New $500 Resale DVC Transfer Fee

[Dodgerburt8]

Easy. These are identical goods (point contracts) with many, many different sellers and buyers. So demand is going to be one of the largest drivers of price. The $500 fee tacks on an additional costs that is going to move some potential resale buyers over to direct and some to not purchase. Again, as I've suggested, I think these percentages are small, like 5-10%, and will be mostly focused on smaller contracts. But let's say you and five other sellers have 50 point Poly contracts for sale. (This is what is on DVC for less right now.). And the average price is around $175 for non-stripped contracts. (This is also what is on DVC for less right now). Now if you remove 5-10% of potential buyers (they go to direct or they decide the extra $500 makes the deal no longer worth it), this means that, on average, these contracts at $175 will sit on the market for a little longer. And as they sit, there's a good chance that one of those sellers is going to take $6 or even $8 off per point to see if that will sell the contract. And then you suddenly have a slightly lower price floor that advantages the one seller who dropped the price somewhere in the high $160s. And not long after this brokers with other contracts are going to call other sellers and explain that the price point for resale is dipping slightly, and if they want to sell, they might want to drop their price a little as well. And that's how this would happen. Slightly fewer sellers, slightly less demand, slight downward dip in prices, etc. as a way to better capture potential buyers out there.

Thank you!

 

[Sandisw]

Never said I couldn’t afford it, I said I was on the fence for several years before pulling the trigger. I don’t understand the impulse of many in this thread to to be so obtuse over an obvious principle that is accepted as common knowledge in other aspects of life. Price has an effect on purchasing. All else equal higher price equals less sales. Are you so eager to defend the mouse, or so afraid of admitting DVC may not be quite as good today as it was last month? It’s ok, nobody is saying we made a bad decision buying a time share because of this new fee. Personally I’m still happy to own my contract, just annoyed that Disney continues to do things that devalue that contract should I want/need to sell.

Also the idea that the upfront cost is pennies is a gross overstatement. Unless you’re just talking VB. Yes the fees exceed the upfront cost over the course of a decade or more, but opportunity cost and time value of money make the initial investment (at least on the more expensive resorts) a significant portion of the total investment.

For me, I’m looking at it from the lense of the majority of the buyers who are looking at resale starting now.

That $500 is part of it now so they can’t compare it to what they would have paid last year or the year before.

Prices in resale go up and down all the time because every seller has a different goal for what they want.

Look at the different prices that people pay for the same resorts and similar contracts.

So, how much will this new fee impact selling price or the number of contracts bought?

I think some of us just believe that any impact that might happen will be negligible because ultimately, the bulk of new owners who are buying are still comparing it to savings over cash stays.

ETA: it will be interesting to see the sales numbers from the resale brokers for January and see how it compares to last year.

 

[BeachClub2014]

Price has an effect on purchasing. All else equal higher price equals less sales. Are you so eager to defend the mouse, or so afraid of admitting DVC may not be quite as good today as it was last month? It’s ok, nobody is saying we made a bad decision buying a time share because of this new fee. Personally I’m still happy to own my contract, just annoyed that Disney continues to do things that devalue that contract should I want/need to sell.

The challenge is that there really is no way to measure "lost" sales due to the new fee. I'm not sure the premise that higher prices result in fewer sales holds water in the DVC landscape. DVC has sold an average of around 2,000,000 points a year over the last decade and continues to raise the price almost every year.

We also continue to see the idea that somehow our contracts have been devalued as a result of this fee. Can someone point me to any facts that support that? I don't feel as if my contracts are valued less now.

 

[Dodgerburt8]

For me, I’m looking at it from the lense of the majority of the buyers who are looking at resale starting now.

That $500 is part of it now so they can’t compare it to what they would have paid last year or the year before.

Prices in resale go up and down all the time because every seller has a different goal for what they want.

Look at the different prices that people pay for the same resorts and similar contracts.

So, how much will this new fee impact selling price or the number of contracts bought?

I think some of us just believe that any impact that might happen will be negligible because ultimately, the bulk of new owners who are buying are still comparing it to savings over cash stays.

ETA: it will be interesting to see the sales numbers from the resale brokers for January and see how it compares to last year.

That makes sense. Comparison to cash stays is definitely the primary driver. It will be fun to see if there is a notable shift in average prices.

 

[Dodgerburt8]

The challenge is that there really is no way to measure "lost" sales due to the new fee. I'm not sure the premise that higher prices result in fewer sales holds water in the DVC landscape. DVC has sold an average of around 2,000,000 points a year over the last decade and continues to raise the price almost every year.

We also continue to see the idea that somehow our contracts have been devalued as a result of this fee. Can someone point me to any facts that support that? I don't feel as if my contracts are valued less now.

