Need input on buying DVC

[kenziesmamaw]

My husband and and I just returned from a few days at WDW. We stayed at Port Orleans French Quarter...our first time ever in a Disney resort...and we are hooked on the ease of staying "inside" the park.

We did the DVC tour of Saratoga Springs and are very impressed with the vacation club and all it offers us, but we are trying to do a little research before jumping in.

A little background on us:
We are in our late forties with grown children. We haven't vacationed every year in the past, but now that our children are grown want to travel more. We LOVE Disney and would like to visit at least every other year and definitely want to take our children/grandchildren for a family experience. We like the options the club offers in addition to Disney and love the points system.

My questions:

The resales look like a great option, particularly compared to the $95/point at Saratoga Springs. To get more points at a different resort through a resale looks like a great idea, but is there a downside?

Because we are empty nesters, we can travel on short trips throughout the year and would like to be able to share our good fortune with some of our other family members who can't afford any vacation at all. We would love to have 200 points or more, but that's just not financially feasible with the cost at Saratoga Springs.

We will need financing, and that's an easy deal with Disney (we want to go the 10 year route if possible). Anybody have experience with other financing options? The home equity option isn't available to us at this point.

So.....I'm hoping to have lots of good advice from you experts out there this weekend. We have an offer from the DVC that if we buy by Monday, 9/13, we can either get $1500 credited toward our purchase or an additional 150 points for next year. We don't want to pass that up unless going the resale route seems to be the better bet.

 

[tjkraz]

First and foremost, if one resort is pulling you toward it more than the other DVC properties, then that is the one you definitely want to buy at. I'm sure you're aware of the 11/7 month booking windows. No sense dealing with the anxiety of trying to consistently book at 7 months.

However, if you'd be equally happy at any of the properties, SSR or OKW are probably going to be the most economical.

The deal at SSR really is competitive compared to today's resale prices. On a resale, you typically pay closing costs and maintenance on any points available for the current year. By the time you total everything up, you're going to end up paying about $76-80 per point.

The only way you can really get a major benefit out of a resale is if you happen to get a contract that has both current year's points available AND some banked points from last year. These typically sell for a few dollars more, but the additional points more than justify the cost. Cheaper resales will be "stripped", meaning the current year's points are gone in addition to next year's. With one of these contracts you wouldn't get any points until 2006.

If you decide to go with a resale, you need to arrange your own financing. I believe there is a company called Tammac that handles timeshare financing, but I don't know how competitive the rates might be. Many banks won't touch timeshares due to the significant loss of value that occurs after the developer sells the ownership.

If you still want to go resale, consider OKW. The points typically sell for less than the other on-site properties, and the maintenance is the lowest in the program.

Back to Saratoga Springs, the promotion you were offered will take your price down to $85 per point. That figure is all-inclusive, and is not too far removed from the resale figures noted above. You would get 11 more years of ownership on the back end--probably not significant to you but it is something to leave behind for the grandkids.

The dues at SSR are the second-lowest in the program. And DVC will offer you very painless financing.

One last comment: Your salesperson may have told you that all you need to do to get the promotional pricing is to put a deposit down before your deadline. That really is how the sales process begins, but at that stage there is no firm commitment required on your part. In other words, if you call your Guide before the 13th and allow DVC to charge a $500 deposit to your credit card, you will have locked-in that discount. DVC will prepare your formal paperwork and send it to you to be signed and notarized. Until you return those signed forms and complete a 14-day waiting period, you can still opt to cancel and get your entire $500 back. My point is, if the 13th arrives and you still aren't sure what to do, give DVC the deposit and buy yourself some additional time. If you finish your research in 2 or 3 weeks and decide to buy a resale, you just call DVC and ask for your $500 back. IMO, this route is better than losing the discount altogether.

Good luck in your decision.

 

[kenziesmamaw]

Thank you! I have been reading on the site since I posted the question and can see the benefit to going through DVC. With what you've shared, it really does make sense to go ahead and begin the process on Monday while still looking at our other options. That way we don't get stuck out in the cold if we wait and prices go up.

Another question if you don't mind...
In reading it seems like it might be possible to go ahead with SSR and then buy more points on a resale at another resort at a later date. What's your view on that rather than just adding on at SSR later?

And finally...
What is ROFR? I can figure out most of the abbreviations, but that one has me stumped!

 

[wanna-b-Tink]

We have added to our ownership twice. It was very easy, though we have always bought straight from Disney for the financing option. With the adding on, you'll want to add on with a use year the same as your initial purchase. For instance, my use year is March for Boardwalk. When we added on at Beach Club and Saratoga Springs, our use year was also March. We would have loved to have all our points in one place, but we couldn't afford the number of points we wanted in the beginning, so we've added as we could, and had to buy at the properties with available ownership when we were ready. This has not been a problem though - even though we've had to go on the wait list for a room a couple of times, they have ALWAYS come through for us and we've gotten our first choice. (And we never stay at Boardwalk or Beach Club.) We are looking forward to our first trip to Saratoga Springs sometime next year, but our favorite place to stay is Old Key West.

ROFR stands for Right of First Refusal. It deals with the resale process.

