Poll: do you plan next DVC purchase resale

[ELMC]

I calculated the MF's all in today's dollars, not adjusting for increases and inflation (which we KNOW) happens. So I was being overly generous toward the resale side in the math. More to my point, that $3000 difference represents less than a 10% difference over the whole contract.

Yes, I understand where you are coming from and I'm not looking to argue the point with you, so I hope my comments aren't perceived that way. Looking at the extra $3,000 as a percentage of the overall expense does not change the fact that you are taking $3,000 in today's dollars out of your bank account and spending them right now.

My point is that I think it would be wise to stop looking at the $3,000 extra for purchasing direct as a percentage of a whole or as an expense amortized over 30+ years and to start looking at it like $3,000. I think when we start to do that, the difference becomes clearer. Your justification is akin to paying sticker price when you buy a new car (instead of trying to negotiate a deal) because when you include the cost of maintenance, repairs and gas over the 10 years you will own it, the extra money really is a small percentage of the overall cost. While that certainly is a way of looking at it, my contention is that it is a fallacious argument.

The question then becomes, when all is said and done, do you want an extra $3,000 in your pocket right now, or not?

 

[bighoo93]

My point is that I think it would be wise to stop looking at the $3,000 extra for purchasing direct as a percentage of a whole or as an expense amortized over 30+ years and to start looking at it like $3,000. I think when we start to do that, the difference becomes clearer. Your justification is akin to paying sticker price when you buy a new car (instead of trying to negotiate a deal) because when you include the cost of maintenance, repairs and gas over the 10 years you will own it, the extra money really is a small percentage of the overall cost. While that certainly is a way of looking at it, my contention is that it is a fallacious argument.

The question then becomes, when all is said and done, do you want an extra $3,000 in your pocket right now, or not?

This is a pretty good analogy. Since all the other costs down the line are the same whether you buy resale or direct, the whole issue comes down to $3000, right now. If whatever value you get from buying direct is worth $3000, you should do it. If it isn't, you shouldn't. Only you can answer that. But the percentage of the lifetime cost that the $3000 represents doesn't really matter.

 

[DVC Dude]

I fear Disney will see this thread and will further restrict the uses of resale points

I doubt they would make that decision based on a thread I started, but then again, you never k now.

There are many tangents on my original questions, so let me refocus the question.

Assuming you wanted to buy a particular resort (i.e. SSR, BLT, OKW etc) and a certain number of points (i.e. 100 or 200 points) --- would you buy resale or direct?

Too many people are comparing buying Aulani direct with SSR and they should be comparing SSR direct vs SSR resale. Of course, it may be hard to buy Aulani resale, but the other 10 DVC resorts have plenty of resales.

 

[ELMC]

I doubt they would make that decision based on a thread I started, but then again, you never k now.

There are many tangents on my original questions, so let me refocus the question.

Assuming you wanted to buy a particular resort (i.e. SSR, BLT, OKW etc) and a certain number of points (i.e. 100 or 200 points) --- would you buy resale or direct?

Too many people are comparing buying Aulani direct with SSR and they should be comparing SSR direct vs SSR resale. Of course, it may be hard to buy Aulani resale, but the other 10 DVC resorts have plenty of resales.

So to answer your question, I would only buy resale. There are situations where resale is not probable or terribly cost effective (VGC, VGF, AUL or a 50 point purchase at any resort). In those cases I would probably choose not to buy as the break even point on such a purchase is too far out into the future to be considered a good value for me.

 

[ssawka]

I doubt they would make that decision based on a thread I started, but then again, you never k now.

There are many tangents on my original questions, so let me refocus the question.

Assuming you wanted to buy a particular resort (i.e. SSR, BLT, OKW etc) and a certain number of points (i.e. 100 or 200 points) --- would you buy resale or direct?

Too many people are comparing buying Aulani direct with SSR and they should be comparing SSR direct vs SSR resale. Of course, it may be hard to buy Aulani resale, but the other 10 DVC resorts have plenty of resales.

