Looking to buy a resale--now or later?

[gk90]

Hi everyone, I've been reading the DVC boards ever since we came back from our Aug WDW vacation. I overheard a guide at the DVC booth at the Poly explaining the way that DVC works and thought that it sounded good, except that we would never use 160 points a year.

Then when I found out about resales I ran the numbers and figured that a smaller contract, maybe 75-80 points, would work for us. I managed to get DH interested (he loves the idea of being able to stay at AKV, VWL or OKW at DVC rates) but he's saying that he'd like to wait a while to buy, that with the current economy, resales might be more plentiful and prices should be better for us in a few months.

What do you think? We're not in any rush, in fact our next WDW trip isn't going to be until 2009.

Any ideas or advice would be appreciated!

 

[bobbiwoz]

Did you look at this thread?
http://www.disboards.com/showthread.php?t=1363572
Small resales get a premium, you can study the trend, and decide. However, if you look at resales, the 75 -80 point contracts don't come around THAT often. I don't think that it's too soon to be LOOKING for a contract. '09 is only next year, with the 11 month home booking, other owners will be booking later this year! DVC people tend to be planners!

Bobbi

 

[wendyinoc]

Disney control's pricing so don't expect prices to change. I can't see them recession or not lowering their price.

 

[snowbunny]

There are already a lot of resales...I won't say dumped but if you take a look at The Timeshare Store listings for SSR for example (lots and lots of them), I would think you could get a very good deal.

 

[TenThousandVolts]

I think your husband is probably right that you may see a dip in prices- but over the next few months it won't be more than maybe $1 per point Actually- I think they asking prices are down a tad right now compared to a few months ago. But- in case you haven't heard about ROFR- you need to know that you can't find a desparate seller and get a great deal by making a lowball offer. Disney has the Right of First Refusal (ROFR), so they will snatch up any contracts with low offers.

What size contract are you looking for?

 

[BWV Dreamin]

I also think Disney's prices tend to go up just before or after they open up a new resort. With a couple on the way, I don't think I would wait more than a year. JMHO

 

[dheinle]

I was looking at resales on and off for the last 3 years and have not really noticed any major price shifts.

Like the other poster said Disney uses ROFR to keep the price where they want it for resales.

And yes small contracts carry a premium, I just paid $104 (full retail) a point for 50 point akv contract.

if you only want 75 or so points you can buy a small contract like 50 and then do add-ons to get to where you want. I figured we would use 100 points a year. So I plan on adding 50 points next year. This way I can break up paying for it without financing.

Once we decided we were going to purchase a resale at AKV, it only took 6 weeks to find the contract we wanted.

Also with resale figure 3 months to close and then the 11 month window for booking. 2009 will be here in no time.

I say decide where you want to buy and then get on the TTS mailing list and keep a look out for the contract you want.

Dennis

 

[JimMIA]

I think your husband is partially right. I think the economy, if in fact it worsens, will have an effect and there will be more contracts on the market.

However, don't forget that Disney maintains a floor under resale prices through ROFR (Right of First Refusal). Every resale contract must be reviewed by Disney, and if the price is too low, they have the option of replacing the purchaser and buying it themselves. They do that because keeping resale prices up makes it easier for them to sell "new" contracts.

In addition, Disney tends to ROFR more aggressively on small contracts -- in other words, they might let a 200 point OKW contract go through at 74, but ROFR a 50 point OKW contract at 75, or even higher. I think the main reason for that is just to reduce their admin costs. It costs virtually the same to administer a 50-point contract as it does to administer a 500-point contract, so they're eager to eliminate a contract for a relatively low cost, even though the per-point cost is a little higher.

 

[gk90]

Thanks everyone for the replies and ideas

Did you look at this thread?
http://www.disboards.com/showthread.php?t=1363572
Small resales get a premium, you can study the trend, and decide. However, if you look at resales, the 75 -80 point contracts don't come around THAT often. I don't think that it's too soon to be LOOKING for a contract. '09 is only next year, with the 11 month home booking, other owners will be booking later this year! DVC people tend to be planners!

Bobbi

Yes, I'm an obsessive planner and am looking at future booking windows for a Aug 2009 vacation.

