New vs. re-sale

[MKM X3]

DH and I are considering a DVC purchase. We are still in the research phase.

What are the pros/cons of buying re-sale? We did the open house at Boardwalk last month, but honestly would rather have our home resort at WL. I understand that the only way to get into WL is through re-sale. I've looked at some re-sale offers, all of which are below the current $84/point offer on new sales. This just seems like a no-brainer to me. Is there a downside that I haven't discovered yet?

 

[mickeyc]

At current marke prices you should be able to save 15% to 20% purchasing a resale. We have purchased resale and you are treated the same as person who buy directly from Disney.

There are factors to consider in your offer.

1) Number of points available and not barrowed

2) You will be paying a closing fee. Neg. with seller

3) Maintanence fees are also neg. depending upon points available on the contract.


I would also suggest in addition to this board you check out www.tug2.net. You will obtain a wealth of information from other timeshare owners. We purchased our DVC contract via resale and saved thousands. Check out the tug classified section and the Timeshare Store inventory. We purchased our first DVC contract from them and were very satisfied. Good luck I am sure you will find something!

 

[Maistre Gracey]

Pros for buying through DVC:

• Convenience... Just pick up the phone, and order up some points.
• Get the exact number of points you want.
• Get the exact use year you want (probably).
• Financing options.
• Gain the use of your points instantly.
• No negotiating over banked & borrowed points.
• No wondering about ROFR.
• The Magical Beginnings option.

I am sure there are just as many on the other side...
Good luck....

 

[vernon]

If you're after VWL, then resale is pretty much your only option. IMHO if you can find one with banked points at a decent price, it is indeed a "no brainer"

 

[Dean]

To add a few thoughts. If you buy resale, you'll have about $500 extra closing costs. You have only two commercial financing options I can think of, Home Equity or other personal bank loan and a company called Tammac. While I agree that Resale is the way to go for all but maybe SSR resort and possibly BCV at present, you should look at each resale offering and decide it's value based on points available and specifics of the deal. I'd disagree on the current savings though, I'd put it more around 15% max, 10% is more realistic. That's not to say you wouldn't get lucky but to get it at 15% or more cheaper, you're going to need to play hardball AND take the chance that DVC might really buy it out from under you. Of course the points availability will make or break any deal at a comparable price.

 

[ArnyVee]

As some have mentioned, look for contracts with 'banked points' that you could potentially rent out to others. This could be your own 'built-in' Magical Beginnings program. Which would bring your total cost per point down and make the deal even sweeter.

 

[lacool]

The hardest part of buying resale for me was the wait. Buy from Disney and you can make reservations immediately. Buy resale and you must wait 6 - 8 weeks for closing and another week to have your info entered into the Member Services computers. Check out Arny's thread about his resale for a very good timeline on the process. http://disboards.com/showthread.php?s=&threadid=386681

With that said, I got a great deal with banked points at the resort I wanted by going resale. I'd probably lean towards resale again when I eventually add-on. Good luck with your decision!

 

[MKM X3]

Originally posted by Maistre Gracey

[[*]Get the exact use year you want (probably).
[[*]No negotiating over banked & borrowed points.
[*]No wondering about ROFR.
[*]The Magical Beginnings option.

Lots of great info everyone, which leads me to more questions...

Does use year really matter that much? Why?

By "banked & borrowed" points, do you mean that I could potentially wind up with 2 years worth of points when we buy OR no points for next year, depending on what the previous owner did? How do I find out?

What is ROFR?

What is the Magical Beginnings option?

Sounds like I didn't pay much attention at my tour, huh?

Also, I know Disney has first option to buy on re-sales. How often does this happen? What does Disney do with the re-sales that they purchase? Are they resold at the same current offer of $84/point?

 

[lacool]

Wow. I see you've been thinking!

I'll start with ROFR since you answered your own question. Right of First Refusal is the official name for Disney's right to buy back a resale at the buyer's offering price. The frequency of this varies, and a lower price may go through on a contract that is stripped (no banked or current points) vs. a contract that comes with lots of banked points. And yes, Disney turns around and resells these contracts at the current market price, generally to folks who are waiting for points to become available at a sold-out resort.

Regarding Banking and Borrowing, the resale listing should tell you the status of the points on the contract you are considering. One with banked and current points available will probably cost you more than one on which the current owner has used up all of this year's points (or even borrowed all from next year). You can end up with as many as two years worth of points to use up, or you can end up not being able to travel until next year.

Magical Beginning (often referred to as MB on this board) is Disney's incentive offer of $10 off the current selling price ($15 at Vero), if you sell back your first year's points to them.

Your use year may make a difference to you if you vacation at the same time every year. It only comes into play if you have to cancel the trip. If you have a September use year, but cancel a July trip, you only have until August 31st to use up your points before they expire. Most people suggest a use year that falls a month or two before your usual vacation time. That gives you many months before they expire if you do have to cancel your vacation for some reason.

Don't think you missed anything on the tour. These are generally not things that Disney chooses to mention when giving the tour. I didn't know there was such a thing as a resale market until I found the DisBoards! Any other questions?

 

[MKM X3]

Originally posted by lacool
Wow. I see you've been thinking!

Don't think you missed anything on the tour. These are generally not things that Disney chooses to mention when giving the tour. I didn't know there was such a thing as a resale market until I found the DisBoards! Any other questions?

Yes, of course! I actually asked about resale on our tour - it was glossed over with an emphasis on the cons.

Now for more questions...

1. How long does an average re-sale purchase take?
2. What are average closing costs? Is it possible to negotiate that the seller pay these?
3. Assuming we have a resale contract with current year points, how quickly can we access those points?
4. Regarding use year and cancelled trips, if we cancel a trip and are not able to use them before our year ends can't we just bank them for next year? If not, could we rent them?
And...
5. What are everyone's thoughts about re-sale vs. SS with the extended expiration date? It seems that SS would extend the life of our ownership for about 10 years (if the rumors I've heard turn out to be true). This definitely makes SS a more interesting prospect...thoughts?

 

[5infam]

I will try and take a stab at these:

1. How long does an average re-sale purchase take?

Roughly 2 months from start to finish. ROFR can be quick, but may take 30 days. Once that clears, you have to go through closing (about 2 weeks) and then maybe another week to get your member number (this is all variable though).

2. What are average closing costs? Is it possible to negotiate that the seller pay these?

It depends on the number of points you buy. I would say between $375 and $550. Everything is negotiable, but the ROFR is looking at EVERYTHING when they look at your deal.

3. Assuming we have a resale contract with current year points, how quickly can we access those points?

Again, once you get that member number, then you can make a reservation.

4. Regarding use year and cancelled trips, if we cancel a trip and are not able to use them before our year ends can't we just bank them for next year? If not, could we rent them?

There are banking windows which are as follows: within the first 6 months following your use year, you can bank 100% of that years points. Within 6 to 9 months of your use year, you can bank up to 50% of that years points. In the 10th month of your use year, you can bank 25% of that years points. In the last 2 months, you can not bank any points from that year. Finally, yes you can rent them out, but I believe this is really difficult if you cancel in the last 2 months.

5. What are everyone's thoughts about re-sale vs. SS with the extended expiration date?

IMHO, it really matters where you want to stay!! If you want SSR then I would go with it. If you want somewhere else, then go with that. I would figure out your age in those last few years and see if you think it will really make a big difference to you when you are 60, 70 or 80 years old(or older/younger, not sure what age you are now).