Question about maintenance on a resale.

[DisneyKidds]

Currently working out an offer on a 150 point VWL resale with all 150 Dec 2000 points banked and all 150 Dec 2001 points available.

My question is about maintenance fees. The agent is saying that it is DVC policy that the buyer in this case has to reimburse the seller at closing for the maintenance fees for the Dec 2001 points that just came available. He indicated that we would not pay any maintenance fees on the Dec 2000 points.

Correct me if I am wrong - but I believe the part about DVC policy on the maintenance on the Dec 2001 points is a crock. We had made an offer on another Dec use year VWL contract where the seller was not looking for the buyer to pay the maint fees associated with the Dec 2001 points. Correct me if I am wrong - but I believe who pays the maintenance fees on the Dec 2001 points is negotiable between the buyer and seller. Please correct me if I am wrong.

We were willing to make a full price offer. If the seller wants us to pay the maint on the Dec 2001 points we may have to try to negotiate a lower price or get the seller to forget about reimbursement for these maint fees. However, we have not seen too many VWL resales and may not want to lose it if we offer less than full price and someone else walks in and offers full price plus reimbursement of these fees. Just venting. Decisions, decisions

 

[rbuzzotta]

I believe it can be negoitiated between the buyer and the seller. We chose to pay the entire years maintenance fees because we felt we got a great resale price plus a years worth of banked points.

 

[spruce]

I believe maintenance fees are negociable.(sp)
If all 2000 Dec points are banked and all 2001 points just became availlable, it doesn't seem like these owners got any (or much) use out of VWL. Didn't Disney just start selling VWL within the last year? If they didn't use it, I guess they want their money back for whatever reason. This one confuses me.....spruce

 

[EROS]

You're right. There's no "DVC policy" which applies; everything is negotiable. If you like the overall deal, I would go ahead and assume paying the maintenance on the Dec 2001 points. You're picking up the other 150 banked points maintenance free. Why try to squeeze water from rock??? JMHO. You're only looking at around $600 for the entire year. Why blow the deal for concern about an extra $50/month over the next year????

Good Luck,

 

[RobDoc]

There is no such DVC policy. All aspects of a resale are negotiable.

If you should pay those Dec maintenance fees, be aware that you will pay maintenance fees again in Jan for the year. The fees are due each Jan- unless you opt to pay annual dues with an auto debit from your checking account and spread it out over the entire year.

Look at the overall deal, assess the entire package and make a decision based on that. As EROS pointed out, you will be getting a full years points for the extra few $$. If you can get the contract for less than $65 per point- including closing costs, you will come out ahead of a direct buy thru DVC (with MB).

Good Luck!

 

[SleepyatDVC]

Also, keep in mind that with MB thru Disney, you lose all (??) your points for the first year. You won't have points until 12/2002 much less banked points from 12/2000!

When we bought our resales, they also came with banked points. So, we paid the maintenance fees for the current year and considered it a cost for "buying those extra points."

Everything is negotiable. You have to decide if it is worth it to you. You may find another contract that does not ask for 2001 maintenance reimbursement, but it may not have any banked points. Ultimately, what is your priority - is the price per point, the banked points you can get, or the total "overall value?"

Also, in a few weeks, you'll be "asked" to reimburse 2002 maintenance fees also no matter what contract you end up buying. Unless, it has borrowed points!!

If it were me - if the price is right, go for it - another "year's worth of accommodations" for $600.

Whatever you decide, good luck!

 

[DisneyKidds]

Ah! But is the price right. They want $72 a point. Without the banked 2000 points it is not such a good deal, not any cheaper than going thru DVC. However, with those points.....

Thanks for the input .

 

[RobDoc]

Make sure you do the math with this contract.

A direct-thru-DVC purchase for $150 points will cost 150 x $75= $11,250 total. It will likely have an Aug use year- so you will have 150 points to use right away and another 150 next Aug. The annual fees will be prorated- so you won't really owe any for the cuurent year. No closing costs.

The resale you mention at $72 will cost $10,800. plus $575 maintenance fees on this years points, plus closing costs (~$475) =
$ 11,850. Unless you can negotiate those closing costs or 2001 maintenance fees, you will actually pay more for the resale than a direct purchase- even without MB.

