Questions About Purchasing DVC Resale

[Disney Doll]

Poor Lisa.... you must be sick of me and my questions at this point but I have one more for you....

Now if I were to buy into a DVC resale with let's say 200 points... I would pay the seller the cost they are looking for upfront (say the 15K I used in my original question) and then every year I pay maintenance and the cost of my 200 points, correct?

You only pay the cost to purchase the points once. If purchasing a resale, you would pay this to the seller.

Once you own the contract, you would pay the maintenance fee every year to Disney.

In other words, if the purchase price of the reslae contract is $15K, you'd pay $15K to Joe Smith, seller. I am going to presume that Joe had already paid his maintenance fee for 2005. In January 2006, you would get a notice form DVC telling you what your monthly maintenance fee payment(also called dues sometimes) will be for that year. You can pay the monthly maintenance fee all at once or on a monthly basis.

DH & I have ours set up to debit from our checking account every month.

But you do not have to pay $15K every year to purchase the points. That is a one-time cost.

That is why the DVC becomes so much of a better bargain once you pay off the inital cost. Because essentially, using the same figures we have been using, maintenance fees of $870/year aren't so bad to be able to stay at a deluxe resort.

 

[LisaS]

Actually, this information is incorrect.

We have friends who purchased their DVC contract using the Disney credit card. They got the reward points, and the next month when they got the bill, they paid it off with their home equity line of credit, and then they paid that off on a monthly basis. Using the home equity line of credit enabled them to take off the interest on their income taxes.

Are you sure your friends didn't purchase directly from Disney? As far as I'm aware, that is the only way to purchase DVC using a credit card. Timeshare brokers charge 10%-15% commission when they resell an existing contract. They would lose 3% of the sale price to the credit card company. They would either have to pass that cost along to the seller or just eat the cost themselves. I don't think that's economically feasible for the broker and I can't see the seller agreeing to pay an extra 3% so that the buyer can get reward points.

 

[Cruelladeville]

I have the same question--I have purchased both from Disney and from resales, and only Disney will let you pay with a credit card. Now, if your friend did find a resale company that allows credit cards, I would be interested in knowing about them, since I may be interested in buying more points someday.

 

[vascubaguy]

I spoke with 1 reseller that said they took credit cards but usually only for the initial deposit to get everything going. They said if I wanted to charge the entire amount on a credit card they'd have to add in a surcharge (which is againt the merchant agreements for credit cards).

You can pay using a credit card check and could probably call the credit card company and tell them what you are doing and they might waive the "cash advance" fee and might even give you the interest rate for regular purchases (or a promo rate).

 

[First Wave]

When we bought resale, I asked TSS if I could use my card and the answer was no and they gave me a good reason why not. The title company issues title insurance at closing. ALL credit card purchases are disputable for 60 days. If they took a credit card and closed, a buyer could come back later and dispute the purchase. At that point the title company could potentially have a problem. It made sense to me.

I used one of my credit card checks (made out to me), had the fee waived and deposited the entire purchase amount into my personal account. When closing came, I was able to buy a cashier's check to send for closing. Got my miles and everythng.

 

[Seth Nock]

Some closing companies will permit you to pay via Pay Pal (and thereby use a credit card). Sometimes the buyer is responsible for the credit card fees. Sometimes the broker will cover the expense.

 

[crisi]

Re: Financing.....financing on a resale is usually not tax deductable, financing through Disney usually is. Financing with a home equity loan with either type of purchase usually is and usually offers the lowest interest rate.

(I am not a tax professional, your circumstances may vary, consult your tax professional (or at least the IRS web site) regarding your own circumstances.)