Dvc Resell Or New

[mar2c1]

Why buy from disney when a resell is cheaper?
Why is it cheaper?

 

[Mtnman44]

I would imagine some of the major reasons include:

-Closing much sooner.
-Much lower closing costs
-ease of financing
-sales promotions
-to pick a specific use year rather than wait for one to be listed via resale
-not wanting to wait for ROFR

 

[LIFERBABE]

Many resales are stripped of their points, and can be stripped for the current year and the next year too.
If the contract has points, the buyer could be responsible for paying the dues on those points. All this adds to the final cost of the resale and it does not always come out cheaper than buying direct especially when incentives are offered.
Each resale should be treated separately as there are many variables that can affect the final cost of each.

 

[Dman67]

I would imagine some of the major reasons include:

-Closing much sooner.

Very true. If you buy resale you can expect 3 months at the least before being able to make a DVC reservation.

-Much lower closing costs

Not necessarily true. You can negotiate with the seller to split the closing cost with you or even have the seller pay closing. It all depends on how desperate the seller is to get out of the DVC contract.

-ease of financing

Sure, you could finance through Disney at 10% and higher or find your own financing at potentially a much better rate. I found 6.99% through Capital One.

-sales promotions

Sales promotions still can't get the overall cost per point lower then what you'd pay through resale. Besides Disney has a point minimum of 160 points. You may not want 160 points to start with.

-to pick a specific use year rather than wait for one to be listed via resale

Waiting for the right resale contract could take a while. If you're a patent person it may be worth the wait.

-not wanting to wait for ROFR

Yes there's a wait for ROFR but lately it's been pretty quick. Most are waiting no more than 7 - 10 days for a reply from Disney.

 

[HockeyKat]

You definitely close sooner with a direct purchase. Our resale took 7.5 weeks from offer to the ability to make reservations. Usual timeframe is 6-8 weeks.

Financing was just as easy resale as it was direct (we explored both options), with the reseller's preferred lender. Interest rates on a shorter-term loan were 1% lower than WDW's, as well. As previous poster said, you should also explore other options such as home equity loans, that have better rates than timeshare loans.

Closing costs are about $200-300 cheaper through WDW, so add $1-2/pt depending on contract.

Cheaper definitely depends on the specific contract and resort. We figured that we saved about 2K on our BWV contract, after adjusting for the $200 diff in closing costs. If you account for the extra points we got ("loaded" contract), it is probably adds an extra 2K in opportunity cost.

I think the main reason to do direct is the need to be in the system quickly, i.e. to either make reservations or to switch an existing trip to points.

 

[Maistre Gracey]

Sure, you could finance through Disney at 10% and higher or find your own financing at potentially a much better rate. I found 6.99% through Capital One.

Ahh yes, but we must look at the whole picture.

Financing through a credit card or other source, will likely NOT give you a tax deduction.
Financing through Disney, since the loan is secured as a mortgage, you can PROBABLY deduct the interest. Of course the percentage depends on your tax bracket, but many folks can figure 25% less than the current Disney rate.

MG

 

[mar2c1]

Thank you all.I just started loking in to the DVC and I am sure I wil have a lot more questions.

 

[HockeyKat]

Financing through the TSS's lender carries the same deductible benefits as going through WDW. Home equity would also, of course. Paying through CC or a personal loan would not.

 

[Maistre Gracey]

Financing through the TSS's lender carries the same deductible benefits as going through WDW. Home equity would also, of course. Paying through CC or a personal loan would not.

Although I'm not an accountant, I believe one of the criteria is that it must be secured by a mortgage.

Your above examples do seem to fit that description!

MG

 

[Buckeye Fan]

We had decided to purchase via Disney. We changed our minds and decided to go resale for the following reasons:

1) At the time, slightly cheaper points ($84 resale vs. $86 F&F promotion)
2) Loaded contracts - our 120 point contract had all 05, 06 and all of 07 coming. The 270 had the majority of 06 points available and all of 07 coming.
3) Sellers agreed to sell at $84 per point and pay closing costs. We picked up the MFs for 2007 since we were making the offer very early in January 2007.

Unless sellers are willing to cover closing costs, be careful. The deal may not be as good as it seems. The closing costs are usually a good bit higher via resale ($200 vs. $600+/-). Also, some companies charge other fees, so be sure and ask what the total cost for the contract will be out the door if you decide to make an offer on the contract and it's accepted as offered. I found out that GMAC charges some type of administrative fee. I negotiated for one seller pick it up and I picked it up on the 120 point contract since it was so loaded with points. I didn't want to lose it over $200.

In the end, I saved $780 by saving $2 points per point. Since I would have paid Dis $200 for closing, the $200 admin fee was a wash. I'm not sure I'd do it again since the price per point was so close, but $84 compared to mid $90s for AKV or SSR for 160 points or more? I'd definitely buy resale!!!

Good luck!