Good Luck!

 

[kem330]

Just to support Doc's statement- by the time you pay closing and maintenance it probably will be more or at best break even. Keep in mind the buyer probably paid $72/point (that was the original asking price I believe) and now has to pay a broker around $1500 to sell the property. Plus they paid dues for 2001 and will soon have a new bill for 2002. So unless they are seriously distressed, they don't have much negotiating room. Even if you don't pay 2001 dues, closing comes to $3/point which equals Disney's deal. And with a Disney purchase, you can make ressies right away. Don't get me wrong- resales are a great way to go- but not for VWL- not if you can get BW or OKW for $65-68/point.

 

[DisneyKidds]

I've run all the numbers, made an offer, and we are soon to be DVC owners at VWL .

As for the numbers. Disney would be $11,250 plus prorated maintenance for a total of approx. $11,500.

We negotiated a split on the 2001 maintenance. The resale will be $10,800, plus 2001 maintenance of $272 plus closing costs of approx $450 for a total of approx. $11,522.

What makes the resale better? 150 banked points from 2000. Basically, for slightly more money we get an extra 150 points. We can use them or rent them. The value of using those 2000 points or the money we get from renting them will make this a better deal than going thru DVC. Not as good a deal as we'd get on a BWV or OKW resale, but better than thru DVC on the VWL where we were definitely going to buy points. We can wait until Feb to make ressies.

My goal was to get a VWL resale for about $65 a point without closing cost. If I rent the 2000 points for $8 - $9 a point I've reached my goal. If we decide to use the points it is like getting a free week's lodging. Either way we can't go wrong.

We are looking to buy about 350 points total and will be able to get a better deal when we make an offer on a BWV resale. VWL resales are not as easy to find.

Thanks for all your help.

 

[Dean]

First, as noted, the closing costs are negotiable. If the dues that are due in Jan are not yet paid, they must be paid at closing. Ignoring the price per point, the neutral stance on the maint fees would be to pay the seller for at least a portion, if not all of the 2000 points assuming they are banked to the 2001 use year giving you 300 points as of 3 weeks ago.

If you are set on WLV, that's not a good deal. Your about the same price as directly through DVC and you have about the same points. Just to compare, with DVC and MB, you'd pay about the same in maint fees and have the 150 maybe August 2002 points but your overall price would drop to $9750 plus the maint fees. You lose the issue of DVC financing and don't get to pick your use year or a different exact number of points.

Bottom line is you'd have almost exactly the number of points and out of pocket price as through DVC. If you use MB, you'd have a cheaper cost through DVC but less points. I'm sure the seller paid $72 and is trying to get their money back less the commissions. You'd have the same number of points but just get them about 6 months earlier. Personally, I'd pass as a resale as the same price.

 

[DisneyKidds]

Dean and Doc - just so I am sure I'm not missing something, assuming we would not be taking the MB offer if we went thru DVC...

as I see it, with the resale we'd have about the same cost but 150 points more than if we bought from DVC.

DVC - 150 point contract, Aug use year, $75 per point, prorated maintenance for 2001 points (5 months worth based on use year?) with 150 points available right now (from Aug 2001), and 150 points coming available in Aug 2002. Cost would be approx. $11,500.

Resale - 150 point contract, Dec use year, $72 per point, a portion of maintenance on 2001 points (negotiated 6 months), with 300 points available right now (150 from Dec 2000 plus 150 points available from Dec 2001), and 150 points coming available in Dec 2002. Cost would be approx $11,500.

Maintenance due this coming Jan would be a wash as it would be the same on either purchase.

Aren't the 2000 points on the resale gravy, as thru DVC we'd have nothing from 2000? If the cost is about the same on both, isn't the resale a better value because of the 2000 points?

Thanks for making sure I have it straight.

 

[EROS]

Disneykidds, if you purchased through Disney, you would have 300 points available in August 2002 as opposed to Jan 2002 (anticipating that you'll close in 1 month). I would agree that both deals are really a wash financially. The resale IS giving you a use year which is 8 months earlier than Disney. There's nothing wrong with that, but I wouldn't consider it to be a substantial cash advantage.

