Question: Buy DVC or Resale Points... your help appreciated

[briangli]

I'd like to ask the community's help in assisting my decision on buying "new" or resale points. I've been following this board for some time, and am relatively savvy. Here is my situation:

I am buying and intend to stay at OKW, either 200 or 400 points.

DVC: Offers $90 on 2057 points "backdated" to 2009, so 400 points at closing (if I buy 200, or 800 if I buy 400). Of course, no closing costs (edited to clarify: they are currently offering to pay all closing costs), fast closing, and having an excellent guide "on my side." I calculate the value of the extra points at about $10 per point, and the extended 2057 expiration as a thumbnail $10 per point in extra resale value. I would probably finance a transaction like this with their 50% down and 4.95% interest over 1 year, which gives me enough leverage to buy 400 points at once if I wish (in 100 pt. blocks).

Resale: Sample available resales that have 2009 points banked seem to run about $68-$70, give or take a few. Maybe an opportunistic offer will arise, maybe not. Financing resale points are expensive and enough of a hassle that I'll probably buy just 200 or so for cash. These will almost certainly be 2042 points. And there is the longer time line and uncertainty associated with ROFR.

Other facts: My daughter is under 3, and we just finished a week at OKW that made clear this is where we want to vacation for a long, long time. While I don't want to overpay, if the difference in actual value is just a few dollars a point, I'll go the faster DVC route.

I know it's a lot to ask, but I'm planning on doing this pretty quickly, while all options are open, so if you could help me clarify my thinking and what I've missed, I would be very grateful.

 

[chalee94]

$10 per pt for a 2057 contract seems a tad high to me - i'd say $7-8 per pt - but maybe the spread will widen in the next decade...no big difference either way...

also, there are closing costs for new DVC contracts...maybe $200-300. if you add-on once you are a member, then there are no closing costs.

IMO, i'd wait for a resale, but if it's worth the extra money to you to save some time, then go ahead and buy direct.

 

[briangli]

$10 per pt for a 2057 contract seems a tad high to me - i'd say $7-8 per pt - but maybe the spread will widen in the next decade...no big difference either way...

also, there are closing costs for new DVC contracts...maybe $200-300. if you add-on once you are a member, then there are no closing costs.

IMO, i'd wait for a resale, but if it's worth the extra money to you to save some time, then go ahead and buy direct.

Thanks for the idea on the actual value spread between '42 and '57 points. That's exactly the kind of info that will help. I'm also seeing that the resale value per point appears to be a bit soft right now, which suggests that offers slightly under the ask may be accepted.

 

[KAT4DISNEY]

DVC only charges closing costs to new buyers for the current resorts. They never started that on the "sold out" resorts.

Do you have your next trip planned OP or could you wait to see if a good 2057 contract comes up? There are a few now and then and seem to go for the low 70's. For a 2042 contract I'd think you could get one for low to mid 60's (or better) and there are some right now that still have 2008 points. Not a lot of time to do much with them but still could happen. You'd have to decide how much the end date factors in for you though.

With the $90 offer from DVC they've made it a more difficult decision if you want the 2057 dates.

 

[CNPHILLY]

I haven't actually thought this through completely, but wanted to post to get everyone's thoughts. Perhaps you could get the 200 points from Disney now, so that you get 400 for immediate use, and then wait and add 200 later through resale at a much lower price point (the 2057 resales may be more prevalent later). While you'd pay closing costs twice (or at least pay them once on the resale), the additional closing costs would be nothing compared to the money you would save on the second 200 points in dollars per point (probably $20 per point or $4,000 total), and you wouldn't be rushed into adding on (you may not have to worry about financing the second 200 either because you could just put money away while you wait and scout 2057 OKW contracts). This is more of an averaging down strategy, and it may fit very well for you.

My second suggestion might be to purchase at Saratoga Springs instead of OKW, given that the contract length is only a 3-year difference and you could get all 400 points much cheaper in resale than by averaging your costs as in option 1 above. While there is the whole 11-month booking issue, it has been my experience that getting into OKW is not that difficult, so I am not sure that the 11-month booking window is all that important. Others may have a differing view.

Right now, based on what you have said your goals and needs are, I love option 1, but maybe I am missing something.

