Resale is "undesirable"?

[3littlecuties]

DH and I are considering buying into DVC. We looked into it about 5 years ago and decided against it but are now considering it again. We have 3 children and are most interested in the Poly studios. It is our understanding that the only studios that sleep 5 are Poly, Grand Floridian, and Wilderness Lodge. For any of the other resorts, we would need at least a 1 bedroom (2 bedroom at some places) in order to accommodate 5.

Anyway, I know the resale market for Poly is limited but we are looking into it. An agent just told us that all resale memberships are units that Disney has chosen not to buy back for a specific reason. She said that Disney has been more proactive about buying back points and that Disney has first right of refusal so anything on the resale market is because Disney did not want them for some reason.

Thoughts on this?

 

[_auroraborealis_]

In general, Disney tends to buy back points only if the cost-per-point being offered is ridiculously low, or if they have a sure-thing sale they need points for from a waitlist where they can mark the points up 50-100% over what the resale cost.

Disney tend not to exercise ROFR on most contracts if they're at a reasonable cost per point. If they did, they'd have to find ways to resell them, and in many cases it would spiral out of control for them. They don't want to be selling Saratoga or OKW right now; they have Poly and Aulani to sell through.

That said, if you are well and truly committed to the idea of the Poly (have you stayed there?), that's one of the cases where buying direct may make sense. However, Boardwalk studios now sleep 5, and Beach Club will be sleeping 5 very soon.

 

[SuperRob]

Disney will buy back any contract it thinks it can make money on. There is nothing necessarily "undesirable" about a contract other than profit margin. For you, it may mean paying less than you would Disney, but getting a contract with no points immediately available (which you also don't have to pay dues on, which could be favorable, depending on your outlook).

There are a few Poly contracts out there, surprisingly. So if that's what you want, you can try. My understanding is that there ARE some other studios that can now sleep 5. "Sleeper Chairs" are added to some resorts like Bay Lay Tower. May not be super comfortable, but it would work. That said, the nice thing about buying resale is you could potentially afford more points, and maybe be able to do larger accommodations. Something to consider.

 

[jerseyduke]

What do you mean when you say an agent? A Disney agent, aka Guide? If so, then it is a lie, well sort of.

Disney will choose not to buy back a Poly contract at 160 per point, because reselling it only nets them 8$ per point, hardly worth their time.

The cost for Disney to build a Poly point means that their greatest margin is to sell Poly Points, not some other resort that they had to buy back at resale rates.

That being said, Disney has gotten more aggressive with ROFR, to up the resale market prices. But is also includes factors like which residential unit it is in, what UY, etc, there are a lot of factors.

If Disney needs points in a certain residential unit, and one comes across the ROFR table, Disney may buy it, having just let an almost identical contract pass, even at a lower price.

Questions to ask are how much will you have buying Poly resale, vs direct? Do the points and UY of the contracts make sense for the probably minimal savings? And, is the 11 month booking window at the Poly worth the premium based on how many studios they have?

I would also view the studios. At the VGF, studios do indeed sleep 5. But there is virtually no storage space; I can not imagine having 5 people in one of those rooms, even if three of them are under 5.

One more thing to consider is how likely are you to downsize in the future? If you think its a decent possibility, I would buy Poly points Direct, and in 50 point contracts, as they would fetch more on the resale market in the future, and may be worth paying a little more for. Not to mention, no going through ROFR, process is much easier.

Just things to consider. But by no means are resale contracts "undesirable"

 

[3littlecuties]

In general, Disney tends to buy back points only if the cost-per-point being offered is ridiculously low, or if they have a sure-thing sale they need points for from a waitlist where they can mark the points up 50-100% over what the resale cost.

Disney tend not to exercise ROFR on most contracts if they're at a reasonable cost per point. If they did, they'd have to find ways to resell them, and in many cases it would spiral out of control for them. They don't want to be selling Saratoga or OKW right now; they have Poly and Aulani to sell through.

That said, if you are well and truly committed to the idea of the Poly (have you stayed there?), that's one of the cases where buying direct may make sense. However, Boardwalk studios now sleep 5, and Beach Club will be sleeping 5 very soon.

