbers and then make the determination as to whether or not the cost justifies the added expense. You may very well end up drawing the same conclusions. Good luck with your decision!

Thank you for your feedback

 

[kniquy]

I wanted to add a comment -- what will happen to the members and/or the resort when a good percentage of contracts expire in 2042? None of us know but this will be the only situation where a resort will have contracts expiring AND will still have members who will still have to pay MF for the resort beyond 2042. The other 2042 resorts BW, BC and BR will have all contracts expire at the same time.

Should the lingering members of OKW have anything to worry about? should this pose any concern not to buy an extended contract?