DVC prices going lower

[lapeter]

I have been watching the BWV resale prices lately and it seems that the asking prices are going lower. I am seeing a lot of 100-150 pt. contracts asking $77 to $80. It must be the economy. I am thinking of adding on. Also has ROFR by Disney been quiet recently?

 

[5forDiz]

Don't know if you have, but if not take a look at this thread ( most recently updated by Donald is #1 on 10/18/08; post #110 ) - could be helpful :

http://www.disboards.com/showthread.php?t=1960185&page=8

 

[troynkasey]

I can't help but wonder if the economy is effecting some who bought into DVC and it may drive the price of resales down some. Too much supply and not enough demand will drive the price down unless Disney buys back the property with ROFR.

 

[disneynutz]

I can't help but wonder if the economy is effecting some who bought into DVC and it may drive the price of resales down some. Too much supply and not enough demand will drive the price down unless Disney buys back the property with ROFR.

You can stop wondering... YES, it's affecting a lot of people. The number of DVC resales have increase dramatically and the prices have decreased as expected. I also expect to see a marked increase in DVC foreclosures next year.

 

[jcanary]

Is there a website where you can see if there are any foreclosures for the DVC?

 

[disneynutz]

Is there a website where you can see if there are any foreclosures for the DVC?

The foreclosures go back to Disney. They are only available for Disney to resell. The foreclosure fillings are viewable on the Orange County FL website and they are a good indication of the economy and possible price adjustments by DVD.

 

[LadyKay]

I saw one SSR contract today @ 67$/point.
Flame me, I can take it, I have broad shoulders and have been there before!

 

[mel&me]

The economy has some more to drop yet, We have not seen the bottom. As it gets worse you will see more and more resales and forcloseures. The points will go a little lower. That's just my opinion.

 

[carlbarry]

Yes, indeed, Black Friday will be very interesting this year--in a train wreck sort of way. I really fear that sales will be horrendous, greasing the skids even more. The only up side is, I hope to join DVC at a bargain rate. But I would still rather have a booming economy.

 

[tjkraz]

The foreclosures go back to Disney. They are only available for Disney to resell. The foreclosure fillings are viewable on the Orange County FL website and they are a good indication of the economy and possible price adjustments by DVD.

Actually it's a little more complicated than that.

Foreclosed contracts are put up for public auction. The auction date, time and location are specified in the judgment. In order to truly reclaim the property, Disney would have to be the high bidder. That's not a given. In fact, I understand that The Timeshare Store is known for picking up contracts at the auction and listing them with along with their resales available.

The auction proceeds are then applied to the amount of the judgment and the defendant remains on the hook for any remaining portion of the debt.

 

[Rileygirl]

Actually it's a little more complicated than that.

Foreclosed contracts are put up for public auction. The auction date, time and location are specified in the judgment. In order to truly reclaim the property, Disney would have to be the high bidder. That's not a given. In fact, I understand that The Timeshare Store is known for picking up contracts at the auction and listing them with along with their resales available.

The auction proceeds are then applied to the amount of the judgment and the defendant remains on the hook for any remaining portion of the debt.

Wow

You learn something new everyday. Thanks tjkraz!

 

[mel&me]

I did not know that either. I thought Disney just got back all the foreclosures.

 

[ClarabelleCow]

Everything is going to be lower, prices are way over inflated. It was a great run, but reality is setting in. Heck, futures have been halted this morning after being down 500 points!!! THATS FUTURES!! Not after the opening bell! Not good. Personally, if DVC was smart, (just my humble opinion) they should halt sales and start scooping up the fire sales going on. So when the market does turn, they can keep prices up. Just my thoughts.

 

[JimC]

Now how would this work? You buy a foreclosed contract at auction. But the amount you pay does not being the contract current on its debt and outstanding dues. DVC still can refuse to permit you to make a reservation until the contract is in good standing. Or are there different rules for a purchaser of a foreclosed contract?