 

[tjkraz]

As wanna-b-Tink said, ROFR stands for Right of First Refusal. All DVC contracts include a ROFR clause. When members choose to sell their contracts, DVC has final ROFR to take the contract at the negotiated price if they so desire.

If you decided to pursue a resale contract, you would work with the current owner (or his agent) on the sale terms. Once those terms are written-up and signed by both parties, the contract must go to DVC to see if it will pass ROFR. If DVC thinks the terms of the sale are generous (toward the buyer) they will simply take the contract at the agreed-upon rates. You, as the buyer, get nothing. Yes, you get your money back, but you do not get the contract and you're back to square one. This is one of the big pitfalls of going the resale route. You could invest a lot of time and energy in finding a contract and negotiating a deal, all to see DVC grab the contract at your terms and leave you with nothing.

99% of the reason for ROFR is to keep resale prices at a level with which DVC is comfortable. They don't want to see contracts changing hands for $50-60 each while they are trying to sell points at $85-95 each. Make sense?

You are always able to add-on more points later if you wish--either at SSR or any other DVC resort. When DVC grabs those contracts via ROFR, they can then sell the points as add-ons to existing members. Right now their price for the sold-out resorts is $89 each. You could probably get DVC to sell you points at that rate if you press, but, IMO, you're much better taking SSR at $4 less per point and getting the 11 additional years.

Back to your question...if you ultimately decide that you really like the Boardwalk, you could always add-on 100 points at BWV to get the 11 month booking advantage every-other-trip, and then use your SSR points to book at the other properties.

You can add-on either by purchasing points direct from DVC or buying another contract via resale. As wanna-b-Tink said, it can be a challenge to balance more than one contract with multiple Use Years. DVC will only sell you points that match the Use Year on your original contract, so it's not an issue if you get your points from them.

Feel free to ask if you think of anything else.

 

[rocketriter]

Just an idea: if you have, say, 2 descendant families whom you'd like to have inherit your DVC interest, then you should buy 2 separate contracts, since DVC will not allow contracts to be split up during the division of an estate. Normally DVC won't sell you less than 150 points in a single contract, so you'd have to buy 300 points to create 2 contracts for 2 bequests. However, if they know you're buing a total of 200 points, you can always ask your guide if under those circumstances the rules can be bent a bit.

 

[LIFERBABE]

I have added on many many times through DVC after my first contract at BCV. I have waitlisted and when DVC gets they points they call. I have always been able to get the resort of my choice this way and currently own at BCV, SSR, OKW and BWV.

I agree with Tjkraz, that with the current incentives SSR is very comparable to the resales. You should definitely purchase where you want to stay, but SSR is very competitive.

The financing is also easier thru DVC. If HEL is not an option, then you will have to secure your own financing on a resale. That rate is comparable to what DVC charges. DVC also offers the longer term financing.

With DVC, once you place your deposit down, your points are available to you to make ressies, or bank for your next trip or do nothing at all. With a resale, your points will not be available to you until the transaction is finalized and deed recorded which could take months.

As others have reported, DVC is very serious about their deadline on incentive offers. Many have reported, that they exceeded their 3 day period after taking the tour and lost all incentives.

Good luck with your decision!

 

[rinkwide]

Originally posted by tjkraz
...consider OKW. The points typically sell for less than the other on-site properties, and the maintenance is the lowest in the program.

I like that Old Key West idea.

You just might be able to swing the 200 points you covet with a resale at this excellent resort. It's arguably the best value of any DVC and if you liked POFQ you'll love it. Also, since you're from GA I'm guessing you'll be driving down to WDW? If that's the case OKW will be very convenient as you park right in front of your unit.

I too would suggest putting the deposit down to lock in what is a very fair price for SSR but you really should consider the resale market carefully before making your final decision.

 

[kenziesmamaw]

Wow, you are all so helpful and I really appreciate it. I think we will definitely take the option on Monday and put down the deposit so we don't lose the incentive and can have more time to investigate the options.

I'm curious as to your opinions on the two incentives we are offered. One is the $10/point to apply to our down payment and the other is matching points for the number we buy.

The $10/point is attractive because it does bring down the monthly payment a little, but even at the lowest point level, an extra 150 points for the first year is pretty tempting. The person who booked our tour suggested we do the free points rather than the money. What do ya'll think?

And yes...unless the airline tickets are rock bottom, we always drive to Disney. We made it home yesterday in 7 1/2 hours. Even with driving down through the tropical storm part of Frances on Monday, we made it in a little over 8 hours. Now that was a nightmare!

 

[tjkraz]

Originally posted by kenziesmamaw
I'm curious as to your opinions on the two incentives we are offered. One is the $10/point to apply to our down payment and the other is matching points for the number we buy.

The two incentives are essentially equal in value. It's just a question of whether you want/need the extra points being offered vs. the impact the $10 savings will have on your pocketbook.

If you're going to have to finance the purchase, make sure you consider the additional interest you will pay by foregoing the $10 per point discount. The discount promotion would cut $1500 off of the amount you finance. If you finance over 10 years, you're going to pay a lot of interest on that money over the next decade.