Is Disney looking to setup a Resale Store?

[Cynt]

In light of the recent changes I was wondering does Disney purchase points back from current DVC owners? For instance if I purchased 160 points directly from Disney, I needed/wanted to sell them, will Disney purchase them back OR do they have some type of resale store like The Timeshare Store? I'm aware of ROFR, I'm not referring to that. I was just wondering if they have some type of resale procedure.

I asks this question because if they don't do you think they are looking to get into the resale market? Are they looking to setup some type of "Resale Store" which would allow DVC owners to sell their points through them?

 

[Y-ASK]

They already are in the resale market. They ROFR and then re-package and re-sell those points. As far as I know, they only take the points from an owner after they have to foreclose because of non-payment of a loan or maintenance fees.


Y-ASK

 

[chalee94]

In light of the recent changes I was wondering does Disney purchase points back from current DVC owners?

not usually.

they have been willing to take them back from paid-off BCV owners directly for $50-ish per pt when the BCV owners could have sold on the resale market for $90-ish per pt. but that was unusual. and for contracts that are still under a loan, they can simply foreclose.

For instance if I purchased 160 points directly from Disney, I needed/wanted to sell them, will Disney purchase them back OR do they have some type of resale store like The Timeshare Store? I asks this question because if they don't do you think they are looking to get into the resale market? Are they looking to setup some type of "Resale Store" which would allow DVC owners to sell their points through them?

no. i can't think of any reason at all why they would want to do this. disney will let you negotiate with others to see how good of a deal they can get out of you...then disney can decide whether to take the contract or not. i think DVC used to get kickbacks from recommending GMAC as a reseller...but no need for DVC to bother with getting involved directly.

 

[CMOORE185]

They have bought points back in the past for certain resorts, though it was usually at such a low per point amount that it made more sense just to go through a broker. The last resort I heard of them buying back directly from owners was BCV, which makes sense because it was the resort in most demand on the secondary market. I do not know know if they buy any resorts back directly anymore though.

 

[Cynt]

Thanks for the info.

 

[LouisianaDisneyFan]

Actually, it wouldn't be a bad move on their part if they did do this for the sold out resorts. Right now, if they want to purchase points back and repackage them, the contract becomes their asset... but also their liability. The resale market is also a thorn in Disney's side when informed buyers ask "Well, what about resales? They're so much cheaper!" If Disney offered resales in addition to new properties, then they would be in an even better position to say, "Well, if you buy direct, then you get all these extra benefits and IF you decide that DVC isn't for you later on, we'll help you resell your contract!" That certainly would put more would-be owners at ease during the purchase process, don't you think? I also believe many potential buyers who were exclusively considering resales would prefer to go directly to Disney for this purchase rather than working through a broker. Disney would most likely be viewed as the "safest" place to purchase your resale, because they certainly would be in a position to know if a contract was distressed, and they would also be in the best position to expeditiously transfer the contract to a new owner. If they threw in the free closing costs for a minimum purchase (which they could easily do), then they'd be in a prime position to essentially drive all the well-known resale companies out of business... thus squashing their competition.

All in all, it doesn't look like that would be such a bad idea for Disney at all.

 

[LouisianaDisneyFan]

More that I just thought about... if Disney offered resales, they could also add an additional tier to their sales package that others could not. They could offer potential buyers in the resale market the possibility to purchase a sold-out resort with the newly revised resale benefits or the opportunity to "upgrade" to full benefits for a fee. Additionally, if Disney doesn't anticipate building more new properties in the near future, this would actually be a logical step for them to take... as it would be an income producer during the interim while they looked over new projects. Actively participating in the market, even if just through resales, would also assist them in keeping up with the "pulse" of interest for DVC as a product.

 

[Cynt]

Thank you Louisana - You put to text exactly what I was thinking.

 

[disneynutz]

Disney already offers resales, but not at a resale price. They have acquired points last year due to loan defaults, walk aways, foreclosures, and the BCV ROFRs. As previously posted they can break the contracts up and put them back in inventory to be sold again. Something that we aren't allowed to do.

Bill

 

[LouisianaDisneyFan]

Disney already offers resales, but not at a resale price. They have acquired points last year due to loan defaults, walk aways, foreclosures, and the BCV ROFRs. As previously posted they can break the contracts up and put them back in inventory to be sold again. Something that we aren't allowed to do.

Bill

Yes, but in those cases, Disney is the holder of the contract and therefore is responsible for the MFs and taxes. I believe the OP was asking if others thought perhaps Disney was gearing up to act as a broker rather than a holder of the contracts, in which case the DVC member retains the responsibility for MFs and taxes.

Disney originally did not offer closing services for resales and now they do. It seems logical that the next step in this process would be to go ahead and offer full brokerage services, especially if BLT is really about to sell out. With no new WDW/DVC construction going on, but intense marketing efforts pushing awareness of DVC, this would give Disney a ready inventory of contracts to sell without having to commit the capital outlay required to purchase the contracts through ROFR.