 

[tjkraz]

Now how would this work? You buy a foreclosed contract at auction. But the amount you pay does not being the contract current on its debt and outstanding dues. DVC still can refuse to permit you to make a reservation until the contract is in good standing. Or are there different rules for a purchaser of a foreclosed contract?

The property would change hands but the debt remains between the original lender and the debtor.

Let's say someone owes $12k (principle, dues, interest, legal fees) on their DVC loan. Disney obtains a judgment and the contract goes up for auction. The winning bid is $10k. The property is transferred to the new owner and Disney gets the $10k to help fulfill a portion of the judgment.

The new owner of the contract has no play in the remaining obligation. Disney must extend all rights to the new owner of the contract. AFAIK, it's pretty much the same as defaulting on a home mortgage and seeing the property go to auction. The winning bidder receives the property lock, stock and barrel regardless of whether the high bid is enough to relieve the original debt.

In the DVC example above, a debt of $2k remains on the obligation. That $2k doesn't just disappear. Disney could obtain a lien against the debtor and continue to pursue the remaining amount of the judgment.

On the other hand, if $12k is owed and the contract goes for $15k at auction, the remaining $3k would be property of the defendant. But he/she would actually have to take steps to recover those dollars. The auctions are typically handled at the Orange County courthouse (for WDW-based DVCs.) I believe the defendant would have to personally appear (or perhaps hire a surrogate) in order to recover those dollars.

 

[VTNuke]

I had always thought Disney could ROFR for any change on the title. So if you and your spouse was listed, there was a divorce, you won the contract in the war, got remarried, and wanted to add your new spouse to the contract, Disney could technically take the contract when you tried to change the title. Not that they would do this, but it was my limited understanding of the ROFR.

I would think if a contract was purchased on the steps of the courthouse, they could ROFR when you tried to change the title. I don't think it's the smartest way to buy a contract, but I could see the TTS doing this as they would know the ends and outs of the ROFR.

Back to the original subject, I think a few things are going to happen with DVC prices over the next 10 to 15 years:

1) Yes they will dip a bit while the economy is down, but on a 100 point contract, this is only $100 savings on every per point decrease. You'd still be paying around $8,000 for the total contract, depending on the resort. If you got it for $7,900, that's great. I wouldn't run out and start buying up contracts because they're $100 to $300 cheaper than they will be in a year.

2) As the economy settles down (and the buy out has not helped the economy in my opinion - if it did, the economy would have started to bounce back already instead of keep falling), Disney will not let these contracts through at these lower rates. You'll see the rates start to climb again. Keep in mind Disney will NEVER lower their sale prices. As the new resorts start to hit the market, you'll see the sale price just get higher and higher. This will help drive up the resale market as well.

3) Disney will offer contract extensions to the current owners of the rest of the resorts that expire in 2042. This will keep the cost of the resale up as well. It is in their best interest to keep offering these extensions. Most of what you pay for in any timeshare is marketing. Contract extensions and even add ons are a lot cheaper for Disney to market than going out and finding a new person to buy into DVC.

4) The price increases will be slow. Yes, people who purchased DVC in the '90's could sell it for possibly more than they paid for it, but that's a 10 year span. I purchased a resale in 2007. I don't expect the price will be high enough to make me want to sell it for at least 10 to 15 years.

Now, the only thing I'm really worried about with the DVC "investment" (and no, I don't think I'll ever make money on this, but I will end up saving money on my trips), is if Disney's level of service and reputation declines significantly. This could happen with a change in philosophy, staff training, or god forbid, Disney is purchased by another company (hello Comcast).

 

[macman752]

The property would change hands but the debt remains between the original lender and the debtor.

Let's say someone owes $12k (principle, dues, interest, legal fees) on their DVC loan. Disney obtains a judgment and the contract goes up for auction. The winning bid is $10k. The property is transferred to the new owner and Disney gets the $10k to help fulfill a portion of the judgment.