I think your husband is probably right that you may see a dip in prices- but over the next few months it won't be more than maybe $1 per point Actually- I think they asking prices are down a tad right now compared to a few months ago. But- in case you haven't heard about ROFR- you need to know that you can't find a desparate seller and get a great deal by making a lowball offer. Disney has the Right of First Refusal (ROFR), so they will snatch up any contracts with low offers.

What size contract are you looking for?

Looking for 75 points or so, and I guess my question (which JimMIA also addressed) was partly whether a large number of resales and dip in prices would have any impact on ROFR, or whether Disney would just ROFR all the lowball offers and so put the points back in their own inventory. I also wondered about the issue of smaller contracts being more expensive and was wondering whether there was some kind of volume discount, I hadn't thought about administrative costs as the factor.

There are already a lot of resales...I won't say dumped but if you take a look at The Timeshare Store listings for SSR for example (lots and lots of them), I would think you could get a very good deal.

Thanks, I've been looking at listings but not for long enough to be able to compare the numbers now with ones in the past.

And yes small contracts carry a premium, I just paid $104 (full retail) a point for 50 point akv contract.

if you only want 75 or so points you can buy a small contract like 50 and then do add-ons to get to where you want. I figured we would use 100 points a year. So I plan on adding 50 points next year. This way I can break up paying for it without financing.


I say decide where you want to buy and then get on the TTS mailing list and keep a look out for the contract you want.

Dennis

Hey Dennis! I was looking at one of those 50 pt AKV contracts and even called TTS to ask about them. Jerry at TTS pointed out that since we don't plan to vacation at any of the premium times we should be fine with booking AKV at the 7 month window so don't need to pay the $104 for AKV as home resort and should be fine with a Saratoga contract instead.

 

[bobbiwoz]

...
Hey Dennis! I was looking at one of those 50 pt AKV contracts and even called TTS to ask about them. Jerry at TTS pointed out that since we don't plan to vacation at any of the premium times we should be fine with booking AKV at the 7 month window so don't need to pay the $104 for AKV as home resort and should be fine with a Saratoga contract instead.

As far as AKV goes, it's not only the 11 month booking for premium times, it's the sort of villa that's wanted. At BWV, the SV go fast as do the Boardwalk views. So far the concierge rooms at AKV seem to go fast and there are only a maximum of 10 units, 5 if they all were booked as 2 bedrooms. At AKV it remains to be seen if people are going to go for the value rooms or standard rooms which carry are point bargains. We have stayed in a value studio, and I'll be happy to stay in one again, especially it was a "value" for a stay that included a weekend and we got one with a savannah view. At BCV, there are a very limited number of dedicated 2 bedrooms with 2 Q's in the second bedroom.

So, besides the information that everyone knows about the 7-11 booking, sometimes there are other facts that should weigh in the decision.

Bobbi

 

[MICKEYDRIVEN]

When I was looking for a resale for AKV there were none for sale. They told me the same thing about slower times being available as I was looking for a May reservation. I got talked into SSR and guess what? I could not get a studio for May. I seriously regret not waiting to buy AKV as now I have 50 years of not knowing what I can reserve and being disappointed many times. I wish I found these boards before I bought that contract. I would have waited and got what I wanted. Remember the initial buy in price is nothing compared to 50 years of disappointment. These boards are correct when they say buy where you want to stay especially if you plan to use the 11 month booking window. Good Luck with your decision.

 

[bobbiwoz]

When I was looking for a resale for AKV there were none for sale. They told me the same thing about slower times being available as I was looking for a May reservation. I got talked into SSR and guess what? I could not get a studio for May. I seriously regret not waiting to buy AKV as now I have 50 years of not knowing what I can reserve and being disappointed many times. I wish I found these boards before I bought that contract. I would have waited and got what I wanted. Remember the initial buy in price is nothing compared to 50 years of disappointment. These boards are correct when they say buy where you want to stay especially if you plan to use the 11 month booking window. Good Luck with your decision.

Did you try for BCV at 7 months? We only bought into BCV last year, so this was our first booking May at 11 months, but for 3 years prior, we did book even 2 studios for our May trip right at 7 months.

