Resale Contract Question

[buzz5985]

Hi, hope someone can help me understand something. I have a contract to buy HH - 150 points - December use year. There are 37 banked points from 2001.

A section of the contract reads - "Buyer is responsible for the annual dues on the 150 points for the 2002 allocation. Seller to be reimbursed any prepaid portion." So my question is - this must be the maintenance fee they paid in January 2002, and I will pay another maintenance fee January 2003. Is this the normal course of dealing with the maintenance fees? I was told that nothing is owed on the banked points.

I keep confusing myself with the Dec use year. Because even though you get the points in Dec 2002, I'd be using them from 12/2002 - 11/2003, but your maintenance fees are due January, and not when you get your points? Hope I'm making some sense.

 

[yasuern]

Please let someone with more knowledge answer this but here is my understanding. You will have to reimburse the seller the cost of dues - portion of dues on his unused points (37pts) - I do not own at bwv so I do not no the price per point of dues - but what ever that amount multiply it by 37. I would call the broker and have it clarified to be sure.

 

[RobDoc]

All aspects of a resale contract are negotiable. The maintenance fees are always due in January for the coming year (although members may spread the cost out for 12 months).

In this situation, it sounds like there are currently only 37 banked points available. The contract has not yet received the 2002 points (Dec 1).

If you were buying this same contract from Disney, the dues would be prorated for the year. If you purchased today, you would pay dues on 37 points for the 3 months remaining in the year and then full dues for January 2003.

Most resale brokers suggest that dues should be paid on a full year- regardless the Use Year and the purchase month, even though Disney does NOT do business that way.

Just remember that all aspects of the sale are negotiable- including price per point, dues and closing costs. Make sure you run the numbers before making an offer or accepting a counter offer by the seller.

Good Luck!

 

[Cap]

Before you sign the contract, you should get anything you don't understand clarified in writing.

The clause is ambiguous. It may mean that the buyer expects you to pay the 2002 dues billed in January, 2002. That would be 150 points @ about $3.50 / point, or $525. It may also mean that they expect you to pay 37/150 of the $525.

Remember, you will have dues for 2003 billed in January. You can either pay those when billed, or make arrangements with DVC for automatic debiting of about $45 / month.

I consider all aspects of a resale contract negotiable. Look at the total cost of the deal versus buying from Disney. If you don't like the total, then make a counteroffer that says something like "seller to be responsible for payment of 2002 year dues, buyer to be responsible for dues billed from January 1, 2003 onward". Also, sometimes the seller will pay the DVC transfer fee, or part of the closing costs.

 

[Dean]

Because DVC charges maint fees on a calendar year basis and not a use year basis, you would be paying for points you don't get if you pay fees on aa full years points. You need to look at the overall deal and decide if this is acceptable to you. Also, make sure you're buying HH because you want to stay there a large portion of the time with these points, otherwise look for other alternatives.

 

[buzz5985]

for all your quick replies. I planned on calling the broker, but I just wanted to know how others have dealt with it.

It may mean that the buyer expects you to pay the 2002 dues billed in January, 2002. T

I think this is exactly what it means. They paid their dues last January for 2002, and would like to be reimbursed. This is probably the reason behind the $62/point price. The broker told me when I first talked to him about the closing costs, and the $522 due for Annual dues, I just assumed it was for next year. But then I think, maybe it is fair since the points for 2002 aren't even available yet. I keep going back and forth.

I get the impression that alot of you don't like HH? My sister lives in NC and I don't get to see her that much, one of the reasons for HH. And I would probably use it more on summer vacations. And try to trade to OKW in October. Well wish me luck. If I can get them to drop the dues, I will probably sign.

Your a great group of people. Thanks for all the advice.

 

[baileybrad]

We purchased a resale at HH that had a use year of September. We paid dues for the last 4 months of the year and the buyer paid dues for the 1st 8 months of the year. As others have said, everything is negotiable.

You will enjoy the HH DVC resort. And your plan to stay there in the summer, and try to get into OKW occasionally, is a sound one. We have had very good success doing this. The HH resort is like getting 2 resorts for the price of one. One is a rustic tree-filled getaway and the other is a beautiful beachhouse getaway. Good luck in your purchase.

 

[rbuzzotta]

We paid the full amount of the dues. We bought resale in October but did not negoitate the dues because of the fact that we had a full year of banked points!!!! To us, it was definetly worth it!! WE are still working on the banked points going on our 3rd year!!! We did, however, negotiate the price and the downpayment amount!!!

Good luck!!

