New Procedure and higher Price for add-ons through DVC

[disneyberry]

<font face="times" size="+0">Liferbabe, I really think what flagged it for Disney to exercise ROFR was the fact that the Seller was paying the closing costs.

LisaSt, sorry to hear you lost the contract. The Disney waitlist might take a while. In the meantime, why don't you try again at a different resale? This time make sure you pay the closing costs. Good luck.</font>

 

[LisaSt]

The MF's were paid for allready it was a FEB useyear so it went along with our HHI contract. We offered to pay closing this was quite some time for the contract to go anywhere as the seller was on vacation with their kids they live in the same province as we do. just a couple hours away so we had to wait for them to return home. It was about 2 weeks till Disney decided to excercise ROFR or so the seller says. we had signed the deal back in the begining of July but then they went on vacation and didn't submit it till the end of July.

 

[jel0511]

Originally posted by LisaSt
Disney just took ROFR on our BWV contract we were attempting to buy. Seller paid closing and they had 58 points left from 04 and all of 05 left. We were trying to get it for 73.25/point it was a 150 point contract so there is somewhat of a baseline on what they are buying back at.

This makes me VERY nervous about my resale at BWV. Our contract is pretty identical to yours. 30 points from 04 and all of 05 left. Our offer was accepted at $71.50 per point, and we're paying closing costs. Seller is going to pay the 04 maintenence fees of the remainder 30 points. That works out to $74.50 per point, assuming $450 in closing costs. I hope it makes it through, but based on this news, it's hard to believe it will make it through.

 

[LIFERBABE]

Liferbabe, I really think what flagged it for Disney to exercise ROFR was the fact that the Seller was paying the closing costs.

Disneyberry, I agree as closing costs contribute to the total cost per point. Closing would have added another $3 ppt to her contract. At $76.25 it would have most likely gone thru before the price increase.

LisaSt. thanks for posting. So it looks like your total cost ppt. was $73.25 because the seller paid maintenance fees and closing. Were there any other costs that you were picking up? I cant think of any but you never know.

That would have been attractive to DVC even without the price increase. I've guesstimated that their low end is around $10 ppt considering all the factors. It seems from previous posts that when you get around that number it gets iffy. Just my opinion based on what Ive read and what my guide said not fact.

Also remember that you can counteroffer and raise the price if DVC excercises ROFR.

 

[brunoflipper]

makes me so glad we bought last month... i am pretty sure our 300 point contract (with 300 banked and all 300 for '04) @ 70/pt would never have gotten through... the question is have the independent brokers reflected the change in their prices yet?

 

[mydogdrew]

We closed 3 weeks ago on a BWV 200 point contract for $76 which included all 2002-2004 points. We paid closing ($500) and dues on 2004 only. Clearly they are focused on closing costs or they would have taken ours. For whatever reason they don't seem concerned about banked points even though that's the most important part as a buyer!

 

[jel0511]

Well, after reading about the BWV contract that Disney exercised ROFR on, I decided to add my name to the list at DVC. Our contract is just so similiar and only $1.25 more per point, I'm afraid it's going to get eaten up. So, the waiting continues, and the more nervous I get.......

 

[DIZNYFAN]

Great so I guess I should call and add my name tot he list also. I am waiting on a ROFR for VWL at 71.05 a point all inclusive seller paying closing and MF's. I had a BWV that I was working on but at a much higher price so I bailed on that and am working on the VWL now.

 

[msdis]

 

[Skip Wiley]

Wow, what a change, we just got in under the wire yesterday with a 109 pt BWV add-on. I'm assuming it was $84 per point, but I'll have to double check that tomorrow. I know the points are there because I already used them The new system sounds fair, I think it's an improvement.

 

[InstImpres]

Originally posted by msdis
And a $500 non refundable deposit, do I look stupid? So I told her no.

The deposit was always refundable. I believe by law you have 72 hours from signing to change your mind. Unless something has changed they can't make it non-refundable.

My guide told me they had been doing the cc's because they would "earmark" the points for the next person on the waitlist and the guides could play phone tag with them, than they took a few days to decide and then turned it down. She made it sound like this process could take weeks and often they would go through several people leaving them carrying points for months. My impression was the cc was to show you were serious.

JMHO
Sandy

 

[manning]

We don't plan to sell but if we had to.......oh boy oh boy ........ we hit the break even point.

 

[LIFERBABE]

When I spoke with Judy Kaufman today she explained that I would need to tell her how many points I wanted and when they became available, my credit card would be charged for the $500 deposit, my guide would then receive notification via email/Vocera that a sale had posted and then the guide would contact me to let me know that I have the points. So basically, They have removed the guides from the acquisition process.

This new system seems more like "Im ready to buy now" than
"put me on the list and call me" as it was before. They have this list of people willing to pay $89 ppt and they have approval to charge the cc when points become available. They will use ROFR to fill these orders. I wouldnt get on the list unless you want points right away.
I think the months of waiting for an add-on will end with this new policy and price increase. With the increase/new policy, they have more control over their inventory, where before the resale market was controlling their inventory.