Yes. We have stayed at Poly and it has been our favorite so far. We are planning on doing BC this year because we wanted to check out the pool area. The DVC book that they gave us says that Boardwalk sleep 4 so that must be a recent change. Thanks for the info!

 

[supersnoop]

She said that Disney has been more proactive about buying back points and that Disney has first right of refusal so anything on the resale market is because Disney did not want them for some reason.

Disney didn't buy them because Disney couldn't turn around and sell them immediately at their direct pricing rates. Disney buys back about 2% of all resale transactions.

 

[_auroraborealis_]

Yes. We have stayed at Poly and it has been our favorite so far. We are planning on doing BC this year because we wanted to check out the pool area. The DVC book that they gave us says that Boardwalk sleep 4 so that must be a recent change. Thanks for the info!

The Poly studios are a bit different than the Poly rooms. Definitely at least tour them.

 

[bumbershoot]

An agent just told us that all resale memberships are units that Disney has chosen not to buy back for a specific reason.

This agent is hinting that the actual physical unit (room?) owned is somehow undesirable? Bwa haha. They built each unit. and each owner owns a fraction of a unit. And using points one can be assigned to any actual room. So how does that even make sense to this agent?

Don't talk to dvc people about resale.

 

[KAT4DISNEY]

DH and I are considering buying into DVC. We looked into it about 5 years ago and decided against it but are now considering it again. We have 3 children and are most interested in the Poly studios. It is our understanding that the only studios that sleep 5 are Poly, Grand Floridian, and Wilderness Lodge. For any of the other resorts, we would need at least a 1 bedroom (2 bedroom at some places) in order to accommodate 5.

Anyway, I know the resale market for Poly is limited but we are looking into it. An agent just told us that all resale memberships are units that Disney has chosen not to buy back for a specific reason. She said that Disney has been more proactive about buying back points and that Disney has first right of refusal so anything on the resale market is because Disney did not want them for some reason.

Thoughts on this?

The only thing to be said is that a timeshare sales person trying to sell to you said this. What else would their response be? I agree with bumbershoot - just don't even talk resale with the Disney sales people. Resale takes away a sale from them so they will discourage and say what they feel is necessary to pull you back.

For Poly - if that's the resort that truly makes sense for you to own at then direct is likely the direction to go since there isn't that much of a discount and there are few contracts out there. But Poly will only make sense if you almost always want to stay there and are happy with the studio every time. If you plan on enjoying other locations then buy elsewhere. Every other location resale will make sense for the larger purchase. PVB, VGF, VWL and BWV (being completed soon) all have the murphy bed in the studios. BCV should be receiving it during their refurb this year. And keep in mind that home resort only matters if you will use the home resort booking period. If you book 7 months or less out then buying the lowest cost points when you calculate initial price and dues can be the priority.

DVC does ROFR but they never have ROFR'd everything, so that is true. But there's nothing different about the contracts they don't. You are not buying a specific "bad" unit - you are buying points and other than a few outside trade restrictions you can use them just like direct or any other resale.

 

[3littlecuties]

This agent is hinting that the actual physical unit (room?) owned is somehow undesirable? Bwa haha. They built each unit. and each owner owns a fraction of a unit. And using points one can be assigned to any actual room. So how does that even make sense to this agent?

Don't talk to dvc people about resale.

Not the room itself...I guess more so the "deal". I probably didn't word it correctly. Here is the actual quote:
"Typically what you see the resale market are memberships that Disney chose not to buy back and for very specific reasons. In the past couple of years Disney has become more proactive in buying back Members points so any sale that is on the resale sites must first be processed through Disney they have a 30 day first right of refusal so the only deals that actually go through on resale are the points that Disney does not want. The negative side is that many of the memberships have 50% less life in them as little as 25 years left, the membership can not be use for 4 of the 6 collections including the: Disney collection and Concierge, usually the resale memberships will be stripped out and have no points for the next couple of Use Years but since the dues are paid in advanced the person buying a resale is responsible for to pay for dues (even if the website states that there are points available only Disney as access to actually see that), also it may be a contract that has gone into foreclosure or has a lien on it so it is not the most attractive."