 

[Shontell_Crawford]

While this is not my resale, but it is an issue that comes up often, I'll add my opinion for your consideration.

In December of 2002, you will be getting a full year of points. The seller's view (which, keep in mind, could be your view one day) is that he has not used any of those points. You, as the new owner, have two years (if you banked them) to use those points. Therefore, the dues on those points should be paid by you.
The reverse would be true if he had used those points. He should pay them.

While we are not talking about buying from Disney, I'll include their facts to prevent a debate. If you bought from Disney today, your dues would be prorated based on whatever Disney's current incentive and offers include. (Usually 1/2 the year's dues) Consider that if you bought from Disney you wouldn't be getting any banked points from 2001 either, though.

If you consider all facts in logical manner, you'll be able to come to the right conclusion. I'm sure your broker will be happy to elaborate on everything the rest of us have mentioned.

Good luck!

Shontell

 

[Dean]

Originally posted by buzz5985

But then I think, maybe it is fair since the points for 2002 aren't even available yet. I keep going back and forth.

I repeat. DVC charges dues on a Calendar year basis. That means that in Jan of 2002, the owner paid for 11 months of the 2001 points and only 1 month of the 2002 points. You would be paying for points you had no use of. If the deal overall works for you, it's the final package that counts.

I get the impression that alot of you don't like HH? My sister lives in NC and I don't get to see her that much, one of the reasons for HH. And I would probably use it more on summer vacations. And try to trade to OKW in October. Well wish me luck. If I can get them to drop the dues, I will probably sign.

HH is a great resort. What most of us don't think is a good idea is buying HH with the idea of staying mostly at WDW. It's a risk you're taking at a time you don't have to take it. You can get an OKW contract at that price if you want WDW. If you want HH for summer a signficant portion of the time, it might truly be right for you.

Lets compare to buying HH from Disney. Assume you bought an April use year of 150 points at $80 pp, paid NO closing and paid prorated fees for the rest of this year. You could then sell back to DVC this years points. You are only saving about $300 plus getting points about 5 months earlier with the resale, plus the extra 37 points if they can be banked. You give up the chance to book with DVC initially and must wait until after closing with the resale. You could also chose the exact number of points you want if 150 isn't ideal for you. I usually recommend resale but just want to make sure you are getting and saving what you think you are.

You must decide what's best for you and your family, let us know what happens.

 

[RobDoc]

Shontell wrote:

Consider that if you bought from Disney you wouldn't be getting any banked points from 2001 either, though.

That's not accurate since, in most situations, you would get all of the current use year points from Disney. They might not be able to bank them for you at a late date, but you would still receive the points from the current use year and only pay prorated dues on those points until the end of the current calendar year.

If I were to buy a June Use Year contract at BCV from Disney on Dec 31, I would receive all of the 2002 points, pay no 2002 maintenance fees on those points and get another allotment of points on June 1, 2003. I would have to pay 2003 maintenance fees in January, 2003.

The same scenario works with ANY use year- even December.

 

[Shontell_Crawford]

Doc,

I believe you are correct in your above scenario in purchasing from Disney....which references 2002 points. If he bought from Disney, no matter which use year, he wouldn't be getting any points from 2001, as he is in the resale quoted above.

In the quote - I am talking about 2001 points. The buyer is getting all the 2002 points and the 2003 points, plus some banked points from 2001.

Sincerely,
Shontell

 

[RobDoc]

If he bought from Disney, no matter which use year, he wouldn't be getting any points from 2001, as he is in the resale quoted above.

If he can buy HH or VB from DVC directly, I think he will also get ALL the 2001 points (not just 37, as in the resale) and will only pay prorated dues on those points (3 months of dues on ALL 150 points- not just 37 points as in the resale). He will then get the full allotment of 2002 points and every year thereafter- just like the resale.

As with any financial transaction, make sure to run the numbers and compare your negotiation with a direct purchase. DVC won't have any closing costs and will prorate the maintenance fees.

Resales will often allow for a lower total cost when you figure in banked points amd lower point costs. Just be sure compare the entire package and costs.

 

[Shontell_Crawford]

I did not know Disney was giving a full year of points for 2001. I stand corrected.

Thanks, Doc!

Shontell

 

[Dean]

Originally posted by Shontell_Crawford
I did not know Disney was giving a full year of points for 2001. I stand corrected.

Thanks, Doc!

Shontell

For DVC resorts that had 2001 points, you would get them for 2001 is the use year were later in the year. I chose April in my example because of the MB issue which requires less than 6 months and also since only 2 use years were remaining at HH, I was thinking it was April and June.