Well, I think I exaggerated a bit, but Disney initially excluded resales from the Disney Collection because they were losing sales to resale. If this thread was a good sampling of potential buyers (it's not, I know!) then it seems that resales are more popular then ever. If that results in lower sales for Disney, I think it is just a matter of time before Disney devalues the resale contracts even further.

 

[nunzia]

Give it a few months

 

[nunzia]

I doubt they would make that decision based on a thread I started, but then again, you never k now.

There are many tangents on my original questions, so let me refocus the question.

Assuming you wanted to buy a particular resort (i.e. SSR, BLT, OKW etc) and a certain number of points (i.e. 100 or 200 points) --- would you buy resale or direct?
Too many people are comparing buying Aulani direct with SSR and they should be comparing SSR direct vs SSR resale. Of course, it may be hard to buy Aulani resale, but the other 10 DVC resorts have plenty of resales.

Yes, resale for those..as long as I understood the restrictions. Villas at the Grand Californian are FAR harder to get resale than any of the others..for me, that is the only resort that I think direct makes any sense (again, as long as the restrictions don't bother you)

 

[dvcterry]

Yes, resale for those..as long as I understood the restrictions. Villas at the Grand Californian are FAR harder to get resale than any of the others..for me, that is the only resort that I think direct makes any sense (again, as long as the restrictions don't bother you)

that was one mistake i learned from and that boat sailed very quickly not only is the direct waitlist way long but forget about finding resale in my UY.

 

[zakgrim]

I'll throw my experience into the ring. My wife and I talked with a DVC rep when we were in WDW this past February for the tail end of our honeymoon. It was the first time we'd heard about it, and were pretty interested in what we heard.

at the time they were selling BLT, and we decided to come back home and make a decision without the Disney magic all around us. We discovered the resale market at the beginning of summer and started crunching the numbers. We ended up buying 200 points resale at AKV, and here's our reasoning.

Buying direct, the cost per point (cpp) would have been $135. Buying resale, the cpp was $63. So right away we're looking at a 53.3% savings on ccp

So total cost would have been approx. $27K-28K for a 200 point contract if we bought direct (once you factor in closing costs). and we paid approx. $12,600-$13,000 when all was said and done with the resale. So the savings on the total contract was between $14,400 and $15,000 (~46% difference in total cost). That doesn't take into account interest payments on a direct purchase, which would increase the total cost. We paid in full for the resale so we didn't have to factor in loan interest payments.

Taking into account Maintenance Fees (MFs), it's the same whether you buy direct or resale. Currently MFs for AKV are $5.4356 per point (2012 MFs). So that's $1087.12 annually.

My wife and I are relatively young still, as we're in our late 20s. Because of that we both have friends and family that are getting married/starting to have kids/married with kids, which means we know a good amount of people that will want to make trips to WDW going forward. So we plan on renting some of our points each year to friends and family to cover the all/most of our MFs.

So there you have it. For us, the substantial (~46%) cost differential and the fact that we have friends & family that will want to rent points from us consistently made the decision easy. Our first purchase was resale and all subsequent purchases will probably be resale. The limits that have been put on resale contracts are a bit of a downer, but the Disney Collection and things like it aren't the most efficient use of points, so we were OK with the trade off.

Sorry for the long (first!) post, but I wanted to explain everything as thoroughly as possible. Thanks for sticking around through the whole thing, you get a gold star!

 

[ssawka]

I'll throw my experience into the ring. My wife and I talked with a DVC rep when we were in WDW this past February for the tail end of our honeymoon. It was the first time we'd heard about it, and were pretty interested in what we heard.

at the time they were selling BLT, and we decided to come back home and make a decision without the Disney magic all around us. We discovered the resale market at the beginning of summer and started crunching the numbers. We ended up buying 200 points resale at AKV, and here's our reasoning.

Buying direct, the cost per point (cpp) would have been $135. Buying resale, the cpp was $65. So right away we're looking at a 53.3% savings on ccp

So total cost would have been approx. $27K-28K for a 200 point contract if we bought direct (once you factor in closing costs). and we paid approx. $12,600-$13,000 when all was said and done with the resale. So the savings on the total contract was between $14,400 and $15,000 (~46% difference in total cost). That doesn't take into account interest payments on a direct purchase, which would increase the total cost. We paid in full for the resale so we didn't have to factor in loan interest payments.

