New $500 Resale DVC Transfer Fee

[WinterSolider]

@Brian Noble @pkrieger2287 help me wrap my head around this because I think I'm onto something but I can't quite get there...

Doesn't this new fee essentially create ROFR arbitrage to Disney's benefit? It seems like the fee only applies to sales with a third party but does not apply to ROFR sales, ensuring that Disney can purchase contracts through ROFR at a $500 discount to the current fair market price.

 

[Brian Noble]

unlike many timeshare horror stories

Where I differ is that I don't view those as horror stories. I view them as buying opportunities, because most of them have postiive usage value, and some of them have even better exchange value. I've made a lot of hay with my (non-DVC) portfolio that cost me all of a few hundred to maybe a thousand to put together.

 

[mkatsy]

Where I differ is that I don't view those as horror stories. I view them as buying opportunities, because most of them have postiive usage value, and some of them have even better exchange value. I've made a lot of hay with my (non-DVC) portfolio that cost me all of a few hundred to maybe a thousand to put together.

Fair enough … but I would wager that you are at the top of the pyramid in terms of timeshare user education. You can’t stand in the apex position and claim that your experience is “typical”.

 

[pkrieger2287]

@Brian Noble @pkrieger2287 help me wrap my head around this because I think I'm onto something but I can't quite get there...

Doesn't this new fee essentially create ROFR arbitrage to Disney's benefit? It seems like the fee only applies to sales with a third party but does not apply to ROFR sales, ensuring that Disney can purchase contracts through ROFR at a $500 discount to the current fair market price.

I'm not an attorney, so I'm not really going to touch that one other than to say I think DVC would still argue that there is much more involved in a transfer to a new member than in absorbing the points themselves via the ROFR process. That said, you could then argue how adding on via a resale purchase does not equal the same processes as compared to a new first-time resale purchase.

 

[WinterSolider]

I had AI write it up for me...

 

[mgarbowski]

I measure my outrage both on how something affects me but also whether I think its effect on other owners is fair.

I just don't think it is unfair for DVD to charge a fee to record transfers. I think it will have a de minimis effect on people who buy and hold long term, or even short term. If you buy, use it (however long), sell and done, it's not a big deal.

It will seriously affect those who buy and sell repeatedly. There are owners who first buy Resorts A and B, then want something new so they sell B to buy C. Then Shiny New D comes along and they sell A and C to Buy D, and so on. There's nothing wrong with that, but there's also nothing wrong with charging to record those transactions either.

 

[Brianstl]

This will be looked at as a $1,000 extra cost by people that strip and flip contracts because they will automatically account for the cost on both ends because they don't plan on holding the contract. I like seeing these people getting hit with extra costs, but at the end of the day it will have a direct negative impact on resale values. The amount they are willing to bid on any 100 point contract is automatically decreased by $10 a point on a 100 point contract, $5 on a 200, $4 on 250 etc. Judging by the amount of stripped contracts that come up on resale sites, stripper/flippers make up a decent sized portion of the the loaded contract buyers.

 

[walt34]

There's nothing wrong with that, but there's also nothing wrong with charging to record those transactions either.

I guess if the fee was $150, we wouldn't be having this discussion. $500 feels disconnected from actual costs and if that's ok, why stop there? $1000 would be even more beneficial to Disney.

 

[Chili327]

Where I differ is that I don't view those as horror stories. I view them as buying opportunities, because most of them have positive usage value, and some of them have even better exchange value.

Definitely fair enough, like I said, I'm not well versed in timeshares whatsoever, so I only have heard horror stories, but I believe if you know the ins & outs there must be a way to handle it better than most know about.

I've made a lot of hay with my (non-DVC) portfolio that cost me all of a few hundred to maybe a thousand to put together.

I would love to be educated enough on timeshares in general to feel comfortable diving into that as well, since Disney isn't the only place I plan to visit for the rest of my life.

 

[LittleBitGoofy]

I guess if the fee was $150, we wouldn't be having this discussion. $500 feels disconnected from actual costs and if that's ok, why stop there? $1000 would be even more beneficial to Disney.

I agree on this. I appreciate there is a cost to DVD to process these and it'd be reasonable to collect on that, but I think it's fair to say that cost is not close to $500 or we would have seen it start being applied decades ago.

This new charge feels like a money grab stacked on top of what could have been a reasonable fee.

And as an owner of a stack of smaller contracts the announcement did cause me a heavy sigh for its potential downward pressure on eventual resale value. That's a fee that does not scale up or down. Ah well.

 

[RivShore]

Was there any new info on this from today's meetings? Maybe I missed it.

 

[Brian Noble]

Doesn't this new fee essentially create ROFR arbitrage to Disney's benefit?

I think @mgarbowski is right---it might have an effect, but it is minimal. On a typical resale contract, this is less than 5% and sometimes significantly less.