 

[eljefe45]

I think they could make money on doing this stuff themselves but I was told by a cast member they don't want to be selling a bunch of old resorts when they are trying to sell the new ones. They don't want somebody selling AKV to buy Hawaii, to them that's just moving around points. They would profit but it could tie up a lot of capital and I think the powers that be don't want that.

 

[LouisianaDisneyFan]

I think they could make money on doing this stuff themselves but I was told by a cast member they don't want to be selling a bunch of old resorts when they are trying to sell the new ones. They don't want somebody selling AKV to buy Hawaii, to them that's just moving around points. They would profit but it could tie up a lot of capital and I think the powers that be don't want that.

If Disney acted as a broker, then it would not tie up capital... whereas buying back property via ROFR does tie up capital...

 

[Cynt]

Yes, but in those cases, Disney is the holder of the contract and therefore is responsible for the MFs and taxes. I believe the OP was asking if others thought perhaps Disney was gearing up to act as a broker rather than a holder of the contracts, in which case the DVC member retains the responsibility for MFs and taxes.
Disney originally did not offer closing services for resales and now they do. It seems logical that the next step in this process would be to go ahead and offer full brokerage services, especially if BLT is really about to sell out. With no new WDW/DVC construction going on, but intense marketing efforts pushing awareness of DVC, this would give Disney a ready inventory of contracts to sell without having to commit the capital outlay required to purchase the contracts through ROFR.

Yes, that is what I was asking.

 

[chalee94]

If Disney acted as a broker, then it would not tie up capital... whereas buying back property via ROFR does tie up capital...

the thing is that marriott did something similar a few years back. instead of charging 10-12% commission as TTS does, they charged a 40% commission - i believe they charged retail prices using their retail sales arm rather than setting up a completely new sales arm for resales (so in DVC terms, DVC might sell your BLT resale for $130 per pt and give you $78 per pt if it sold, which is less than if TTS sold it at $95 per pt).

what also happened is that as the economy tightened, marriott realized that this goodwill gesture of helping customers sell their timeshare was competing with their active sales...so guess who got shafted? it began to take several years to resell your marriott timeshare through marriott, if it happened at all. fortunately (for marriott), as you have pointed out, you would continue to owe dues during this period.

if the economy starts booming, maybe DVC takes another look at that idea...but realistically, it's been tried and it doesn't work nearly as well as you imagine it would.

 

[LouisianaDisneyFan]

the thing is that marriott did something similar a few years back. instead of charging 10-12% commission as TTS does, they charged a 40% commission - i believe they charged retail prices using their retail sales arm rather than setting up a completely new sales arm for resales (so in DVC terms, DVC might sell your BLT resale for $130 per pt and give you $78 per pt if it sold, which is less than if TTS sold it at $95 per pt).

what also happened is that as the economy tightened, marriott realized that this goodwill gesture of helping customers sell their timeshare was competing with their active sales...so guess who got shafted? it began to take several years to resell your marriott timeshare through marriott, if it happened at all. fortunately (for marriott), as you have pointed out, you would continue to owe dues during this period.

if the economy starts booming, maybe DVC takes another look at that idea...but realistically, it's been tried and it doesn't work nearly as well as you imagine it would.

The difference I see here is that WDW has many resorts located in the same physical location... all with a specific end date for the contracts. There is a lot of traffic staying at other locations that come into direct contact with the DVC sales desks... in the parks, in the resorts where they are staying, etc. Unlike Marriot, Disney has a ready group of potential customers who can immediately visit many of the offerings of DVC.

I believe that Disney wants to expand their timeshare offerings in the future to include more varied destinations... and thus they would want to keep interest alive in their product. They've invested in a lot of marketing to raise public awareness of DVC, and the best way to keep that public awareness high is to ensure strong inventory is available for those potential customers. They can't realistically expect to sell enough properties with early expiration dates as new contracts (as opposed to add-ons) at the current prices, and I don't believe they will repackage points and sell them with an extended end date at this time. I think their most profitable course of action would be to act as a broker in this interim time before they choose and begin their next project, offering the older properties at a reasonable price (comparable to the resales), with the option to "upgrade" to full member benefits for an additional fee. Cash in with no cash out. Traffic in and ready inventory to meet demand. Goodwill in the ability to tell potential customers that "we'll help you sell if you later decide this isn't for you." I only see positives for Disney if they end up going this route.

 

[LouisianaDisneyFan]

One more thing I neglected to mention above... and this could be a biggie. If Disney offered financing to purchasers while also acting as the broker, it would ensure a steady flow of loans (thus keeping that branch of the business profitable through steady interest payments) after the new properties sell out.

 

[CMOORE185]

One more thing I neglected to mention above... and this could be a biggie. If Disney offered financing to purchasers while also acting as the broker, it would ensure a steady flow of loans (thus keeping that branch of the business profitable through steady interest payments) after the new properties sell out.

The problem is that Disney does not want keep these loans for any extended period of time. They used to make a ton of money providing financing and than selling these loans for a nice profit. When the financial business crashed the selling of these loans dried up and they lost this steady stream of income from selling loans for a nice profit. For whatever reason they do not want to keep these loans.