Do you usually pay for maintenance on a Resale?

[Rocknfamily]

I am a first time buyer for DVC, looking at purchasing a resale through a broker, and the one thing I was curious about was the statement by them that it is customary to repay the maintenance fee. The contract has a use month of August and those points are available. I just had not read anything on the boards about this.

This is the quote from his email:

"Reimbursement of 2011 maintenance/taxes – approx. $****.**"

Is this the standard that is out there or is this something that is negotiated out?

As this is my first post as I am not a current DVC member, and am a little nervous about the purchase, I wanted to make sure I was making the right decision.

Thanks for your help.

 

[Deb & Bill]

Since you are getting all the points for the year, you probably should pay all the dues for the year.

 

[DebbieB]

I am a first time buyer for DVC, looking at purchasing a resale through a broker, and the one thing I was curious about was the statement by them that it is customary to repay the maintenance fee. The contract has a use month of August and those points are available. I just had not read anything on the boards about this.

This is the quote from his email:

"Reimbursement of 2011 maintenance/taxes – approx. $****.**"

Is this the standard that is out there or is this something that is negotiated out?

As this is my first post as I am not a current DVC member, and am a little nervous about the purchase, I wanted to make sure I was making the right decision.

Thanks for your help.

It is negotiable depending on what points you are getting. If you are getting some 2010 points, you should definitely pay the 2011 dues. If you are not getting all of the 2011, then I would offer to split the dues.

 

[Buckeye Fan]

I've purchased 4 resale contracts, and it depends on how motivated the seller is. The price per point and maintenance fees are all negotiable. I purchased one of my contracts, fully loaded with previous year's and current year's points and didn't pay maintenance fees until the following year.

I have found that people who have smaller contracts are a little less willing to negotiate. Their overall margin is smaller, and there's more demand due to the lower purchase price and ease of selling. In years past, I would have told you to be careful on negotiating too low, because even if the seller was willing to accept the offer, Disney would have almost certainly bought it back. While that's still a risk, it seems to be a remote risk based on buy-back patterns of the last 12 - 18 months (take a look at the "Right of First Refusal" thread). With the 3/20 date looming, I'm not sure how Disney will react to low-ball offers. Time will tell.

Best of luck with your potential purchase!

 

[Marleen2]

I purchased one of my contracts, fully loaded with previous year's and current year's points and didn't pay maintenance fees until the following year.

Just a thought: Maybe in your contract, the maintenance fee of the previous and current year were included in the purchase price, so the price per point was higher???

 

[Buckeye Fan]

Just a thought: Maybe in your contract, the maintenance fee of the previous and current year were included in the purchase price, so the price per point was higher???

Nope. Highly motived seller. The seller actually had listed it really low when it was posted. When I first saw it, I thought it was a mistake on the broker's part. I honestly thought Disney would buy it back (and was pretty much told so by folks on the boards) because the contract was priced about $15 lower per point than the average price at the time, and the owner was picking up all fees. Just happened to work out that Disney didn't exercise ROFR.

 

[JimMIA]

Technically, dues don't have anything to do with points. Dues (AKA: maintenance fees) are the expenses of operating your home resort for the calendar year, not the duration of your points validity.

In fact, if you buy directly from Disney, they prorate the dues based on the length of time left in the calendar year. If you bought direct right now, Disney would charge you about 10 months worth of dues for the remainder of 2011, which is actually the correct bean-counter way of apportioning dues.

However, traditionally in resale, dues tend to be viewed relative to the points you are receiving. For example, we're in 2011 -- if you would be receiving a full allotment of 2011 points (even if the UY is December) most of the time, you'll expect to pay all of the dues because you're getting the full allotment of points.

If there are 2010 points also available (especially if there are a bunch of 2010 points), that's a much nicer contract and the seller might be pretty firm on both price and dues. And, of course, you would have full access to both 2010 and 2011 points because you can bank/borrow them.

If some of the 2011 points have already been used (especially if it's a bunch), the seller may be more flexible.

But as others have said, everything is negotiable in a resale.

 

[JimMIA]

The banking aspect of a contract is something else to look at when evaluating a resale if there are current year points available. There are two dates that are relevant -- the date by which you feel assured of being closed and "in the system," meaning you can make reservations, and the banking deadline for your points.

The usual guideline is about 8 weeks between making an offer and being able to actually close and use the account -- which, if you buy today, puts you in late April.

DVC owners can bank our points at any time in the first 8 months of our UY, which means if a contract has a June UY, the banking deadline for 2010 points passed on January 31. In other words, June 2010 points cannot be banked and would expire on May 31, 2011 if you are not able to use them.