I would love to be educated enough on timeshares in general to feel comfortable diving into that as well,

Well, for starters I'm not sure I would do this again. Exchange is an arbitrage game, and like most arbitrage games, the leverage dissipates over time as more people discover it. There are other reasons why exchange is not what it used to be--the mini-systems' internal exchange mechanisms reduce the volume of deposits, there are more viable rental channels, and the exchange ecosystem itself has fragmented.

But, that doesn't mean you couldn't risk a few bucks on it. Hang around TUG and read. Give yourself A LOT of time before you jump in. www.tugbbs.com

 

[Brian Noble]

I will add that it is probably best to view timeshare exchange as a hobby. If you actually figured out how much you saved by exchange instead of renting the same things, and divided it by the hours spent, my guess it that the hourly rate is not great.

 

[Sandisw]

I don’t know… it feels like we keep justifying and enabling increasingly bad DVC decisions. Every new fee or restriction gets defended as “normal” or “not a big deal,” and the bar just keeps moving.

At this rate, 10 years from now I can totally see someone saying: “So what, live-streaming yourself doing the chicken dance before booking is standard timeshare practice. And what’s the big deal with having to name your firstborn Mickey or Walt to preserve direct benefits? Those are perfectly acceptable names.”

Obviously exaggerated but that’s kind of the point. When there’s no pushback, today’s unreasonable policy becomes tomorrow’s precedent.

I don’t know… it feels like we keep justifying and enabling increasingly bad DVC decisions. Every new fee or restriction gets defended as “normal” or “not a big deal,” and the bar just keeps moving.

At this rate, 10 years from now I can totally see someone saying: “So what, live-streaming yourself doing the chicken dance before booking is standard timeshare practice. And what’s the big deal with having to name your firstborn Mickey or Walt to preserve direct benefits? Those are perfectly acceptable names.”

Obviously exaggerated but that’s kind of the point. When there’s no pushback, today’s unreasonable policy becomes tomorrow’s precedent.

People who are concerned about decisions DVC make should definitely be reaching out to them and share their feelings.

But, there are some of us, myself included, view this as nothing more than a business decision

Motive, for me, doesn’t really matter because when they start making decisions I personally am not a fan of thar I feel changes the product I bought, then I will decide to stay or go.

 

[Sandisw]

Some things are worth spending my time and emotional energy to push back on. This is not one of those, as it is so very ordinary and I don't see a rational basis for objecting to it other than "I don't like spending more money."

I'm a little more inclined to push back on cross-Residential-Unit reallocations. I'd also push back on increasing the lockoff premium, both for the same underlying reason---as far as I can tell, the governing documents forbid it.

VGF POS allows an increase in the lock off and from what I read, it doesn’t have to balanced out.

 

[Chili327]

I will add that it is probably best to view timeshare exchange as a hobby. If you actually figured out how much you saved by exchange instead of renting the same things, and divided it by the hours spent, my guess it that the hourly rate is not great.

Sounds about right, but I do see some really great deals on last minute travel!! (just need to be able to take off and not spend a fortune on flights, etc)

 

[Sandisw]

I fully understand it’s not the same, but one thing that convinced me to even look into DVC (before I ever visited Florida) was because the resale value was there, unlike many timeshare horror stories I had heard of before. I’m not well versed on timeshares whatsoever, but once I knew the value was there if I didn’t like it or couldn’t afford it, it didn’t matter, I was willing to jump in head first to try it.
So all I’m saying is that they are devaluing it overall with each nail they hammer into resale.
The fact that there is no other timeshare option on-property adds another level, but that is not what I’m adding into my equation, because they had no bearing on my decision to buy into DVC.

But don’t you think that as long as the parks exist and people are going to Disney, there will be a market to buy the contract?

I do. Now, if someone went in with the expectation that it will always maintain a decent resale value?

IMO, I think that wasn’t the best choice. It’s why I caution people to not consider it as part of the equation because there are just too many unknowns in what could happen, especially moves by DVD, that can influence it.

 

[Sandisw]

Was there any new info on this from today's meetings? Maybe I missed it.

I just had them clarify that if you do a gratuitous transfer, you don’t get charged the fee.

Not sure if it came up at any other meetings today.

 

[Brian Noble]

VGF POS allows an increase in the lock off

And I think they could do it at VGF without that specific language, possibly. But, if a resort has any dedicated studios/1BRs, (the OG VGF does not) then increasing the lockoff premium *also* increases the points allocated to any Residential Unit with such a dedicated room. And that they cannot do.

At least, that's what happens unless they start charging different values for lockoff studios vs. dedicated ones.

 

[VGCgroupie]

I will add that it is probably best to view timeshare exchange as a hobby. If you actually figured out how much you saved by exchange instead of renting the same things, and divided it by the hours spent, my guess it that the hourly rate is not great.

If I had a nickel for every minute I spent just talking about DVC on these boards...