 

[LisaSt]

So it sounds like they may go through the list to see what people are looking for in a contract and excersice ROFR geared by what they have requests for. So highly sought locations like BCV and VWL and BWV may get ROFR excesised as they will make Disney more money directly than say OKW will.

 

[LIFERBABE]

Although hot sellers, the OKW contracts stayed on DVC's inventory longer than the smaller resorts. I have been adding on in the last couple of weeks, (SSR and BWV) and was calling my guide weekly to check on point availability (wont have to do that anymore) there were several times when she had OKW show up in inventory.

They were always gone when I checked back but I think the new system will be more demand based then strictly price driven. The BCV, BWV, and VWL points were gone in seconds not days. There are many very large OKW contracts out there more so than the newer resort when the purchase requirement was lowered, so one ROFR contract could meet the demand of several on the waitlist wanting a small add-on.

I think it would be counterproductive for DVC to just start buying up inventory based on price alone. They are basically using other people's money to ROFR contracts and they won't hold inventory. In my opinion, those wanting to purchase at HH, Vero and to a lesser degree OKW have more of a chance of getting the good deals to go thru than those wanting to buy BCV, BWV and VWL.

JMHO
LIFER


__________________

So it sounds like they may go through the list to see what people are looking for in a contract and excersice ROFR geared by what they have requests for. So highly sought locations like BCV and VWL and BWV may get ROFR excesised as they will make Disney more money directly than say OKW will.

 

[LisaSt]

That is to funny I guess great minds think alike or is it DVC minds think alike. I agree though I am sure the HH and VB and OKW purchases will still have an easier time getting past ROFR than the others will.

 

[Beca]

I don't know about that, LisaSt...it could be, but I have a different theory...I think SSR sales are going much faster (and stronger) than anticipated. They are finding themselves in a situation where they are trying to pre-sell units which are not completed (and therefore have no "current" points to use). I think they might find that a bit of a difficult and unappealing thing to sell...hence the promo...buy at SSR starting next year, and we will give you a free vacation anywhere but SSR right now. I think DVC is trying to 1) slow down the sales of SSR a bit until the construction can catch up, 2) increase inventory so that when a buyer comes in, they can offer them SSR in 6 or so months, or BWV now, 3) actually perform a customer service to keep existing members happy and "acquire" small amounts of add-on points for them when people find they need more points (which they inevitably do ).

In spite of the fact that DVC can make a killing from people who buy resales and finance thru them, I don't think DVC is clearing very much if they offer these properties at $84 per point when you don't include financing. I think that is why the price increase occured (also to make "sold out" properties and SSR similar in value...the "sold out" properties, when available in large numbers cannot be too cheap or they will virtually halt sales of SSR).

So, while I feel that getting BWV, BCV or VWL through ROFR will be tougher than OKW, I think we will see DVC buying a LOT of properties back in the next few months to try and build inventory of ALL properties. I also predict that we will see a LOT of "newbies" on this board who buy places other than SSR on a regular basis. The "Wow...I snagged an initial contract at BWV...how lucky am I?" posts may become a thing of the past.

While I am NOT excited about the price increase, I am VERY excited about the thought of actually getting my add-on sooner rather than later. I also suspect that if you want points at some of the smaller resorts (VWL, BCV) you BETTER get them sooner rather than later. As people who have "add-on-itis" (i.e. loyal DVC'ers who KNOW they love vacationing there, and plan to do so for many years) snag up the newly available points, I think that over time we might see the number of available contracts dwindle. I know many people will disagree with me on this one...divorces,deaths, illnesses, and financial problems do occur...but, I still the number of points going out will be greater than the number of points coming in...and that eventually leads to a deficit number.

I really feel badly for the realtors who have made a business of specializing in DVC resales...I think their well may be about to run pretty dry...at least for a while. I had heard that DVC might even begin to purchase contracts from people trying to sell (at a pre-set price). That would be great (easy to buy...easy to sell) for everyone except the re-sellers!

Anyway...it's just my theory...I thought I would throw it out there!! Any other comments....please feel free to respond!!!



Beca

 

[tjkraz]

Originally posted by Beca
In spite of the fact that DVC can make a killing from people who buy resales and finance thru them, I don't think DVC is clearing very much if they offer these properties at $84 per point when you don't include financing. I think that is why the price increase occured

That was my thought exactly. When I first read several months ago that DVC had changed the add-on process to the disadvantage of members, my immediate thought was that they simply weren't making enough money off of the add-ons.

Now we get a $5 price increase coupled with a renewed emphasis on DVC's ability to facilitate add-ons at these properties.

IMO, this is just par for the course with the management changes last fall. Jim Lewis (that's his name, right?) is experimenting with different aspects of the program and the revenue streams they generate.