Taking into account Maintenance Fees (MFs), it's the same whether you buy direct or resale. Currently MFs for AKV are $5.4356 per point (2012 MFs). So that's $1087.12 annually.

My wife and I are relatively young still, as we're in our late 20s. Because of that we both have friends and family that are getting married/starting to have kids/married with kids, which means we know a good amount of people that will want to make trips to WDW going forward. So we plan on renting some of our points each year to friends and family to cover the all/most of our MFs.

So there you have it. For us, the substantial (~46%) cost differential and the fact that we have friends & family that will want to rent points from us consistently made the decision easy. Our first purchase was resale and all subsequent purchases will probably be resale. The limits that have been put on resale contracts are a bit of a downer, but the Disney Collection and things like it aren't the most efficient use of points, so we were OK with the trade off.

Sorry for the long (first!) post, but I wanted to explain everything as thoroughly as possible. Thanks for sticking around through the whole thing, you get a gold star!

I think it is much easier to purchase resale when it is your first purchase rather than an add-on. Reasons:

1. For an add-on, you are usually looking for less points, which are sometimes hard to come by.
2. For add-ons, you usually want the same UY as you currently have for simplicity sakes. Not a requirement, but very helpful. This limits your choice of contracts.

 

[DVC Dude]

Well, I think I exaggerated a bit, but Disney initially excluded resales from the Disney Collection because they were losing sales to resale. If this thread was a good sampling of potential buyers (it's not, I know!) then it seems that resales are more popular then ever. If that results in lower sales for Disney, I think it is just a matter of time before Disney devalues the resale contracts even further.

I don't think there is one timeshare that makes sense to buy direct. Disney USED to be an exception, but that appears to have changed.

I'll throw my experience into the ring. My wife and I talked with a DVC rep when we were in WDW this past February for the tail end of our honeymoon. It was the first time we'd heard about it, and were pretty interested in what we heard.

at the time they were selling BLT, and we decided to come back home and make a decision without the Disney magic all around us. We discovered the resale market at the beginning of summer and started crunching the numbers. We ended up buying 200 points resale at AKV, and here's our reasoning.

Buying direct, the cost per point (cpp) would have been $135. Buying resale, the cpp was $63. So right away we're looking at a 53.3% savings on ccp

So total cost would have been approx. $27K-28K for a 200 point contract if we bought direct (once you factor in closing costs). and we paid approx. $12,600-$13,000 when all was said and done with the resale. So the savings on the total contract was between $14,400 and $15,000 (~46% difference in total cost). That doesn't take into account interest payments on a direct purchase, which would increase the total cost. We paid in full for the resale so we didn't have to factor in loan interest payments.

You are a perfect example of FUTURE new DVC members.....resale buyers.

Way back in 2004-2005 the spread between resale and direct was only 15% or so (thus it made sense to buy direct) and now it is more than 50% (it makes far more financial sense to buy resale for most people).

Welcome to the Disney family, but you have not done anything to boost the Disney profit machine (don't feel bad as I would have done the same). Sure, you took over someones contract, but Disney LOST the new money sale to a current member. If this trend continues and I see no reason for it not to, then DVC will begin to head down the same path as all other timeshare companies - they will lose most new sales to resale buyers.

This, of course is a supply and demand issue. If there are no resale contracts available, then new members will only be able to buy direct. Also if there are few resale contracts and lots of buyers, the price will go up. When there are a glut of resale contracts for sale, the prices go down and anyone with a simple Internet search will realize they can save HUGE money buying resale vs buying direct from Disney.

Of course, if Disney keeps building new resorts, they are pretty good at selling those locations (ie over existing resales) and there will be no resales for a few years.

