DVC direct buyers

[nunzia]

The way I look at it is that the amount we saved by buying resale vs direct will "pay for" our maintenance fees for the next 7 to 9 years (depending on annual dues increase). If we should have to sell (which I really hope does not happen but one never knows in life) we will take less of a loss than those who buy direct.

I wonder what the Guides at Disney tell prospective buyers about the resale value of their potential investment. Seems to me that Disney is doing themselves a disservice by differentiating between resale and direct. I would be more inclined to buy Direct if I could be more confident in a strong after sales market where I would not to lose too much in the event I would later have to sell.

That is a good point and one I would like answered as well, as I had no problems with resale and direct being exactly equal, and I can only guess that Disney doesn't care about resale values at all..super low and they can ROFR if they wish, and if not, oh well....someone is still responsible for those dues.

Yes..if you get a GREAT deal, stay only at WDW and don't care what resort you get, then by all means by the cheapest resale you can find as I would. My point was that I ONLY wanted VGC, I bought when it first opened at a good price (under $100..I think it was close to 97 on average for my 4 contracts), so far resales are hovering close to that and they HAVE ROFR contracts to fulfill those on the direct purchase waiting list. I paid about 22K for all this, no closing costs (direct at the time didn't a have closing costs). This year I paid about $960 in MF about $100 more than last year..so if I keep my contract all 50 years...well..that is one HUGE number. But bottom line..there are good reasons for both arguments and like everything else, really depends on the person and their circumstances.

 

[disneynutz]

The way I look at it is that the amount we saved by buying resale vs direct will "pay for" our maintenance fees for the next 7 to 9 years (depending on annual dues increase). If we should have to sell (which I really hope does not happen but one never knows in life) we will take less of a loss than those who buy direct.

I wonder what the Guides at Disney tell prospective buyers about the resale value of their potential investment. Seems to me that Disney is doing themselves a disservice by differentiating between resale and direct. I would be more inclined to buy Direct if I could be more confident in a strong after sales market where I would not to lose too much in the event I would later have to sell.

Disney DVD has a didn't ask, don't tell policy. If a buyer doesn't ask the question, the Guides will never discuss it.

Bill

 

[JimMIA]

I wonder what the Guides at Disney tell prospective buyers about the resale value of their potential investment.

A few years ago, they used to talk about the resale value and how it would hold up because Disney would ROFR prices that were too low. And there was some truth to that. In fact, many people who bought in the early-mid 90's actually made profits when they sold their DVCs...which, of course, the DVC timeshare salesmen were only too happy to point out.

All of that, of course, falls under the category of representations about the product which are not legally binding because they were not in the purchasing documents, POS, etc, that the buyers received. And therefore, DVD is not responsible for whatever the prospective buyer thinks they might have heard.

Today, I suspect they focus more on what the purchaser actually, or potentially, gets for their points -- DVC, the collections, and "500 Kingdoms" through RCI. When they talk about resale today, they probably just tell the buyers how limited their resale points will be.

And who wants to be prohibited from using your points for ridiculously overpriced options?

 

[JimMIA]

Seems to me that Disney is doing themselves a disservice by differentiating between resale and direct. I would be more inclined to buy Direct if I could be more confident in a strong after sales market where I would not to lose too much in the event I would later have to sell.

Disney is not hurting themselves with the resale restrictions. On the contrary, the restrictions give them a selling point to answer the big price differences between direct and resale.

They are doing a disservice to direct buyers, but DVD is not hurt because they're essentially selling in a vacuum. Most direct purchasers are not DISers, and have no idea a resale market even exists -- much less what the price differentials are. They're in a total information black hole, knowing only what the timeshare salesman tells them.

In addition, there is a subset (and I suspect it's not a small subset) of direct buyers who know about resale, but don't realize if they're buying BLT or AKV that their holdings drop $40-$60 per point the second they close. They know they can buy lower, but they don't connect the dots to realize that as soon as they close, their points are valued at the resale prices...specifically because DVD devalued them that way.