 

[briangli]

I haven't actually thought this through completely, but wanted to post to get everyone's thoughts. Perhaps you could get the 200 points from Disney now, so that you get 400 for immediate use, and then wait and add 200 later through resale at a much lower price point (the 2057 resales may be more prevalent later). While you'd pay closing costs twice, the additional closing costs would be nothing compared to the money you would save on the second 200 points in dollars per point (probably $20 per point or $4,000 total), and you wouldn't be rushed into adding on (you may not have to worry about financing the second 200 either because you could just put money away while you wait and scout 2057 OKW contracts). This is more of an averaging down strategy, and it may fit very well for you.

My second suggestion might be to purchase at Saratoga Springs instead of OKW, given that the contract length is only a 3-year difference and you could get all 400 points much cheaper in resale than by averaging your costs as in option 1 above. While there is the whole 11-month booking issue, it has been my experience that getting into OKW is not that difficult, so I am not sure that the 11-month booking window is all that important. Others may have a differing view.

Right now, based on what you have said your goals and needs are, I love option 1, but maybe I am missing something.

It's funny you mention option 1... I was thinking about that yesterday, too. I could get most of the best of both worlds, and dollar cost average down my points. I think I need to spend some time today really understanding how much points are selling for in resale. If I could buy 200 at the mid 60s or lower, with banked 2009 points included, and 2057 is really only worth an extra $7-$8, then buying 200 from DVC and 200 resale is probably the way to go... or just buying all 400 at resale.

As for buying at SSR, my concern is having the best shot in getting a GV at a fairly busy time of the year, and I'd hate to lose out on that by the 7 month window in order to save a smaller percentage of the purchase price.

Thank you for the excellent insights.

 

[CNPHILLY]

It's funny you mention option 1... I was thinking about that yesterday, too. I could get most of the best of both worlds, and dollar cost average down my points. I think I need to spend some time today really understanding how much points are selling for in resale. If I could buy 200 at the mid 60s or lower, with banked 2009 points included, and 2057 is really only worth an extra $7-$8, then buying 200 from DVC and 200 resale is probably the way to go... or just buying all 400 at resale.

As for buying at SSR, my concern is having the best shot in getting a GV at a fairly busy time of the year, and I'd hate to lose out on that by the 7 month window in order to save a smaller percentage of the purchase price.

Thank you for the excellent insights.

No problem. The more I thought about option 1, the more I thought it could be really great for your situation, and it would still afford you immediate use of 400 points buying direct (plus, as you mentioned, the opportunity to "double up" twice with banked points on the resale purchase).

 

[briangli]

DVC only charges closing costs to new buyers for the current resorts. They never started that on the "sold out" resorts.

Do you have your next trip planned OP or could you wait to see if a good 2057 contract comes up? There are a few now and then and seem to go for the low 70's. For a 2042 contract I'd think you could get one for low to mid 60's (or better) and there are some right now that still have 2008 points. Not a lot of time to do much with them but still could happen. You'd have to decide how much the end date factors in for you though.

With the $90 offer from DVC they've made it a more difficult decision if you want the 2057 dates.

I'm working on a next trip for somewhere right before or after Thanksgiving week. I'm just getting into the swing of planning at an 11 month window. Since my daughter isn't in school yet, I have more flexibility now than we will in a couple of years, especially since the hot weather of summer isn't our style... so we'll be looking at narrow chunks of time around school holidays.

If I manage to find a 2042 contract in the low 60s with banked points, I think I'd just buy it. That would be a big enough difference over new points to wipe out any issues. Besides, I bet at some point they make another offer to extend those points to raise some cash (if I am likely wrong on this for some historical reason, please let me know).

I don't mind buying 2042 points if the spread is enough to make financial sense of it.

Thank you for your help.

 

[KAT4DISNEY]

I'm working on a next trip for somewhere right before or after Thanksgiving week. I'm just getting into the swing of planning at an 11 month window. Since my daughter isn't in school yet, I have more flexibility now than we will in a couple of years, especially since the hot weather of summer isn't our style... so we'll be looking at narrow chunks of time around school holidays.