Either way, it is my personal belief that the resale market will become a larger thorn in the foot of Mickey Mouse and they will either have to focus on new resort sales (that has been the trend since day one, but will it ever hit a wall), offer new perks to direct buyers (this is a great idea, but most perks will not help overcome a 50% upcharge over resale), impose more restrictions on resale buyers (i.e. this is where I predict that one day resales will be LIMITED to their home resort only or the 7 month window will shrink to 2-3 month window or they will exclude the newer resorts).

 

[montrealdisneylovers]

I posted this on another thread with a similar topic and decided to repost it here.

I still believe that Disney is shooting itself in the foot with resale restrictions.
Rather than further restricting resales, I believe that Disney should remove the current restrictions, thus increasing the value of resales, removing the negative timeshare stigma and allow DVC to going back to the quality type of timeshare it was not that long ago.

It seems that more people bought direct before the resale restrictions came into play and lowered the value of resales. I believe that more people would prefer to buy from Disney if the price discrepancy were not so great. I know I would prefer to deal directly with Disney for a reasonable price difference. It would also be nice to know that my "investment" would not be worth half the minute I signed on the dotted line. It is nice to know that there is a reasonable after market for your contract. Right now, it is only reasonable if you buy resale!!!

 

[bighoo93]

Either way, it is my personal belief that the resale market will become a larger thorn in the foot of Mickey Mouse and they will either have to focus on new resort sales (that has been the trend since day one, but will it ever hit a wall), offer new perks to direct buyers (this is a great idea, but most perks will not help overcome a 50% upcharge over resale), impose more restrictions on resale buyers (i.e. this is where I predict that one day resales will be LIMITED to their home resort only or the 7 month window will shrink to 2-3 month window or they will exclude the newer resorts).

Or, the most obvious option, which is to stop demanding prices that are 100% above market value. We know market value, because the resale market tells us (and may overstate it a bit even, thanks to ROFR). The thorn in Mickey's foot isn't resales, it is basic economics. You are right that they can do things to shift things in their favor, but there are costs in terms of member satisfaction and brand reputation to doing things like de-valuing resale. Because the moment you purchase direct, your points carry the market value of resale, even though you have the benefits of direct.

I really don't get this notion that Disney simply must find a way to be the only one selling timeshare points. The whole business model of a timeshare is to take in enormous upfront payments plus annual lifetime fees. In Disney's case, it is also to secure a commitment from people to spend time and necessarily a ton of money around WDW. That's it. That's the model. It isn't to keep re-selling the same points over and over again. It isn't to make cash reservations on a Disney-owned property in perpetuity. They have their cash resorts for that. They willingly made the choice to expand into this business model. That means the upfront sales on a particular property end some day, just as they do for a developer who builds a property or resort. The company that built my home doesn't make any money if I sell my house.

I expect that Disney will be able to secure an extremely high premium for purchasing new GF villa points. It is a smaller resort on an elite property. This is how you grow the timeshare business and bring in more money. Not by de-valuing the share that you previously sold to people, in hopes of propping up your own prices to double the open market rate. I expect Disney to keep doing things like that over the next 30 years, at which point most of their existing timeshares expire, and they can start over there or something.

 

[ELMC]

As any timeshare salesperson will tell you, the value of a timeshare is in its use. Now obviously we know that although that is true, it is always nice to have an exit strategy. And once you consider exit strategies, it's nice to have one that doesn't have you losing 50% or more of your initial purchase price. But from a use standpoint (specifically at DVC resorts), a direct purchaser and a resale purchaser have contracts of equal value. That's from a use standpoint. Anybody who wants to consider the liquidity aspect of a timeshare will need to use a different valuation model in order for the purchase to make sense to them...and that's where resale comes in.

 

[ssawka]

I don't think there is one timeshare that makes sense to buy direct. Disney USED to be an exception, but that appears to have changed.

ITA! Provided you can find what you are looking for. I am currently looking at HHI contracts and they are few and far between. Also, it is almost impossible to find a small point contract.

 

[Missyrose]

I really don't get this notion that Disney simply must find a way to be the only one selling timeshare points. The whole business model of a timeshare is to take in enormous upfront payments plus annual lifetime fees.