For the savvy consumer, I agree with Dean and others that DVD actually did resale buyers a favor by imposing restrictions on options that were ugly on their best day. Now the resale buyer can focus on the REAL value of DVC...not sales weasel-speak.

 

[taaren]

We bought direct in 2009, and since we bought into BLT, yes we would do it all over again. Why? Because resales of BLT, in most cases, are still selling for more than what we paid. We bought BLT after the first ever webcast and paid $92 PP.

That being said, I think if I had to buy now, I would probably go resale. Right now, we don't have any intention of using the points for anything other than DVC resorts, unless we sell the points.

Same here (almost). We bought in direct for $96 per point to VGC. Then we added on via resale for $82 per point when there were no contracts available direct. Currently since they're ROFR'ing VGC for the waiting list, contracts are again going for the $90's, so it wouldn't be worth the price difference to me to not go direct (though I wouldn't pay the $120-130 per point they're currently charging).

If they have a good deal on the DLH Villas, whenever they get around to building those, I might buy direct again. Or I might wait a few years and buy resale if the price is outrageous.

 

[dcfromva]

We own at 5 resorts and all purchases were made direct from Disney.
Our first purchase was 10 years ago and there wasn't a great deal of price difference between direct and resale. At the time we first bought, DVC was 10 years old and the resale values were quite good.

We wouldn't have purchased direct if the resales had been priced 30-40% less. While we did buy SSR points with the Disney Collection in mind (to use at DL and GC). We would not have paid a 40% premium in order to do this.

When we purchased, I expected two things: 1) the resale price of the contract would go down--after all, these contracts do expire. 2) we are probably going to sell at some point in the future--(some of our points will expire when we are over 100 yrs old. )

Now, whether you buy from Disney direct or you buy a resale, the benefits do not convey if you should decide you need to sell in the future. The only difference is the person who bought direct is going to see the value of the contract take an immediate 30-40% drop the day after it is signed and may not ever be able to recoup if the contract is sold in the future. (It would have made a cash reservation a whole lot cheaper.)

 

[ajseagles3]

I probably didn't explain it very well, but I see two possible scenarios

1. A situation where they could choose to change non-contractual things for ALL resale points, including those currently owned. There is precious little in DVC that we are contracturally guaranteed.
2. A situation where they elected to change something for ALL owners, including both current and future direct purchasers.

I'm not a legal expert, so I don't know about the specific laws.

But I agree with Charles that Disney's PR folks would laugh at that "nightmare." It would just be another "enhancement to the ownership experience based on member feedback."

The former of your two scenarios would be an egregious and unprecedented display of contractual manipulation. I cannot imagine that retroactively increasing limitations on ALL resale interests would be feasible at all. However, they could certainly do it the same way they did previously.

But as you and others have mentioned, they would be doing prospective resale buyers a potential favor by taking off more of what they don't want, allowing them to pay even less for what they do want. Of course, reducing the value of resale interests as of a certain date universally puts the screws to one group of people: all current DVC owners.

 

[BirdsOfPreyDave]

The former of your two scenarios would be an egregious and unprecedented display of contractual manipulation. I cannot imagine that retroactively increasing limitations on ALL resale interests would be feasible at all.

There's a great deal of difference between what's specifically guaranteed in the contract and what the sales presentations describe. An "egregious and unprecedented display of contractual manipulation" would only apply if the changes were to something specifically guaranteed by the contract.

These black & white contractual "guarantees" aren't very extensive, and basically boil down to a guaranteed ability to book a reservation at your home resort, and a guarantee to have some period of home resort booking priority. Anything else we currently enjoy above and beyond that should be considered an added benefit that can be changed at Disney's discretion. The RCI, Disney Collection, Adventure Collection, and/or Concierge Collection benefits could all disappear for either all members or for some sub-set of members Disney chooses to designate (such as resale owners). They could also make changes to have different booking windows for direct and resale owners. They could even restrict bookings at non-home DVC resorts.