You are definitely right that there is a measurement problem. No way to really know if a notable change in resale prices (if there is one in the next few months) is caused by the new fee or something else. But it would be pretty unusual for DVC resale to not behave like almost everything else in the economy.

 

[mkatsy]

We also continue to see the idea that somehow our contracts have been devalued as a result of this fee. Can someone point me to any facts that support that? I don't feel as if my contracts are valued less now.

Sales data is reported monthly by brokers. Today is only the 8th, you’ll have to wait for month-end close to see the numbers. Even then, it’s just the data, there is no explanation from buyers or sellers as to why they agreed on a price. The best you can do is try to infer if a rise or dip correlates to an “event”.

 

[muppets3d]

Even if DVC instituted a change that made our contracts worth $0 on the resale market like pretty much every other timeshare, what recourse would we have? There is no guarantee in our contracts anywhere that our points will have value on the after market is there?

 

[Dodgerburt8]

Even if DVC instituted a change that made our contracts worth $0 on the resale market like pretty much every other timeshare, what recourse would we have? There is no guarantee in our contracts anywhere that our points will have value on the after market is there?

True, but that doesn’t mean we have to like it.

 

[BeachClub2014]

Sales data is reported monthly by brokers. Today is only the 8th, you’ll have to wait for month-end close to see the numbers. Even then, it’s just the data, there is no explanation from buyers or sellers as to why they agreed on a price. The best you can do is try to infer if a rise or dip correlates to an “event”.

Agreed. That's kinda my point. The idea that our current DVC contracts have somehow been devalued or that there will be a meaningful dip in either price or volume of resale contracts is just speculation. Fun to debate, but without any real foundation.

 

[mkatsy]

Agreed. That's kinda my point. The idea that our current DVC contracts have somehow been devalued or that there will be a meaningful dip in either price or volume of resale contracts is just speculation. Fun to debate, but without any real foundation.

Yes and no … there is a logical argument that buyers are going to pass the cost of the fee onto the seller by reducing their offers on contracts. All it is going to take is for a few buyers to accept the lower offer and the comp value begins to erode. This happens in traditional real estate, so it’s not hard to imagine it happening in timeshare real estate. However, there is also the logical argument that after a bit of time has passed, new buyers to the market will never have known a time that the fee didn’t exist, and will not factor the fee into their offers. your guess is as good as mine.

 

[maui22]

The problem with judging sales for January is demand was pulled forward. Brokers reported increased sales in December because many rushed to buy.
Same thing happens with direct. For example, BLT, VGF, PVB all experienced sales surges when guides started telling people sales were in the end game. Watch what happens when guides start telling
people Riviera is nearly sold out.

FOMO is a very strong emotional response.
In this case buy in December or miss out on saving $500. In some period of time new resale buyers will be thrilled to save thousands of dollars going resale. They will see the savings.

 

[mkatsy]

The problem with judging sales for January is demand was pulled forward. Brokers reported increased sales in December because many rushed to buy.
Same thing happens with direct. For example, BLT, VGF, PVB all experienced sales surges when guides started telling people sales were in the end game. Watch what happens when guides start telling
people Riviera is nearly sold out.

FOMO is a very strong emotional response.
In this case buy in December or miss out on saving $500. In some period of time new resale buyers will be thrilled to save thousands of dollars going resale. They will see the savings.

Ugh, another layer of complexity. I’ll just wait for someone that has spreadsheets and pretty graphs to tell me the answer.

 

[VGCgroupie]

Ugh, another layer of complexity. I’ll just wait for someone that has spreadsheets and pretty graphs to tell me the answer.

Wheres ehh when you need him

 

[HyperspaceMountainPilot]

Wheres ehh when you need him

lol, I was contemplating tagging ehhh in when I read the post too.

Ultimately, we’ll never be able to definitively answer the question because a lot can change on the Disney, macroeconomic, culture, “trends” month to month that is going to skew sales…to say nothing of seasonality, promotions on direct, etc. but generally speaking, at least part of that fee is going to be backed out of sales costs, unless buyers have decided that they are willing to, on average, pay $500 more per contract than they were last year. I don’t know if it will be dramatic enough that anybody notices it on premium properties in larger contract sizes…a small VB, HHI, or AUL contract could suffer the most.

 

[sethschroeder]

Even if DVC instituted a change that made our contracts worth $0 on the resale market like pretty much every other timeshare, what recourse would we have? There is no guarantee in our contracts anywhere that our points will have value on the after market is there?

They legally are responsible to maintain the best interest of the membership. Purposefully deciding something that is negative to the membership as a whole would likely be something that would get challenged.

Every once and a while some voices on this sub want to say "Disney can do whatever they want" when that is not the reality.

$500 is high but not high enough to be unreasonable. If it were to be $1k or more than it gets in the area of the fee being more than just for covering the costs of the actions and quite possibly you then see it get challenged.