Actually DVD makes it's money in direct sales, there's little profit in the maintenance fees.

And the parks, where DVC members spend even more money, are a completely different branch in a ridiculously large company, so the money you spend in the parks doesn't really have much to do with DVC/DVD.

This is all a long-winded way of saying the reason DVD will continue to restrict resale points is because selling points directly to customers is virtually the only way that branch of the Disney corporation makes money. And I say this as the owner of two post-restriction resale contracts.

 

[Lil' Grumpy]

oh my lil' disney wishes! these "observations" are as varied as
~where~ one is watching wishes,all over the park. inside &
out.

dear all/any dvc mangers, please be reading this section. i think
if you are experience & have the basic timeshares knowledge,
than you will recognize your future in dvc careers. and you
will be "seeing" the same thing behind the rationalizations and
self promotions. self evident~

this field of dreams vs the potential from restricting those
taking the resales route... is "plain & simple."

i think using a defaulted timeshare is a very poor comparison
& don't hold a candle. i 'get" the reasons why those doing the
resales and trying to "protect" their resales options. not
realistic or even on the same level. dvc must make changes
to protect their primary income. having a nice feedback does
not put food on the table.

sometimes i wonder, do you really understand the power/potential
sales you can produced with the only dvc with the most precious
connections. "walt disney world/& all it world wide establishments"
is superior to any other vacation.

like to help...hint, statistics are a "tool" that can "guide" your
ways to keep moving forward. a best friend, in~deeds!

surely when you read these arguments toward your properties,
..you recognized why they are so passionate to keep taking
advantage?

when you get @ it...dvc isn't about renting. renting for profits ,
and/or selling for a profit. we were/are a direct buyer. we
started in 2002 and did not buy til 2009. you didn't seek us
out, instead we came to you! we didn't buy to rent and
you let us walk --2002-- because we are professionals where
our points for some years would go to waste. we took
member cruises to learn about what we share with other
direct owners. we were shocked how naive so many
with years of experiences, had so little knowledge about
your base operations. however, not all your direct owners
are against learning the "operations" & especially what
going behind the "hidden curtain", mr. oz! or what you
go by...." the sales department". ( i have been keeping
track , with names of every encounter we have had
with your "people". ) and i think that "group"-not
all , needs internal reviews.

right or wrong ?! i am wary with anyone trying to compare dvc
with their outside time shares. dvc is a whole different world.
and that potential is "where" the skilful executives can
make their marks with changes/restrictions that will
build the dvc into the best/biggest empire beyond their
dreams. in turn write their own ticket. first question
on that test?~ what group that you getting
the golden eggs from? one guess.

because "you" are @ the dvc controls....think big & wonderful!
my suggestions is go wild on the restrictions but with only
one exception--keep their original contact promise of staying
in the resort they buy & offer trading with a few conditions that
are kept only for the direct owners. make us happy,
& we will be back...with our friends.

by the way, i am aware that i have been actively expressing
my observations --good & bad, with suggestions. i would not
be wasting my breath, if i was not impress with the main
structure. just a reminder, any structure is only as good as
the dedication from those doing the assignments. i do not
expect perfection but i do expect certain amount of
positive problem solving. we still feel very bad for our
original guide, as his illness was not his fault when your
system failed. i am in a professional business too -and it's
has the same common ground too---taking care of people.
and while yours isn't life & death , i think every owner-
be they resales or direct---their disney vacations are some
of their most precious moments in their life. nothing to take
for granted. we take care of every age group just like
you. and our only limit...is "all over the country" . however,
the "base line" does not, ever changed. that is, if your
backgrounds are outside is not a factor. for ex., if i was
in japan & hunger, happy, or even sad....they would
understand those feelings. my argument is this..."
no matter the relationship--love, friends, business,or
peers...trust or the loss of determine if it works. and the
primary behavior that destroy it , is lying. when i came
to your main office, i was lied too by a high level
manager. even debating simple issues, that is a negative
image , not deserving your employment. it also resulted
in us "paying closer attention". we have no confidence in
that department, and we have other owners with similar
disappointments. we are nobody in the big picture.
but when the nobodies are enough to become a
group, those permitting abuses are costing you!