When they made the last change, they decided to grandfather in members who had bought their resale contracts prior to a cutoff date. That was solely at their discretion, too. I can remember having a lot of angst in the months between the initial rumors of the changes and the eventual release of the actual policy. It could have gone either way as to whether our existing resale would be subject to restrictions or not.

 

[disneynutz]

I have talked to a couple of different DVD people who tell me that Disney is taking a hard stance with non-DVD resales. The resale buyer Member cruise restriction even when paying cash is just the first of many that we may see. Disney feels that non-DVD resales as taking money from the Mouse.

One thing that they wouldn't or couldn't answer is why are the contracts that Disney turns over to Fidelity not grandfathered in as a direct buy?

Bill

 

[bakerworld]

That is a good point and one I would like answered as well, as I had no problems with resale and direct being exactly equal, and I can only guess that Disney doesn't care about resale values at all..super low and they can ROFR if they wish, and if not, oh well....someone is still responsible for those dues.

Yes..if you get a GREAT deal, stay only at WDW and don't care what resort you get, then by all means by the cheapest resale you can find as I would. My point was that I ONLY wanted VGC, I bought when it first opened at a good price (under $100..I think it was close to 97 on average for my 4 contracts), so far resales are hovering close to that and they HAVE ROFR contracts to fulfill those on the direct purchase waiting list. I paid about 22K for all this, no closing costs (direct at the time didn't a have closing costs). This year I paid about $960 in MF about $100 more than last year..so if I keep my contract all 50 years...well..that is one HUGE number. But bottom line..there are good reasons for both arguments and like everything else, really depends on the person and their circumstances.

We asked the guide before buying about the resale market. She recommended Fidelity but she said flat out that selling our pts would be a loss and if were planning to do that anytime in the next 10 years not to buy.

 

[JimMIA]

The former of your two scenarios would be an egregious and unprecedented display of contractual manipulation. I cannot imagine that retroactively increasing limitations on ALL resale interests would be feasible at all.

How does changing something that's NOT in the contract constitute "contractual manipulation???"

Just for the sake of debate, let's say they announced the following:

"Effective at Midnight tonight, points purchased directly from DVD will be eligible for booking reservations at their home resort at 13 months, and at non-home resorts at 9 months."

Show me the contract issue there. There is none.

However, they could certainly do it the same way they did previously.

Could, yes. And probably would. But they don't have to.

 

[disneynutz]

We asked the guide before buying about the resale market. She recommended Fidelity but she said flat out that selling our pts would be a loss and if were planning to do that anytime in the next 10 years not to buy.

She recommended Fidelity because Disney sends Fidelity contracts to sell on their behalf. I would think that she should have disclosed this to you.

Bill

 

[valeriekc]

When I consider we bought in at BWV over 13 years ago and paid $59.00 -65.00 per point I think we are probably okay.
We did buy direct on our 1st contract and the add-ons were direct as well.

At our 1st. buy in we didn't know anything about the resale market, but did on the (2) subsequent add-on contracts.

At our 1st. and 2nd. contract there really wasn't any inventory in the resale markets at the wildly popular Boardwalk Villas, and at the time of the 3rd. add-on the pickings were still slim.

We have used our points at BWV (obviously) Beach Club, Yacht Club, Polynesian, Contemporary, Beach Club Villas, Kidani Village, Grand Californian, the Disney Cruise and upcoming at Aulani.

We have been fortunate enough to not finance any of our contracts and didn't have to pay any closing costs at that time as well. We have never traded outside of Disney for our usage and have never rented or sold any points.

So really my post is to illustrate how we have utilized our DVC ownership over the years and we have always felt (and still do) it has been a good investment.
And even though we aren't constrained by any of the restrictions they wouldn't have affected us.

We have found over the years that we truly prefer to stay at a place that is as nice & comfortable as our home (within reason) when on vacation.

 

[ajseagles3]

How does changing something that's NOT
Could, yes. And probably would. But they don't have to.

