Question about Resale or Direct from Disney?

[kerri0616]

So, if we can ever get out of debt (plumbing issue, DS Braces, Xmas...) we would like to buy a small DVC contract (75 points) which would be enough for our family to enjoy a studio during Xmas week each year. Really not picky about the resort either.

Since we are not current DVC owners, we would have to go through the resale market due to the low number of points, right? Am I correct that to buy from Disney directly we would have to buy the minimum 160 points even if we want to purchase at, say, Old Key West? Once we are in "The Club" (with only 75 points) could we then purchase another smaller contract (say 25 points) from Disney directly if we decide to add on in a couple years?

Thanks for the info. Just trying to be 100% informed.

Kerri

 

[DVC Mike]

Yes, you are correct.

The minimum initial purchase from Disney is 160 points. After that, you can add-on as little as 25 points (cash) or 50 points (finance).

 

[DVC Mike]

Here are the basic pros and cons of doing your initial buy-in into DVC direct from Disney or via resale.

Initial Purchase from DVC

• You can get the exact number of points that you want (although you must buy a minimum of 160)
• Faster than resale (you will be in the system and have your points and be able to make reservations much faster than resale)
• No worries about the purchase if Disney executes ROFR, since that only applies to resale purchases
• More expensive cost per point than the resale market
• You can finance through DVC, and Disney doesn’t report the loan to credit reporting agencies
• You can pay with a Rewards credit card and get points/cash back
• The full set of points you buy will be available immediately, versus a resale contract which may be “stripped” of points.
• If you don’t want the resorts they are currently selling (AKV/SSR), you may have to do some firm talking to a guide to convince them you really want an older resort.

Initial Purchase via Resale

• You may not get the exact number of points you want
• You can purchase less than 160 points for your initial buy-in to DVC (Disney won’t let you buy less than 160 points).
• It will take much longer to get into the DVC system and have your points (resales typically take 6-8 weeks)
• Disney may exercise ROFR and you may loose the resale and have to start all over (When buying resale, one of the potential pitfalls to try to avoid is making an offer that will cause Disney to exercise it’s Right of First Refusal)
• Resale is typically less expensive then buying from DVC
• You can’t finance through DVC, although most resale brokers will recommend a finance company
• A resale contract may be “stripped” of points where the user has used many of the current year’s points, and may have borrowed some or all of next year’s points. Be wary of “stripped” contracts on the resale market.
• Easier to pickup large point packages at any of the older DVC resorts.

 

[kerri0616]

Thanks guys!

I'm feeling pretty informed thanks to the wealth of knowledge here on the DIS.

Now if I could just win the lottery...I think I'd join the 1000 point DVC club!!

Kerri

 

[CarolAnnC]

So, if we can ever get out of debt (plumbing issue, DS Braces, Xmas...) we would like to buy a small DVC contract (75 points) which would be enough for our family to enjoy a studio during Xmas week each year. Really not picky about the resort either.

Since we are not current DVC owners, we would have to go through the resale market due to the low number of points, right? Am I correct that to buy from Disney directly we would have to buy the minimum 160 points even if we want to purchase at, say, Old Key West? Once we are in "The Club" (with only 75 points) could we then purchase another smaller contract (say 25 points) from Disney directly if we decide to add on in a couple years?

Thanks for the info. Just trying to be 100% informed.

Kerri

A big benefit to purchasing directly from Disney is that you can finance it with them. They make it very easy and simple to do. Resales will have to be paid in full with your own resources. Just a thought for you. That is how I started as I was in the same boat with kids, braces, etc. lol. Now I am in the 1000 point club...Good luck!

 

[JimMIA]

A big benefit to purchasing directly from Disney is that you can finance it with them. They make it very easy and simple to do. Resales will have to be paid in full with your own resources. Just a thought for you. That is how I started as I was in the same boat with kids, braces, etc. lol. Now I am in the 1000 point club...Good luck!

There ARE a couple of financing options for resale.