why? anything negative is a loss. enough losses prevent
effective problem solving. fyi--ineffective coping is the
deficit that requires "fixing".

not can i stress how significant "reality" redirecting can
be toward successful problem solving. a long time ago,
we admitted an elderly farmer with major chest pain.
it was during the dog days of august. he was in
his 80's & had been farming all day. first thing was
get the heavy bids overall off. i found out he didn't
trust banks & it didn't take me long to figured out
the source of his chest pain....every pocket filled
with silver dollars--do you ever think how "heavy"
silver dollars are? cured his chest pain.

i would think that dvc value both resales & direct. why
resales...because they are still doing the parks. it
is income. but is there no argument that equals the
direct vs resales. c'omon dvc----it isn't about the
restrictions per say but the "where" they should being
doing them so you are demonstrating you are
recognizing/valuing both type of owners. the potential
growth for new sales depends on the "values"
you can present to new potential owners. and if
you don't , then don't be surprise when your sales
go south....because i am not seeking answers from
resales owners to tell me that direct are the same
as them--ask yourself this? which group "where"
your largest profits are coming from? if you are
a resales... show me as a direct owner , your
lower price should be on the same level? * not
on the timeshare level but the "disney" level
--for example , direct owners should be given
front of the lines passes...every time they
stay @ their home resort. ( has nothing to
do with the dvc timeshare usage).

psst direct owners, the list /possibilities for rewards
are nearly endless with the "right" dvc imagineer .
..all they need to do..is think about it.

 

[Msmithmd]

Wow lil grumpy. That one takes a couple reads.

An interesting opinion I guess. Not too often you see someone on here advocating for DVC to increase the disincentive for resale market buyers. Probably because most direct buyers understand that would further depress the resale market value, which hurts the direct buyer in case they ever needed to sell before contract expiration.

I firmly support the right of people to buy direct if that is what they wish to do, much as I support the right of people to buy a hot new model car at $3000 over sticker price to be one of the first to have it- if that is what they want to do. But people considering a major purchase have to understand just how much money is at stake when making that decision.

I personally would have been a direct buyer also, if the spread of direct versus resale was 10% or maybe even 15%. But for my purchase two months ago, the spread was literally 50%, and I just couldn't ignore that. So if DVD wants more direct buyers, they need to get their pricing more in line with the free market. Since timeshare sales are not really a free market (most direct buyers never even consider or know about resale,) there isn't probably much motivation for DVD to do this. They, as a rational business, will charge as much as the retail market will bear.

But I wonder how many of those retail buyers come to resent DVD when they find out how much less others have paid for materially the same product...

I guess lil grumpy and I can agree on one key point though as I reviewed his post: apparently the current direct buyer is at less risk of chest pain while wearing bib overalls, versus the resale buyer. For the direct buyer is much less likely to have a lot of excess silver coins to be carrying around, after making that purchase.

 

[DVC Dude]

Wow lil grumpy. That one takes a couple reads.

I personally would have been a direct buyer also, if the spread of direct versus resale was 10% or maybe even 15%. But for my purchase two months ago, the spread was literally 50%, and I just couldn't ignore that.

yea, lil grumpy went all gandi on us.

Again, your quote supports my hypothesis that MANY people that would normally buy DVC direct from Disney (and Disney would get to feed the machine with new cash) are now going to buy resale and deny Disney a cash infusion.

At first, the Mouse may not notice or care, but when critical mass begins to buy resale over direct, especially after they go on a DVC tour and then cancel their contract during the rescission period and buy resale, the Mouse will begin to miss some of that cheese. At that point, changes will occur.

 

[PoohsFan1]

Any future DVC pruchases would be resale only. $50-$60 per point is about all I want to pay so that eliminates any possiblity of ever buying direct.

This is how we are looking at it too. We bought our first 2 contracts thru Disney, but now that we want to add on, we want to buy through resale to save some money. Also, we really want to buy into BCV and I will only do that through resale.