My stance is simple. The chance that DVD would change the contractual terms to further distance direct purchases from resale purchases is real. But if they did so, they would 100% certainly do it as they did it the last time - setting a point in time in the future to enact the change on resale transactions.

I simply contend that the combination of legal/contractual and public relations issues and headaches are too great for DVD to even CONSIDER differentiating the contract terms for EXISTING members between direct buyers and resale buyers retroactively. Furthermore, I believe that perpetuating the thinking that it is possible diminishes the value of ownership for every single DVC member.

But of course.... I certainly do agree that they could make a slew of blanket changes for ALL existing members to reduce/change perks or trade options at any time... So regardless of your line of thinking, we agree that purchasing DVC with the intent of using it for all those bells and whistles doesn't make much sense. It only offers value over paying-as-you-go if you use your points to stay at a DVC resort.

I would love if someone with legal expertise would weigh in here, but in lieu of that... We're just going to have to agree to disagree.

 

[JimMIA]

My stance is simple. The chance that DVD would change the contractual terms to further distance direct purchases from resale purchases is real.

I don't think we disagree on the possibility that Disney could decide to further differentiate direct from resale.

Where I think we disagree is what you call "contractural terms." You seem to believe that all existing features of DVC ownership are "contractual," but in fact, very few aspects of DVC ownership are protected by contract.

For example, NONE of the changes made on March 20 had anything to do with the contract between DVD/DVC and owners. As a matter of fact, DVC was quite clear in their announcements that NONE of the changes involved ownership interests under the contract.

Basically, the only thing DVC owners are guaranteed by contract are:

• the ability to book at their home resorts for the term of the contract (which ranges from 2042-2060)...subject to availability
  
  
• and, as long as the owner's home resort is a part of the "Club" and the club permits non-home-resort use of points, owners are guaranteed at least a one-month booking advantage over non-home resort owners.
  
  There are two "outs" in that last sentence. DVC could remove a resort from the "Club," or they could decide to discontinue non-home booking. NEITHER of those are guaranteed by contract.
  

The example I gave above of changing the reservation booking rules would not violate either of those contract provisions.

But if they did so, they would 100% certainly do it as they did it the last time - setting a point in time in the future to enact the change on resale transactions.

You assume that as a given, presumably because of the owner discontent/PR issues which might flow from doing things a different way. I don't take that as a given.

I think Disney will do whatever best serves their interests. They renegotiated the valet parking contract, and DVC owners who parked their cars at night secure in the knowledge that valet parking was a free perk of ownership found that they owed $10 in the morning. They could have required a grace period so they could give affected guests a heads-up -- they CHOSE not to. They also implemented points reallocations with no notice. They also cut off cruise bookings for almost a year without notice.

Were owners upset? Yep.
Were owners inconvenienced? Yep.
Did the sky fall? No.

In the future, I think Disney will handle changes in their best interests. Most of the time, that will mean implementing change as gently and smoothly as possible...like they did in March.

But they don't HAVE to, and whenever their interests are better served, they'll go another route.

 

[CarolMN]

......(snip)........Just for the sake of debate, let's say they announced the following:

"Effective at Midnight tonight, points purchased directly from DVD will be eligible for booking reservations at their home resort at 13 months, and at non-home resorts at 9 months."

Show me the contract issue there. There is none.
Could, yes. And probably would. But they don't have to.

.....(snip).......Basically, the only thing DVC owners are guaranteed by contract are:

• the ability to book at their home resorts for the term of the contract (which ranges from 2042-2060)...subject to availability
  
  
• and, as long as the owner's home resort is a part of the "Club" and the club permits non-home-resort use of points, owners are guaranteed at least a one-month booking advantage over non-home resort owners.
  
  There are two "outs" in that last sentence. DVC could remove a resort from the "Club," or they could decide to discontinue non-home booking. NEITHER of those are guaranteed by contract.
  

The example I gave above of changing the reservation booking rules would not violate either of those contract provisions..........

I respectfully disagree that Disney could legally institute different home resort booking windows for direct and resale contract points for the existing SOLD OUT resorts.

