Multiple 25 pt add ons?

[LIFERBABE]

I am simply a numbers guy. Here is a real short statistic on this Disney resale board.
88 units for sale with 200-300 points (9 are reduced in price)
92 units for sale with 100-192 points (7 are reduced in price)
13 units for sale with 50-75 points
1 unit for sale with 30 points
0 units for sale with 25 points
I did not include units that are pending for sale in these numbers. I am also not trying to convince someone else to my way of thinking, just showing options. I happen to like assets with high liquidity and yes, DVC is an asset.

I just want to point out, that 25 point contracts are cash sales. DVC does not finance less than 50 points, cash is required. Another reason there are so few 25 pointers out there.

I have multiple small contracts and the way I calculated each contract was for 5 weeknights in a studio at the home resort. I personally would not want a 25 point contract as that is too small to manage, considering how expensive everything else is(Tickets, flights, gas, etc) to have a Disney Day.

So I definitely agree to purchase DVC in small contracts after the initial buy in is met, but there is a such thing as too small and you are paying closing costs on each 25 pointer you buy resale. I'd rather buy a 50 pointer to absorb some of that cost.

 

[TenThousandVolts]

So I definitely agree to purchase DVC in small contracts after the initial buy in is met, but there is a such thing as too small and you are paying closing costs on each 25 pointer you buy resale. I'd rather buy a 50 pointer to absorb some of that cost.

I agree with this- Take HHI as an example. SC recently changed some of the laws regarding timeshare purchases and as a new requirement an attorney must facilitate the closing. This puts CCs at a minimum around $800- On a 25 point contract about 50% of total costs would be closing costs.

 

[keishashadow]

This thread has taken an interesting drift (is a 50 or 25 point add on more attractive to sell). Does anyone believe a 25 is better?

While I think it might be easier to sell one 25 point contract at a higher price than a 50 point contract, I'm not so sure it would be easier to sell 2 25 point contracts.

25 point contracts sell fast, in part, because there are so few of them. If you suddenly flood the market with several, what's going to happen? I've seen folks post they are buying 200 points as 8 25 contracts for the expressed purpose of having better resale. I think that's going to backfire if they have to sell all 200 points at once.

2 different TS agents have recently indicated to me that not only do smaller contracts sell quickly, they tend to 'challenge the market' as to selling price. This is the same info I was given several years ago

many savy buyers are looking to buy in small @ any resort in order to add on elsewhere in a smaller # of points than DVC offers
closing costs are a consideration, however; if the buyer doesn't want/need a full complement of membership (160 pts); you'd make up the difference quickly both in monthly dues & possible finance charges; especially if they plan to add on points sometime in the future...as in bringing the original cost basis down once you factor in the total number of points

personally, if i were going to sell now; i'd ask for near market DVC price for any contract that isn't stripped @ 50 points & less of course im a realtor & like to go for the gusto. If they wouldn't sell, no problem to lower them

 

[BWV Dreamin]

I agree with this- Take HHI as an example. SC recently changed some of the laws regarding timeshare purchases and as a new requirement an attorney must facilitate the closing. This puts CCs at a minimum around $800- On a 25 point contract about 50% of total costs would be closing costs.

I just asked this same question to a TTS sales agent. He quoted me a closing price to sell of about $450 for a HHI contract that is 25-50pts. Why is your figure so high? Does it depend on the closing company?

 

[LFamilyFromMN]

This thread is very helpful. I have recently joined the DISBoards, mostly for the purpose of researching becoming a DVC member.

I tend to agree with the comments posted that 25 points seem to be too few, but mostly because my viewpoint is looking at it from an initial buy perspective. I also liked hearing the comments about the advantage smaller contract numbers might have for ease of specifying the separate contracts in a will, since we have four son's that could be important to us.

I also have some questions that I would appreciate advice or directions on where to look for answers.

The closing costs discussion points are unclear to me. I thought I read someone indicate that once you are a member, there are no closing costs making additional purchases directly from Disney. Or was there a minimum number of points that a member had to have to avoid closing costs?

Closing costs of first time member purchase is also a little fuzzy. If purchased from Disney, is there a set closing cost? Or do they vary by the number of points purchased? Purchase from a resale agent: the information I have seen indicated closing costs are directly related to the number of points, or perhaps the total cost.

Would having answers to these closing cost questions, and factoring in the cost per point, give me what I need to decide when a first time DVC purchase would be better directly from Disney or from a resale? What other factors that are important to consider for first time purchase?

 

[dvc_john]

While selling price and closing costs have been mentioned (when selling a contract), I haven't seen anything about sales commissions.

Wouldn't there be a minimum commission, and that would probably make the sales commission on a 25 point contract a higher percentage of the total sale price than on a 50 point contract, thereby offsetting a higher per point selling price?

 

[BWV Dreamin]

While selling price and closing costs have been mentioned (when selling a contract), I haven't seen anything about sales commissions.

Wouldn't there be a minimum commission, and that would probably make the sales commission on a 25 point contract a higher percentage of the total sale price than on a 50 point contract, thereby offsetting a higher per point selling price?

Usually, the commission is a percentage of the selling price (not including closing costs). It doesn't matter the number of points, its still a % of sales price.

 

[chalee94]

The closing costs discussion points are unclear to me. I thought I read someone indicate that once you are a member, there are no closing costs making additional purchases directly from Disney. Or was there a minimum number of points that a member had to have to avoid closing costs?

no closing costs for members purchasing add-ons directly from DVC. (cost per point may be higher, naturally.) add-on minimums are 25+ pts if paying cash or 50+ pts if financing. (there is no required increment, BTW. you may, for example, purchase 27 or 31 pts if paying cash.)