In most resale deals, involving the older resorts, one should realize at least a savings of $1,000 or more apart from the consideration of banked points. However, since there are so few VWL resales available, your deal is certainly reasonable IF you have your heart set upon VWL. If not,you could do much better at the other resorts.

 

[RobDoc]

The prorated dues with DVC are from when you purchase- a purchase today will be prorated from Dec 21-31 (about $15 ). If you wait until January, there will be no 2001 dues with DVC. It would be interesting to see what the resale would do if you waited 2 weeks. (The 2002 dues are due in Jan. and will have to be paid by the owner to even sell the contract- would they ask you to pay 2 years of dues then also?)

With the resale you have a 9 month lead on the points. With DVC you would get 150 now (from Aug) and another in Aug. With the resale, you'll get 150 banked and 150 from this month. You have to wait about 7 months for the new 150 points with a DVC purchase.

The point made here is that this deal is not really any better than a direct purchase. There are no real savings at $72 plus closing costs and some annual fees vs DVC directly. You will be no worse off, but no better off either. IMHO, the reason to buy a resale is to save some $$ or buy something otherwise unavailable.

Good Luck!

 

[DisneyKidds]

EROS - we will without a doubt be purchasing a VWL contract. DW fell in love when we were there after Thanksgiving. We will also be buying a BWV resale and will look for a better deal on that.

The way I am looking at this particular VWL resale (vs buying thru DVC) is either 1) we have 300 points available 8 months earlier than thru DVC for the same cost, or 2) we rent the 2000 points, have 300 points available Dec 2002 (or a use year that is 4 months later than thru DVC) and lower our total cost by whatever we can get by renting the 2000 points.

Financially it seems a wash, but the resale provides more points and, therefore, more value whether we use or rent them. I'd love to find as good a deal on VWL as you can find on other resorts but it doesn't seem likely.

At least we have the weekend to think about it. Thanks.

 

[EROS]

I certainly understand your logic. The deals are essentially a financial wash, but you're getting an earlier Use year with the resale.

I would agree with Doc's premise that the primary reason that people pursue resale is to save $$$ out-of-pocket vs. purchase via Disney. Rental of the Dec 2000 resale points will realize some revenue, but you could likewise rent out the August 2001 points available via Disney.

We've purchased 2 BWV resales. My goal was to save at least $1000/purchase compared to Disney IRRESPECTIVE of banked points, which were included in both deals. The paucity of VWL resales makes that impossible at present, so I probably would grab your current deal NOW if I was anxious to obtain VWL points NOW.

All my best,

 

[Dean]

I think the use year, exact number of points you want and whether you need financing are the main issues with you're situation and this contract. If you normally travel in the Aug to November time, I would not accept the December use year. If 150 points isn't ideal for you, I'd also pass on this one. Also make sure they aren't planning on you paying the seller for the maint fees on the banked points you're getting as the dues will be due within the next 3 weeks, OTW, that you're not paying the 2001 maint fees. It's easy to word it with a DVC resale where it would have you paying for both years of points. You don't want to have to pay for both, it makes this a bad deal.

Personally, I'd not do it but since you're set on WLV and assuming all of the pieces fall into place, you're not losing anything assuming you check out the variables and make certain you're not paying extra. If you want it, tell the seller you'll pay exactly what they paid, $72 per point including closing and transfer. Also that you'll pay the fees due in Jan but no extra. If he says no, you still have Disney.

 

[kem330]

If you buy from Disney, You will have 150 points now, so you are only ahead 150 points until August. All you are buying is an 8 month advance - Dec 1, 2001 vs Aug 1, 2002. You will not pay any dues on the Aug 2001 points you will receive. Only prorated dues for 2002 (depending on closing date). As soon as you make a deposit you can make a ressie with a direct purchase. With a resale you will have to wait 4-6 weeks for closing and registration with Disney. You could therefore rent sooner and have access to ressies quicker with direct purchase. Also inherrent is the risk factor of renting vs. magical Beginnings which is a guarantee. Better financing is available with Disney and you can use a credit card which could be beneficial if you have an airline or other other affiliated credit card. It is hard to compare apples and oranges, but with resale you get Dec 2000 points (no maintenance) Dec 2001 points( 1/2 maintenance fees). All 2002 maintenance fees and 2002 points on Dec 1. With Disney: August 2001 points (no maintenance), 2002 prorated maintenance and points August 1 , 2002. So the basic difference is 8 mos sooner use year but extra half year of maintenance, plus closing costs. So those extra 150 points are costing you about $367.00(1/2 annual dues- sorry I don't remember exact dues for VWL- i guessed around $3.50/pt) So I suppose if you rent them you might come out a little ahead. I guess the main thing is if your happy with the deal, go for it. I'm not sure who you are buying through, but for future resales, I highly recommend Jaki at atimeshare.com. Good luck and enjoy!!!