If I manage to find a 2042 contract in the low 60s with banked points, I think I'd just buy it. That would be a big enough difference over new points to wipe out any issues. Besides, I bet at some point they make another offer to extend those points to raise some cash (if I am likely wrong on this for some historical reason, please let me know).

I don't mind buying 2042 points if the spread is enough to make financial sense of it.

Thank you for your help.

Have you checked out **********.com. They have several contracts with banked points especially if you're flexible on UY. I kind of figure that an offer of $5 or so less than asking has a good chance of being accepted. They also have access to other inventory and could search for something specific you had in mind. I bought once from **** and Jaki and had a good experience.

I don't really know about another extension being offered. In some ways it makes sense but I'm not real up on the intricacies of it. I wouldn't buy a 2042 contract assuming I'd be able to extend in the future.

Good luck!

 

[Fellowship9798]

I would go resale and save some money. You are making a purchase of points that will last for decades. If it takes a month or two (or three) to find the right contract at a great price, that's a relatively minor delay compared to how long you will have to use your points overall.

 

[briangli]

Have you checked out **********.com. They have several contracts with banked points especially if you're flexible on UY. I kind of figure that an offer of $5 or so less than asking has a good chance of being accepted. They also have access to other inventory and could search for something specific you had in mind. I bought once from **** and Jaki and had a good experience.

I don't really know about another extension being offered. In some ways it makes sense but I'm not real up on the intricacies of it. I wouldn't buy a 2042 contract assuming I'd be able to extend in the future.

Good luck!

I'm actually just getting in touch with them now. This is clearly my next step. Thank you for helping clarify.

 

[Sandisw]

In my opinion, I would go through Disney and get what you really want--which is 400 points.

Yes, you are spending a bit more money and that needs to be considered, but getting exactly what you want, with those extra points, can carry you a long way.

We went through Disney when we bought because we wanted BLT, even though it was more in the long run. The ease made it all worth it.

Who knows what the price will be in a year from now for those additional 200 points. The savings you get know might be lost (or at least some of it).

The other piece is your next trip. Resale can take 2 months or so and if ROFR happens, even longer. If you know you are going to go back to OKW, even if it is in a year from now, you want to own so you can take advantage of the 11 month booking window. Going resale might prevent this. Of course, OKW is one of the resorts that seems to have great availability so may not be a huge issue.

On a side now, do you own a Disney Visa? If so, you can put down part/all of the cost (possibly up to $10,000 now) and get 6 months, 0% interest on your puchase. Plus, you get the rewards dollars. Not something available through resale.

We did this when we did both BLT contracts. I ended up putting on the entire purchase (in installments) of a 130 point contract and a 50 point contract. I got all those points and the extra time I needed to pay "cash". The entire amount (over $17,000) interest free--well it was split between two cards, but still, no interest!!

Good luck!

 

[briangli]

In my opinion, I would go through Disney and get what you really want--which is 400 points.

Yes, you are spending a bit more money and that needs to be considered, but getting exactly what you want, with those extra points, can carry you a long way.

We went through Disney when we bought because we wanted BLT, even though it was more in the long run. The ease made it all worth it.

Who knows what the price will be in a year from now for those additional 200 points. The savings you get know might be lost (or at least some of it).

The other piece is your next trip. Resale can take 2 months or so and if ROFR happens, even longer. If you know you are going to go back to OKW, even if it is in a year from now, you want to own so you can take advantage of the 11 month booking window. Going resale might prevent this. Of course, OKW is one of the resorts that seems to have great availability so may not be a huge issue.

On a side now, do you own a Disney Visa? If so, you can put down part/all of the cost (possibly up to $10,000 now) and get 6 months, 0% interest on your puchase. Plus, you get the rewards dollars. Not something available through resale.

We did this when we did both BLT contracts. I ended up putting on the entire purchase (in installments) of a 130 point contract and a 50 point contract. I got all those points and the extra time I needed to pay "cash". The entire amount (over $17,000) interest free--well it was split between two cards, but still, no interest!!

Good luck!

I did not know about the 6 month interest free offer. I'm not a huge user of credit cards, but this would be a very good reason to get it.

The answer to my initial question is starting to come into focus. It's nuanced, but I think I see the line and circumstances where it makes sense to transition from resale to DVC sold points.

You guys are being enormously helpful.