Disney to begin charging closing costs

[3DisneyKids]

I just got off the phone with my guide and she informed me that it was just announced today...

As of JULY 10, 2006 Disney will start to charge for closing costs. As most of you know, one advantage to buying from Disney directly (as opposed to a resale) is that you do not have to pay closing costs. This will soon change.

I have no idea if this is for new contracts only as well as add-ons, but it is definitely for new contracts. Also, I do not know what the closing costs will be, but my guide said that they would be "competitive."

So, for those on the fence about buying from Disney directly, now is the time...

How will this affect the resale market?

 

[Good Ol Gal]

This will be very interesting! If I had to pay for our closing costs then I might have gone via resale

After our initial contract and two add-ons, it sure would have added up.

 

[allflgirl]

This is what my guide said to me as well, just a couple of weeks ago. He didn't have an exact date but he was told it was coming.

I just put a bid in for a resale on SSR on Monday. I went resale because of the extra points, the contract was fully loaded and with the closing costs, I may still save $1,300; that's if I pass ROFR.

I too wonder how this will affect resales. My guess is that resale values will actually go higher, as the closing costs will no longer be factored into the total cost of the resale. That will be good for those who get in now before the July 10th deadline.

Julia

 

[dianeschlicht]

With Disney excersising ROFR so much lately, it probably is a moot point.

BTW, I think it is a way of raising revenu for them without making the price increase too unpalatable.

 

[corpcomp]

If the add - ons are also involving closing costs, I would probably go resale and negotiate in the future. The advantage of going DVC, which would be a bit of leverage to negotiate down, just disappeared.

 

[DrTomorrow]

While I agree with diane - it's usually more palatable to increase "fees" instead of per point costs - I still have to wonder what Disney's really up to. They have to know that this was a big plus for buying from Disney and that adding closing costs will make many more folk consider buying resale. Hmmm......

 

[Granny]

I agree, Dr T. It is perplexing.



Unless.....

....maybe their concept is to start charging closing costs, and part of their on-going "incentives" will be to waive closing costs if you purchase within XX days of taking the tour, etc.

In other words, increase the price in anticipation of making it part of an announced discount?

Hey, what can I say. It's not something that seems to make much sense.

 

[DaddyBrady]

....maybe their concept is to start charging closing costs, and part of their on-going "incentives" will be to waive closing costs if you purchase within XX days of taking the tour, etc.

In other words, increase the price in anticipation of making it part of an announced discount?

Sort of "the Disney giveth and the Disney taketh away."

 

[LIFERBABE]

I agree, Dr T. It is perplexing.



Unless.....

....maybe their concept is to start charging closing costs, and part of their on-going "incentives" will be to waive closing costs if you purchase within XX days of taking the tour, etc.

In other words, increase the price in anticipation of making it part of an announced discount?

Hey, what can I say. It's not something that seems to make much sense.

Granny! I think you got it!

Or what about waiving the closing costs only on the current selling DVC and if you want anything else, you have to pay closing. That would drive sales to SSR instead of BWV and BCV which already have an ample market of current owners.

Or they could offer less discounts by waiving closing instead.

Fees are money makers! Just look at the Credit Card companies.

I think DVC adding closing costs, will actually cause the cost of resale points to increase. Those costs will now need to be factored in for ROFR considerations, even though DVC has been absorbing these costs for years.

If BCV is $92 per point from DVC + 5ppt closing costs, if you bid on a resale for less than that, DVC can excersie ROFR, knowing they will pocket that $5 when they sell it off to existing members. It's a kickback.

 

[Paging Tom Morrow]

I wonder if Disney will mandate that you close through them? Usually when purchasing a property, the buyer has the choice of which closing company to use. Seems to me this is a way to "incent" people to purchase larger point level at the onset of their membership.

 

[vbalacek]

Does anyone know whether this will be applied for people "currently" on the wait list? I understand price increases will not hit them; what about closing cost increases?

If so, I may need to rethink my decision to wait it out for a BCV add-on, and instead try and get something available before the price/closing cost increase!

 

[Chuck S]

I wonder if Disney will mandate that you close through them? Usually when purchasing a property, the buyer has the choice of which closing company to use. Seems to me this is a way to "incent" people to purchase larger point level at the onset of their membership.

