New $500 Resale DVC Transfer Fee

[Brian Noble]

I have a hard time thinking it takes any more than 30 minutes to transfer a contract from the seller to the buyer.

I'm not so sure. It takes me more than 30 minutes to fill out an expense report---and that's with a system that does quite a bit of the work for me.

No one should ever, ever pay anyone to get rid of their unwanted timeshare.

Quoted for truth. What's more, if you own a timehare that has postiive usage value (as in: the fees are less than the market rental rate for the same or a very similar week) it is pretty easy to have some other timeshare owner "adopt" it, with the old owner paying at most closing costs at the agent of their choosing. The thread on TUg that @CarolynFH posted is a good place to start.

someone referenced fees to “deed back” a timeshare to the resort

If the resort is not (part of a system that is) in active sales, these fees are often on the high side. That's because there is no easy way to recycle the week back into someone else's hands, and the HOA will want a buffer for the unpaid annual fees to help protect other owners. In those circumstances, it is better to find someone to adopt it.

If the week is not adoptable---in other words, the annual fees are higher than market rental rates---then the resort is a dead man walking. Likely, it will eventually cease operation as a timeshare*. When that happens, the property is usually sold to some other developer for some other purpose, with the proceeds split among the owners left standing. There are even a few third-party management companies that specialize in these wind-downs. Lemonjuice is one example. And the name is no accident: "When life gives you lemons..."

But, if closure is not immenently on the horizon, it might be a better choice to just default on the fees and force the HOA to foreclose if they won't take it back under less adversarial circumstances. This might have a very modest impact on one's credit score, but based on reports at TUG, usually it does not because it is not credit in the traditional sense.

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*: I own at a week at a resort that is in the midst of its wind-down. The owners have voted in favor of closure, and the timeshare component ceases operations at the end of this month. It will be put up for auction at some point in the not too distant future. This is a little bit of a different situation, as the resort had fees quite a bit lower than market rents. But, there were latent construction defects that were recently discovered that renders the buildings wothless as is.

The property was originally developed as whole-ownership condos, but the project came out at a bad time economically, and only sold about 1/3 of the units before another timeshare developer bought the remaining inventory to savlage the original developer's investment. Unfortunately, that original developer was also incompetent. C'est la vie.

I will probably get something between a few hundred and a few thousand for it when all is said and done. Given that I adopted it for free and was given a free year's usage, this is a pretty good deal. The whole owners, on the other hand, are completely screwed.

 

[Brian Noble]

how much they are trying to ruin their own product

I don't see it this way at all.

After all, the product is "timeshare points sold by DVD". We know that low resale values are not a make-or-break problem to a timeshare developer, and we know this because plenty of other developers are able to sell timeshares at similar valuations despite having low or no resale value.

What's more, if you believe the value of a timeshare is in using it, this makes no difference at all, becuase it does not change the value of using the timeshare. I think the product has value even for someone who plans to give it away for zero dollars, provided they own and use it long enough, and "long enough" is not "until it expires" but quite a bit less than that.

If you believe the value proposition required a particular resale value to make sense, then yes, this change begins to look material. But, this is only a very small example of the sort of thing that can happen to reduce the salvage value of a DVC contract. There are much bigger potential problems, and none of them are in my control. And that's why I have consistently argued that one should not rely on resale value to make a purchase make sense.

In other words: Number Go Up is almost never a good planning basis over a long enough time horizon, and DVC ownership is typically something with such a horizon for most owners.

 

[WinterSolider]

There is one caveat … a direct point fire sale that rivals my beloved VGF purchase. I’ll drop what I’m doing, and run to call my guide.

I keep telling myself that they're finally going to pull the trigger to get Aulani sold out SOMEDAY, right?

......right......?

 

[mkatsy]

I keep telling myself that they're finally going to pull the trigger to get Aulani sold out SOMEDAY, right?

......right......?

If it happens… it will be like a sweater sale at Macys I’ll get in my car and drive directly to the Saratoga sales center I can overlook a lot of shenanigans if the discount is deep enough.

 

[WinterSolider]

If it happens… it will be like a sweater sale at Macys I’ll get in my car and drive directly to the Saratoga sales center I can overlook a lot of shenanigans if the discount is deep enough.

Saratoga? I'll get in my car and drive directly to the Aulani sales center. Sometimes you gotta Live Aloha, know what I'm saying?

 

[gvel]

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.

 

[WinterSolider]

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.

Eh, it comes down to the idea of consumer surplus.

If I pay $4 for a sandwich that I think it so good it's worth $10, I'm still going to buy it if they raise the price to $5. And if they raise the price again to $6. And if they add some element of inconvenience that makes it only worth $9. As long as my utility exceeds the cost, I'm going to keep paying no matter how much I grumble.

 

[Brian Noble]

When there’s no pushback

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.

 

[AstroBlasters]

I keep telling myself that they're finally going to pull the trigger to get Aulani sold out SOMEDAY, right?