A contract with a Sept UY would reach its banking deadline on April 30, so if you're buying a Sept UY, you might want to ask the seller to go ahead and bank the points for you.

For October and December 2010 points and all 2011 points, you should have plenty of time to bank.

 

[Sandisw]

Technically, dues don't have anything to do with points. Dues (AKA: maintenance fees) are the expenses of operating your home resort for the calendar year, not the duration of your points validity.

In fact, if you buy directly from Disney, they prorate the dues based on the length of time left in the calendar year. If you bought direct right now, Disney would charge you about 10 months worth of dues for the remainder of 2011, which is actually the correct bean-counter way of apportioning dues.

However, traditionally in resale, dues tend to be viewed relative to the points you are receiving. For example, we're in 2011 -- if you would be receiving a full allotment of 2011 points (even if the UY is December) most of the time, you'll expect to pay all of the dues because you're getting the full allotment of points.

If there are 2010 points also available (especially if there are a bunch of 2010 points), that's a much nicer contract and the seller might be pretty firm on both price and dues. And, of course, you would have full access to both 2010 and 2011 points because you can bank/borrow them.

If some of the 2011 points have already been used (especially if it's a bunch), the seller may be more flexible.

But as others have said, everything is negotiable in a resale.

This is how I would approach it as a resale buyer. Paying based on when you own the contract and not necessarily if you have the points for that UY.

If I was buying a contract in August, for example, even if all 2011 UY points were available, I would only offer to reimburse MF's for 5 months. Now, I realize that the seller may decline, but since MF's are based on calendar year and not UY, I think that is fair.

Of course, if a contract was stripped, then I would have to adjust my price per point to account for having to pay MF's for owning a contract I could not yet use.

But, as mentioned, everything is fully negotiable with resale and you never know what a seller might be interested in accepting.

 

[heynowirv]

Sandi ,
That's a great point about MF year Vs. UY. MF's are a calender year, no matter when your UY begins. I forgot about that .

 

[letitsnow]

As part of our offer we asked the sellers to pay for the MF. They agreed and then it was put in our contract. It looks like alot of sellers sell because they do not want to pay for the mf for the current year so that may be why they are selling.

 

[Marleen2]

Nope. Highly motived seller. The seller actually had listed it really low when it was posted. When I first saw it, I thought it was a mistake on the broker's part. I honestly thought Disney would buy it back (and was pretty much told so by folks on the boards) because the contract was priced about $15 lower per point than the average price at the time, and the owner was picking up all fees. Just happened to work out that Disney didn't exercise ROFR.

WOW! You were really lucky then! Good for you!

 

[tecodis]

Nope. Highly motived seller. The seller actually had listed it really low when it was posted. When I first saw it, I thought it was a mistake on the broker's part. I honestly thought Disney would buy it back (and was pretty much told so by folks on the boards) because the contract was priced about $15 lower per point than the average price at the time, and the owner was picking up all fees. Just happened to work out that Disney didn't exercise ROFR.

Maybe Disney has lowered it's ROFR level to account for their change in policy regarding resales. In theory, resales will be worth less so it would make sense that they would consider lowering their normal ROFR price.

 

[Dean]

The Neutral approach is to use the same procedures that DVC would use on a retail sale. However, most resale agents take the position (incorrectly IMO) that you get the points you pay the dues. Overall you've go to decide what's important to you and you should look at the overall package to decide what's a good deal and what's not. However, I'd say that overpaying on dues can turn a good deal into an OK one and an OK one into a poor deal.

 

[Buckeye Fan]

Maybe Disney has lowered it's ROFR level to account for their change in policy regarding resales. In theory, resales will be worth less so it would make sense that they would consider lowering their normal ROFR price.

Completely agree. Prior to our purchase, Disney was actually buying back contracts here and there. When we purchased, I think two things were in play. First, it was a Vero contract, and I think Disney has always been a little more laxed with the price. Second, I think we were right on the cusp of when Disney started relaxing their first refusal rights. Today, fair market value for that same contract is about $10 - $15 less than what I paid, but at the time, I got a really great deal and helped the seller out as well.

 

[staceymay00]

We closed on an Oct UY contract in April 2010. We got all 2009 points with time to use them or bank them, but we were not requested to reimburse the owner for those MFs. We did, however, have the 2010 fees added to our total cost. We could have negotiated this, but we chose not to.

 

[bobbiwoz]

In 3 resales we did not pay for the MF's for the banked points. In another of the transactions, the seller did want us to pay MF's for the 3 points we asked to have banked, so we did.