Bobbi

 

[MICKEYDRIVEN]

No, I tried to get into AKV for a studio and couldn't. It is my favorite resort and now I cant get in. I hope ther will be times when I can, but I am truely regretful that I just didnt buy there from the start. This is a commitmet to my vacations and now I commited 50 years to the wrong resort. I like to plan at the 11 month mark and cannot do that now. I should have gone with my first choice. I may have to sell my SSR and buy a small AKV to be happy. I am an OCD vacation planner and this is not good for my illness

 

[TenThousandVolts]

If you are waitlisted you still have a good chance of getting what you want. Good luck.

 

[dheinle]

When I was looking for a resale for AKV there were none for sale. They told me the same thing about slower times being available as I was looking for a May reservation. I got talked into SSR and guess what? I could not get a studio for May. I seriously regret not waiting to buy AKV as now I have 50 years of not knowing what I can reserve and being disappointed many times. I wish I found these boards before I bought that contract. I would have waited and got what I wanted. Remember the initial buy in price is nothing compared to 50 years of disappointment. These boards are correct when they say buy where you want to stay especially if you plan to use the 11 month booking window. Good Luck with your decision.

Why not do a 50 point add-on at AKV and then sell the 50 point SSR contract? Just a thought. Yes you'll have to pay closing costs twice but you will get what you want.

Before we found the 50 point AKV, i seriously considered a small reslale at OKW, wait a year and then do an add-on for AKV, wait a year and sell OKW.

Dennis

 

[Caskbill]

Don't forget that when comparing resale there are other factors.

1. Closing costs are higher. (Disney subsidizes some of the closing costs to new buyers when purchased directly) Closing costs on a 50 point resale contract could easily add about $8.00/point.

2. Banked or Borrowed points. The 'value' of a resale is greatly affected by the point status. One with banked points is worth more than one with borrowed points already gone. With Disney you get current year points. So for example if you purchased today, a June Use Year, you would get full 2007 points, and then 06/01/08 you get another full set of points. (2008 Use Year points)

3. Dues are based on an annual calendar, not a use year calendar. Disney pro-rates dues. If you purchased that June Use Year, you would pay zero dues that could be attributed to those 2007 points, even though they would be used in 2008. And if you purchased in February, you'd only pay 11/12ths of the regular 2008 dues. Resale sellers (meaning the member, not the broker) often incorrectly want to charge buyers for previous dues they may have paid. You'll hear things like they want reimbursement for the dues they paid Jan 2007 because you are getting all the 2007 points. It doesn't work that way. If you agree to that you could easily wind up paying another $4.50 a point or so that you wouldn't pay if you purchased direct from Disney.

Just some things to consider.

 

[gk90]

Don't forget that when comparing resale there are other factors.

1. Closing costs are higher. (Disney subsidizes some of the closing costs to new buyers when purchased directly) Closing costs on a 50 point resale contract could easily add about $8.00/point.

2. Banked or Borrowed points. The 'value' of a resale is greatly affected by the point status. One with banked points is worth more than one with borrowed points already gone. With Disney you get current year points. So for example if you purchased today, a June Use Year, you would get full 2007 points, and then 06/01/08 you get another full set of points. (2008 Use Year points)

3. Dues are based on an annual calendar, not a use year calendar. Disney pro-rates dues. If you purchased that June Use Year, you would pay zero dues that could be attributed to those 2007 points, even though they would be used in 2008. And if you purchased in February, you'd only pay 11/12ths of the regular 2008 dues. Resale sellers (meaning the member, not the broker) often incorrectly want to charge buyers for previous dues they may have paid. You'll hear things like they want reimbursement for the dues they paid Jan 2007 because you are getting all the 2007 points. It doesn't work that way. If you agree to that you could easily wind up paying another $4.50 a point or so that you wouldn't pay if you purchased direct from Disney.

Just some things to consider.

THanks for pointing out these factors Caskbill, more numbers to keep in mind and consider. One of the reasons we're thinking resale is that we're interested in a couple of the sold out resorts like BCV or VWL, in fact there are a couple of attractive TimeShare store listings right now that I'm strongly considering. Their closing costs for 25-50 point contracts are $322 which works out at $6.44 /pt for 50 pts but $10.73/pt for 30 pts.

So if I bought a 50 pt resale contract, after that could I go directly to Disney and add on 30 pts, either AKV or SSR? Is there anywhere I could look to see how much the closing costs would be for those points?

And speaking of prices there are some really low prices just posted for VB resales, 100 pts for $59 a point--looks like that one won't pass ROFR?