Closing costs of first time member purchase is also a little fuzzy. If purchased from Disney, is there a set closing cost?

i believe it is a set price (depending on whether or not financing is involved) but i don't know for sure.

Would having answers to these closing cost questions, and factoring in the cost per point, give me what I need to decide when a first time DVC purchase would be better directly from Disney or from a resale? What other factors that are important to consider for first time purchase?

before you buy, definitely read through threads here on the DVC forums and do some searches. learn the ins and outs of the program. make sure you understand the home resort advantages and whether they are worth it to you...

if you prefer an older resort and don't need the pts right away, you can definitely save money buying resale (although you do need to adjust for resale contracts that have been stripped of pts.)

here is a comparison of resale and direct purchase, stolen from DVCMike:

Initial Purchase from DVC

• You can get the exact number of points that you want (although you must buy a minimum of 160)
• Faster than resale (you will be in the system and have your points and be able to make reservations much faster than resale)
• No worries about the purchase if Disney executes ROFR, since that only applies to resale purchases
• More expensive cost per point than the resale market
• You can finance through DVC, and Disney doesn’t report the loan to credit reporting agencies
• You can pay with a Rewards credit card and get points/cash back
• The full set of points you buy will be available immediately, versus a resale contract which may be “stripped” of points.
• If you don’t want the resorts they are currently selling (AKV/SSR), you may have to do some firm talking to a guide to convince them you really want an older resort.

Initial Purchase via Resale

• You may not get the exact number of points you want
• You can purchase less than 160 points for your initial buy-in to DVC (Disney won’t let you buy less than 160 points).
• It will take much longer to get into the DVC system and have your points (resales typically take 6-8 weeks)
• Disney may exercise ROFR and you may lose the resale and have to start all over (When buying resale, one of the potential pitfalls to try to avoid is making an offer that will cause Disney to exercise it’s Right of First Refusal)
• Resale is typically less expensive then buying from DVC
• You can’t finance through DVC, although most resale brokers will recommend a finance company
• A resale contract may be “stripped” of points where the user has used many of the current year’s points, and may have borrowed some or all of next year’s points. Just be aware of “stripped” contracts on the resale market.
• Easier to pickup large point packages at any of the older DVC resorts.

 

[keishashadow]

Usually, the commission is a percentage of the selling price (not including closing costs). It doesn't matter the number of points, its still a % of sales price.

fyi, all real estate commissions are negotiable subject to discretion of broker of record of agency ; doesn't happen ofteni had no such luck lol. usually all the local agencies are in the same ballpark, still - never hurts to ask!

typically set @ a % of selling price or minimum fee, assessed to seller not buyer.

 

[BWV Dreamin]

fyi, all real estate commissions are negotiable subject to discretion of broker of record of agency ; doesn't happen ofteni had no such luck lol. usually all the local agencies are in the same ballpark, still - never hurts to ask!

typically set @ a % of selling price or minimum fee, assessed to seller not buyer.

Usually only see this if you are a top, top, top producer. Also, I bet there's not much leeway with timeshares in that there isn't much commission to be made anyway. The $$ to made is in volume, not sales price! Sorry OT!

 

[LFamilyFromMN]

Thanks chalee94, very helpful advice. Sorry if it took the thread a bit off topic, but it really was helpful to me, and I hope others. We had the "home resort" discussion last night, and without having experienced staying at most of the resorts it was not easy to completely agree. We are OK with AKV, so we are going to listen to what incentives Disney has going with that first.

 

[TenThousandVolts]

I just asked this same question to a TTS sales agent. He quoted me a closing price to sell of about $450 for a HHI contract that is 25-50pts. Why is your figure so high? Does it depend on the closing company?

I don't know-the lawyer charges $$$- maybe we just used a terribly expensive closing company. I didn't pay any of it- the seller did- but on the closing docs it was something like $800 - that was before the GMAC fee (which my seller also paid) This was for 100 points- but the lawyer fee was the bulk of the price- that would be the same no matter how many points the contract is.

 

[BWV Dreamin]

I don't know-the lawyer charges $$$- maybe we just used a terribly expensive closing company. I didn't pay any of it- the seller did- but on the closing docs it was something like $800 - that was before the GMAC fee (which my seller also paid) This was for 100 points- but the lawyer fee was the bulk of the price- that would be the same no matter how many points the contract is.

Wow, maybe because you purchased more than 50 pts., the fee increased. Sure makes me rethink any future purchase for HHI. Do you think this will have futher impact on decreasing HHI resales prices?

 

[TenThousandVolts]

Wow, maybe because you purchased more than 50 pts., the fee increased. Sure makes me rethink any future purchase for HHI. Do you think this will have futher impact on decreasing HHI resales prices?

Another poster on here just bought a 50 pointer and had the same colsing costs- around $800.
I do feel sorry for the sellers- because they ate the whole thing. If they sold before this new law, they would have had more $$ in their pocket. It is certainly eating into their profits. If I had to pay the CCs- I would not have bought there. If these closing costs are normal it will definately have an impact on HHI resales. The Timeshare Store is showing ccs for HHI a LOT less than this, though- so maybe GMAC is using a really expensive closing co.? I really don't know.

 

[bluedoggy]

We just found a resale last night for 25 pts at OKW with banked points from 07. Price was right so we jumped on it right away. We are already owners, and bought our 1st contract several years ago from TTS on a resale of 100 points. I wanted to be able to pay cash, so buying a small contract works best for us. I see that the smaller contracts of 50 pts or less always sell the fastest. Closing costs are $285.

 

[noname70]

It seems to me that unless you find a loaded small contract (w/banked points), an add on thru DVC is the way to go. This price difference does not seem significant enough.