I agree that all we are guaranteed is at least a 1 month booking advantage at our home resort (when the resort is part of the club), but no where does the contract allow Disney to have separate rules for booking intervals depending on how you acquired the contract. IMO, that's a basic part of what we purchased, unlike the perks & exchange programs that are specifically NOT guaranteed to continue for anyone.

Disclaimer: I am not a lawyer.

 

[bakerworld]

She recommended Fidelity because Disney sends Fidelity contracts to sell on their behalf. I would think that she should have disclosed this to you.

Bill

She might have - I can't remember - I remember more her seeming 'uncomfortable' about it and maybe that was why

 

[JimMIA]

I respectfully disagree that Disney could legally institute different home resort booking windows for direct and resale contract points for the existing SOLD OUT resorts.

I agree that all we are guaranteed is at least a 1 month booking advantage at our home resort (when the resort is part of the club), but no where does the contract allow Disney to have separate rules for booking intervals depending on how you acquired the contract. IMO, that's a basic part of what we purchased, unlike the perks & exchange programs that are specifically NOT guaranteed to continue for anyone.

Disclaimer: I am not a lawyer.

I'm not a lawyer either, Carol, as you know.

However, the contract doesn't say DVC can eliminate DCL, or ABD, or anything else based on how someone purchased either. The key thing is the contract (POS and other relevant documents) does NOT say what DVD/DVC can't do. They obviously have a great deal of latitude in making changes in the administration of the program, as we've seen repeatedly.

The reason I chose those specific examples is that they ARE done by other timeshare systems, headquartered in Florida and operating under Florida law.

For example, a Wyndham owner with a certain level of point ownership purchased direct from Wyndham can book at any Wyndham resort at the home-resort booking date. No matter where they actually own, they have 13 month booking everywhere. They also get automatic upgrades to larger suites and greatly expanded banking privileges (called "credit pooling" in the Wyndham system) and significant reductions in points costs later in the booking period. I'm not sure what the number is, but I think the highest level of ownership pays HALF the points I pay for reservations made 60 days or less out (very doable with Wyndham most of the time). So such a structure is clearly legal.

When anyone discusses "tiered benefits" -- supposedly coming from DVC to "enhance the ownership experience in response to member feedback" that is precisely the type of differentiation they are talking about.

In the Wyndham system, that kind of preference really doesn't matter except in rare situations -- but in DVC, those would be very valuable perks for "Premier" owners to have...and would work to the detriment for everyone else.

Obviously, there is a difference between what any timeshare company could do and what they actually do -- and DVC is more owner-oriented than most timeshare companies. But I don't see any bar to them making the kind of changes I talked about.

There are lots of folks here who are more knowledgeable than I, including some lawyers, but I think DVC could do the kinds of things I mentioned...IF they wanted to.

 

[amypetecar]

Buying direct made sense up to 2 years ago, but doesn't anymore.

I bought direct in April of 2010 because:
-I wanted BLT. retail was $112 pp/ and resale was over $100 at the time
-MS was able to secure me a reservation at 7 months for a planned trip over thanksgiving. By the time I bought resale, there would have been no guarentee of getting that reservation. That would have cost me $2K+ in cash if I couldn't book on points
-I purchased literally 1 week after they dropped the 160 point minimum for BLT, thus making it affordable. Nothing on resale would have been under 160 at the time

However........ if I were in a postion to purchase another contract, I would LOVE to grab a 150pt contract I see going for $45 per point at some resorts. Such a value!

 

[spacepoints]

So let me ask a stupid question. And I am sure that this has been answered many many times before, and I am sorry for that. When you buy resale, TODAY, what all is limited?

My understanding is that you cannot use points to book Disney Collection (who would want to anyway IMO....not worth the points). Nor the adventure collection or signature collection.

Could you still use the resale points for an RCI exchange?

Am I missing anything else?

Again, sorry for asking something that I am sure is already covered, but thank you in advance.