Interesting thought. That may be a side effect of charging closing costs, but if that were the primary goal Disney could simply raise the current minimum buy-in from 150 points. The original buy in was 230, then 210, 190 and the current 150.

 

[lisaviolet]

I just got off the phone with my guide and she informed me that it was just announced today...

As of JULY 10, 2006 Disney will start to charge for closing costs. As most of you know, one advantage to buying from Disney directly (as opposed to a resale) is that you do not have to pay closing costs. This will soon change.

I have no idea if this is for new contracts only as well as add-ons, but it is definitely for new contracts. Also, I do not know what the closing costs will be, but my guide said that they would be "competitive."

So, for those on the fence about buying from Disney directly, now is the time...

How will this affect the resale market?

Thank you for posting this information.....

Wow.

 

[DrTomorrow]

[...]....maybe their concept is to start charging closing costs, and part of their on-going "incentives" will be to waive closing costs if you purchase within XX days of taking the tour, etc.

In other words, increase the price in anticipation of making it part of an announced discount?

Hey, what can I say. It's not something that seems to make much sense.

Or what about waiving the closing costs only on the current selling DVC and if you want anything else, you have to pay closing. That would drive sales to SSR instead of BWV and BCV which already have an ample market of current owners.

This makes sense: add on a fee that can be waived to encourage certain behavior ["Yes, ma'am, we are selling both SSR and VCR, but if you purchase at SSR, we'll waive the closing costs"]

Plus, DVC purchasers are probably aware that closing costs are a part of a real estate purchase, so they will be seen as one of those "unavoidable" fees....

 

[Scotch]

Marriott Vacation Club has always, or at least since our dealings with the company back in 1999, charged closing costs for both new developer weeks and resale weeks purchased from them. I seem to recall the closing cost varied slighly, from approximately $300 to $400, with price including title insurance (which I always thought was silly when we were purchasing a "new" week directly from the developer).

 

[Anewman]

It would also disscourage multiple small contract purchases over one large contract.

We are considering adding on 390 points, but we plan on buying three contracts of 130 points each. This way they are smaller contracts incase we ever decide to sell any AND we would get 6 free APs(current offer). But if we had to pay for closing costs on 3 contracts it would spoil the whole deal.

It would also encourage LARGER buyins period. Many new members start off with the minimum with the plan of adding on later. Well that strategy would now cost a few hundred bucks.

 

[Granny]

Anewman....I thought of this same thing last night. (Yes, it's sad that I'm thinking about DVC even when not on these boards! )

I agree...it will definitely discourage the multi contract approach. Plus those who want to "start small" and maybe add-on as time passes will have to rethink that concept. Interesting that could actually keep some people from buying in but would probably be a net revenue increase overall even with the "lost sales" figured into it.

I can't imagine them charging a significant fee and still expecting a lot of 25 or 50 point add-ons like they do now. Time will tell.

 

[NJOYURLIFE]

But, by discouraging those small add ons, they are also discouraging the sale of those small add ons later on. Which I honestly think disney wants to eliminate those small contracts from getting into the hands of non members. I can see their point due to the administrative paperwork on them.

We personally are going to have to rethink our strategy because we just purchased a 25 point contract and our plan was to add on in increments of 25 or 50 based on cash available so as not to finance a 150 points at once. I had also figured that with 3 children it would have been easier to leave them each a 50 point contract rather than to share one 150 point contract.

Although they way they have been fighting lately I told them that if they want out timeshares they are going to have vacation together each year. I was only joking with them, because I doubt if that would be feasible, but I do hope they continue making memories together long after we are not around. So maybe the sharing of one contract would work....

 

[jacejace]

i am planning on joining dvc but wasnt sure if a better deal was going to come up later. i guess now is a good time!

 

[lenshanem]

I was told this, too... I'm so glad we just got our VWL small add on points (3 weeks on waitlist) the other day. We got the $92 price (about to be $95) and no closing costs. This will definitely make smaller contracts not as attractive, but ya know - if I had to pay the closing costs I probably just wouldn't have even bothered.