The new owner of the contract has no play in the remaining obligation. Disney must extend all rights to the new owner of the contract. AFAIK, it's pretty much the same as defaulting on a home mortgage and seeing the property go to auction. The winning bidder receives the property lock, stock and barrel regardless of whether the high bid is enough to relieve the original debt.

In the DVC example above, a debt of $2k remains on the obligation. That $2k doesn't just disappear. Disney could obtain a lien against the debtor and continue to pursue the remaining amount of the judgment.

On the other hand, if $12k is owed and the contract goes for $15k at auction, the remaining $3k would be property of the defendant. But he/she would actually have to take steps to recover those dollars. The auctions are typically handled at the Orange County courthouse (for WDW-based DVCs.) I believe the defendant would have to personally appear (or perhaps hire a surrogate) in order to recover those dollars.

Your explanation is good with one exception. Bidding on Florida foreclosed property starts at the amount owed plus any and all fees and costs incurred by the mortgagee to get to the sale.

So, if a person owed 12k that is where the bidding would start and go up from that point. Assuming Disney held the mortgage and another party was interested they would raise the bid above the judgment lien price. At that point Disney could decide to bid or allow the bidder to claim the property at their bid price. If the bidder wins the sale Disney in made whole as they receive all the money they were owed and the former owner would be paid any excess by the Clerk of the Court.

 

[DVCPAT]

The property would change hands but the debt remains between the original lender and the debtor.

Let's say someone owes $12k (principle, dues, interest, legal fees) on their DVC loan. Disney obtains a judgment and the contract goes up for auction. The winning bid is $10k. The property is transferred to the new owner and Disney gets the $10k to help fulfill a portion of the judgment.

The new owner of the contract has no play in the remaining obligation. Disney must extend all rights to the new owner of the contract. AFAIK, it's pretty much the same as defaulting on a home mortgage and seeing the property go to auction. The winning bidder receives the property lock, stock and barrel regardless of whether the high bid is enough to relieve the original debt.

In the DVC example above, a debt of $2k remains on the obligation. That $2k doesn't just disappear. Disney could obtain a lien against the debtor and continue to pursue the remaining amount of the judgment.

On the other hand, if $12k is owed and the contract goes for $15k at auction, the remaining $3k would be property of the defendant. But he/she would actually have to take steps to recover those dollars. The auctions are typically handled at the Orange County courthouse (for WDW-based DVCs.) I believe the defendant would have to personally appear (or perhaps hire a surrogate) in order to recover those dollars.

I’ve purchase a few foreclosures and this isn’t how the sale unfolds with real estate. The auctioneer gets real time instructions from the lien holder (Bank/Disney) and they decide what the property will sell for. If the bidding doesn’t satisfy the lender, the auction stops and the property doesn’t sell. I’ve actually been the highest bidder and it’s been rejected. Once the foreclosure process has run it’s course, the bank/disney owns the property.

 

[tjkraz]

Thanks for the clarifications.

I simply meant to illustrate that there's a little more to it than "it goes back to Disney" on foreclosures.

 

[toocherie]

I’ve purchase a few foreclosures and this isn’t how the sale unfolds with real estate. The auctioneer gets real time instructions from the lien holder (Bank/Disney) and they decide what the property will sell for. If the bidding doesn’t satisfy the lender, the auction stops and the property doesn’t sell. I’ve actually been the highest bidder and it’s been rejected. Once the foreclosure process has run it’s course, the bank/disney owns the property.

Just a question of clarification--if the highest bid is over the lien amount and any costs of the foreclosure sale, the lender can't stop the sale can they if they don't like the bid? Because I would think in that circumstance the lender had a chance to make itself "whole" and if it failed to do so the lien against the borrower should be extinguished. If the highest bid was not equal to the lien amount plus costs I could see that--but in my experience the lender (in this case Disney) always is the first bid and they "bid in" their lien amount plus costs as the opening bid. So I guess I'm a little confused (or maybe it's different here in Calif.)