You call MS and they will see if there is availability. You will pay a $95 exchange fee. If you make any changes later you will pay another $95 fee. It's really restrictive. It is dependent on availability and if I recall correctly has to be booked at least 2 days ahead of check in, maybe a little longer, but might not be availability that late anyway. You also have the rule of 4 so it cannot be booked if you are in the last 4 months of your UY. However you can book earlier and the stay itself can be in the last 4 months of your UY. I think if Disney is booking the rooms then you can probably reserve on points thru DVC too.
Also, if your points were purchased resale after 3/21/2011, they can't be used for Disney Collection reservations.
Personally, I'd rent out the points you want to use on the cash room and just book it through the Disney site. I bet it'll be a LOT cheaper in the long run. You can qualify for any of the discount rates (if they're offering them when you travel) and you won't have to pay the extra $95 fee for exchange.
I would have to familiarize myself with how that works. Sounds like a good idea. Thank you!
I am wanting Beach Club next March spring break and I am thinking that I wouldn't get a one bedroom at the 7 month mark. I would take a Beach Club hotel room though, I just would have to pay cash (or use points for a few nights).
I'd rent the points and book a room on cash in that instance - almost without question. I'd compare the cost difference but without comparing I think you'll be better off.