 

[DisneyKidds]

Thanks Doc - that clarifies the prorated dues on a DVC purchase. I wasn't sure if the dues were prorated from the use year you were buying or from the date of purchase.

Given the way DVC would prorate the dues (or lack thereof for 2001) it looks like this VWL resale would be about $275 more than buying directly thru DVC, closing costs and all. However, over the life of the contract we would get 150 points more because of the banked 2000 points. $275 seems like a good deal for an extra 150 points. If we used them that is pretty good for a week's plus lodging. If we were to rent them we could lower our total cost and actually make ownership of the resale contract about $1,000 cheaper than if we purchased thru DVC, and still have all of the 2001 and 2002 points available, like we'd have if we purchased directly thru DVC. That is how I make sense of it in my head, but I may not be seeing it in the most logical fashion. As DW says, when I get an idea in my head...........

kem330 - your points about being able to make ressies sooner and the risk in renting points if that is what we decided to do with the 2000 points are good ones. It would take some work to possibly come out ahead financially on this resale. We have to decide if that work is worth it. I have also thought about how a Dec use year would fit with our travel plans and it doesn't seem like it would be a problem - but you are right, we should give it a lot of thought. I spoke to Jaki last week and she is keeping her eye out for VWL resales for us - they are few and far between at this point. She does seem very helpful and appreciates you guys recommending her .

EROS, wouldn't renting the Aug 2001 points (or using MB) on a DVC purchase be the equivalent of renting the Dec 2001 points on the resale? If that is true, renting the 2000 points on the resale provides something we couldn't get on a DVC purchase?

Sorry I keep rehashing this - but it is very nice to get a different perspective and look at this in a couple of different ways. It is very helpful.

 

[Dean]

I think you've got it overall. The trouble with the resale is that the maint fees are not paid to get the points per se. The fees due in Jan of 2002 are not simply for the 2002 points. Come Jan 15 of 2002, the fees will be due as a calendar year. That means that you will be paying 11 months for the Dec, 2001 points and 1 month for the Dec, 2002 points and so on in future years. If you even pay any fees above and beyond the ones due in Jan, it's too much for this contract.

You quoted the fees originally as paying for the 2001 points, which is wrong anyway. But assuming they were saying pay for this past years fees and then having fees due in Jan of 2002, here's the costs I see (I'll ignore MB). Through DVC you would get 150 points now and 150 points say next August at a cost of around $11250. Resale, you'd get 300 points now with a Dec use year at $11865 (or $11595 if you "split" the so called 2001 dues). That's $535 (or $345) more (don't forget the $75 transfer fee) for the resale for essentially 100 more points (2/3 of 150 points to adjust for a different use year). I also assumed $450 for closing but I've seen it a little cheaper for smaller contracts ($400-425).

I still don't think it's enough of a difference to make it worthwhile. While resale almost always goes ok, there are risks involved. Through DVC there is essentially no risk as long as you understand the program. I'll also repeat that if there is anything else about theis deal (use year, # of points, home resort) that isn't perfect for you, walk away or offer less.

One possible tactic I'd consider is this, since this is a wash for you anyway. Tell them you'll pay the dues (or half) for the 2001 points and make sure it's worded that way. Then later argue (correctly I might add) that the dues coming up due in Jan, 2002 are actually for 11 months of the 2001 points. I know it's a little sneaky but salesman who treat DVC points like traditional timeshare weeks where it is customary to pay the dues to get the week, are either dishonest or ignorant. While I don't think a salesman can know the ins and outs on every timeshare they list, I think a company who specializes on DVC should be expected to know something as simple as that.