......right......?

I mean… I think they already did… https://www.disboards.com/threads/aulani-with-current-incentives.3859996/

 

[zavandor]

This is my feeling, it’s only one step towards devaluing my contracts, but it’s an ominous one. DVD is willing to shake the money tree in yet another way that decreases the value of my resale points if I ever want to exit.

That's the second step forward devaluing your contract, the first, bigger, one was the resale restrictions.
(I'm not counting the blue card benefits, because DVD is entitled to do what they want with their marketing budget).

 

[mkatsy]

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."

“So very ordinary” = all the timeshares do it. I chose a brand that stood out amongst its competitors because they (historically) did not participate in this behavior. Obviously the location (on property & the IP) were the initial draw, but the last push to overcome the “ timeshare hesitation” was their track record on junk fees. If you are well immersed in traditional time shares, of course this would be a non issue. You have experienced this with every brand you have done business with, but for this brand it is new behavior. It’s not about not wanting to spend money, it’s about the uncertainty regarding their intentions. Their lack of any meaningful communication only further exacerbates the uncertainty.

 

[WinterSolider]

I mean… I think they already did… https://www.disboards.com/threads/aulani-with-current-incentives.3859996/

Yeah well I missed that one, jerk.

 

[BeachClub2014]

“So very ordinary” = all the timeshares do it. I chose a brand that stood out amongst its competitors because they (historically) did not participate in this behavior. Obviously the location (on property & the IP) were the initial draw, but the last push to overcome the “ timeshare hesitation” was their track record on junk fees. If you are well immersed in traditional time shares, of course this would be a non issue. You have experienced this with every brand you have done business with, but for this brand it is new behavior. It’s not about not wanting to spend money, it’s about the uncertainty regarding their intentions. Their lack of any meaningful communication only further exacerbates the uncertainty.

Their intentions are pretty clear: build timeshare resorts and sell them for as much profit as they can, while providing a quality product. This fee doesn't change that.

This new fee doesn't impact current owners at all. Some will say that the fee "devalues" their current contract. That's just smoke. If a contract seller agrees to accept less money for their contract as a result of this fee, then that's kinda silly.

The only people impacted by this fee are those purchasing resale.

 

[mkatsy]

. This fee doesn't change that.

Yes, “this” fee does not … but can you share with us what you know about future fees, or even any planned increase in this fee? … you don’t know, and therein lies the uncertainty.

 

[BeachClub2014]

Yes, “this” fee does not … but can you share with us what you know about future fees, or even any planned increase in this fee?

Sure, happy to do so. There will likely be additional fees, and this one is likely to go up, but none will be the demise of DVC.

 

[mkatsy]

Sure, happy to do so. There will likely be additional fees, and this one is likely to go up, but none will be the demise of DVC.

“Demise” is an extreme word chosen for dramatic effect. I have not seen anyone suggest that DVC will be selling for $1 on eBay.

 

[BeachClub2014]

“Demise” is an extreme word chosen for dramatic effect. I have not seen anyone suggest that DVC will be selling for $1 on eBay.

I've seen many comments about how devalued their contracts are and how DVC is actively trying to lower values to minimize the resale. I've seen lots of comments about money grabs and greedy executives, so if you find my use of the hyperbolic word "demise," then I offer an apology.

 

[Carouselofplanning]

I've seen many comments about how devalued their contracts are and how DVC is actively trying to lower values to minimize the resale. I've seen lots of comments about money grabs and greedy executives, so if you find my use of the hyperbolic word "demise," then I offer an apology.

They are. The moves are being made to make people buy direct. That’s all it is. You passionately like that while others passionately don’t.

 

[BeachClub2014]

They are. The moves are being made to make people buy direct. That’s all it is. You passionately like that while others passionately don’t.

I don't "like" the fee, I just don't see it as a huge negative, unless I was buying resale, which I am not.

And of course, DVC is pulling levers to encourage and entice people to buy directly. To think they would/should do differently doesn't make sense.

 

[Chili327]

I don't see it this way at all.

After all, the product is "timeshare points sold by DVD". We know that low resale values are not a make-or-break problem to a timeshare developer, and we know this because plenty of other developers are able to sell timeshares at similar valuations despite having low or no resale value.

What's more, if you believe the value of a timeshare is in using it, this makes no difference at all, becuase it does not change the value of using the timeshare. I think the product has value even for someone who plans to give it away for zero dollars, provided they own and use it long enough, and "long enough" is not "until it expires" but quite a bit less than that.

If you believe the value proposition required a particular resale value to make sense, then yes, this change begins to look material. But, this is only a very small example of the sort of thing that can happen to reduce the salvage value of a DVC contract. There are much bigger potential problems, and none of them are in my control. And that's why I have consistently argued that one should not rely on resale value to make a purchase make sense.

In other words: Number Go Up is almost never a good planning basis over a long enough time horizon, and DVC ownership is typically something with such a horizon for most owners.

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.