Probably the most popular is using a home equity line to finance the purchase. That might be even cheaper than Disney's financing. I know when I was researching options a few years ago, our home equity line would have been considerably lower than Disney's financing. Also, of course, the interest on a home equity line is usually tax deductible.

Also, some resale brokers have financing arrangements in place. The Timeshare Store - the sponsor of this site - has financing available. Here's a link to their financing info:

http://www.disboards.com/showthread.php?t=1162442

 

[JimMIA]

If you decide on a small resale contract, be aware that small contracts are pretty hard to find and they are usually priced somewhat higher than larger contracts.

The best strategy is to call TTS. Tell them what you want, and ask to be put on their "call list." If they get something that is close to what you are seeking, they'll call you before the listing ever goes on their website. Many small listings never make it to the website because they're snapped up from the call list.

If you're patient and a little flexible, you're likely to get pretty much what you are looking for using that strategy.

 

[CarolAnnC]

There ARE a couple of financing options for resale.

Probably the most popular is using a home equity line to finance the purchase. That might be even cheaper than Disney's financing. I know when I was researching options a few years ago, our home equity line would have been considerably lower than Disney's financing. Also, of course, the interest on a home equity line is usually tax deductible.

Also, some resale brokers have financing arrangements in place. The Timeshare Store - the sponsor of this site - has financing available. Here's a link to their financing info:

http://www.disboards.com/showthread.php?t=1162442

Yes, the Home Equity loan was partially what I was referring to when I said they would have to provide their own financing. I looked into TTS finance offer and found it to have a higher interest rate, however. The interest from the DVC financing was also tax deductible. They provide the appropriate IRS forms each year.

The problem with those scenarios (providing your own financing) is that you are subject to credit checks, bank approval, and much stricter guidelines than Disney adheres to. DVC will approve almost anyone, even those who have filed bankruptcy, I have heard. They may require a larger downpayment for someone like that, but it is a plus if you use them.. The other issue is that they will show up on your credit report, whether approved or denied, but DVC does not. This is an issue for some folks.

 

[JimMIA]

The interest from the DVC financing was also tax deductible.

Not necessarily. The DVC financing may or may not be deductible depending on the purchaser's individual situation. They would have to check with their own tax person to determine whether or not it would be deductible in their case.

There are scenarios where it would not be deductible, but a home equity line would be because it's a loan on your principal residence.

 

[JimMIA]

I looked into TTS finance offer and found it to have a higher interest rate, however.

Depends on what you compare it to.

If you compare it to home equity rates, no question home equity is lower. Disney's financing might be less expensive too, but keep in mind that OP only wants 75 points and can't buy direct from Disney in any event.

The actual comparison a purchaser should be doing with the TTS rates is against those offered by other brokers, and rates they could get from their own bank. In most cases, with this type of financing, you are talking about a signature loan, so naturally the rates are going to be higher that either Disney or a home equity, both of which are mortgages.

 

[JimMIA]

The problem with those scenarios (providing your own financing) is that you are subject to credit checks, bank approval, and much stricter guidelines than Disney adheres to. DVC will approve almost anyone, even those who have filed bankruptcy, I have heard. They may require a larger downpayment for someone like that, but it is a plus if you use them.. The other issue is that they will show up on your credit report, whether approved or denied, but DVC does not. This is an issue for some folks.

Yep...although if you have to be concerned about those issues, maybe you shouldn't be buying a luxury item like DVC in the first place.

We even have quite a few members here on the DIS who say that if you have to finance at all, you are not making a sound financial decision in buying DVC.

I'm not a member of that group, but I do think if someone's creditworthiness is an issue, they might want to consider the fact that the world is trying to tell them something. I hate to see the threads where someone just bought DVC and now they've had a financial setback (or just plain can't afford it) and have to sell. Those folks are taking a hit they really can't afford.

 

[kerri0616]

Sorry.

I should have mentioned that ours will be a cash transaction.

Kerri