And yes, this is a Disney DVC rep. So I can see where she would want to steer us away from resale. That's why I wanted to get everyone's input!

 

[KAT4DISNEY]

Not the room itself...I guess more so the "deal". I probably didn't word it correctly. Here is the actual quote:
"Typically what you see the resale market are memberships that Disney chose not to buy back and for very specific reasons. In the past couple of years Disney has become more proactive in buying back Members points so any sale that is on the resale sites must first be processed through Disney they have a 30 day first right of refusal so the only deals that actually go through on resale are the points that Disney does not want. The negative side is that many of the memberships have 50% less life in them as little as 25 years left, the membership can not be use for 4 of the 6 collections including the: Disney collection and Concierge, usually the resale memberships will be stripped out and have no points for the next couple of Use Years but since the dues are paid in advanced the person buying a resale is responsible for to pay for dues (even if the website states that there are points available only Disney as access to actually see that), also it may be a contract that has gone into foreclosure or has a lien on it so it is not the most attractive."

And yes, this is a Disney DVC rep. So I can see where she would want to steer us away from resale. That's why I wanted to get everyone's input!

Every resale deal will be different. In actuality resale is the way only way to actually get previous years points if you find one fully loaded with banked points. Disney doesn't do that direct although they will attempt to tell you you get "last years" points when they are actually current year points. It's up to you to decided stripped or not and negotiate the dues but it's most likely that stripped contracts give credit for dues on points already used. For life remaining - actually DVC will sell you those same contracts with 50% less life for 35-40% more than resale. They were twisting and placing a negative without covering all the realities. And as we've said, they don't buy every loaded contract and just let stripped go thru. You just never know when the monkey will throw the dart at your contract but in the realm of all the resales it's relatively infrequent.

 

[MJ6987]

Not the room itself...I guess more so the "deal". I probably didn't word it correctly. Here is the actual quote:
"Typically what you see the resale market are memberships that Disney chose not to buy back and for very specific reasons. In the past couple of years Disney has become more proactive in buying back Members points so any sale that is on the resale sites must first be processed through Disney they have a 30 day first right of refusal so the only deals that actually go through on resale are the points that Disney does not want. The negative side is that many of the memberships have 50% less life in them as little as 25 years left, the membership can not be use for 4 of the 6 collections including the: Disney collection and Concierge,

Whilst this is true, I am no expert but I don't think it's good value to buy DVC and use it on anything but the core DVC properties anyway

 

[_auroraborealis_]

Some of the contracts have less life, it is true. If you buy a resort that expires in 2042, it will have less life. You are also probably paying a lot less.

Resorts like Saratoga and Bay Lake Tower can be purchased at pricing that is far better than Poly pricing, with lower per-point-dues, and highly reasonable end dates. If one is not committed to the 11-month window at the Poly, Saratoga points are a steal.

While contracts for Beach Club and Boardwalk have shorter terms, this shouldn't matter if those are the resorts you want to stay at. If you want to stay at BCV, you'll often want/need an 11-month window; ditto BWV. Having a longer contract to stay places other than where you want to stay is a dubious "value"!

 

[ColinBlair]

None of what they said was really a lie, just lots of spin going on. All of the original Disney World DVC resorts (OKW,BCV, BWI, VWL) are being sold on the resale market well above the retail price set by the Polynesian making them unattractive to Disney. AKV and SSR are reselling way, way under retail price but they are also the largest resorts making it impossible for Disney to make more than a dent in the ROFR process as long as they keep building new resorts.

If you are interested in resale, I would recommend looking at the cheaper resorts (SSR, AKV, and BLT) and consider budgeting for a 1-BR or 2-BR instead of a studio. With 3 kids, you will eventually want more space and you can save a lot of money preparing your own meals since you would have a full kitchen.

 

[disneynutz]

Advice from a sales person who wants you to buy direct.

Our biggest mistake was not staying in a resort prior to buying and not talking the time to experience all of the resorts to prior to picking a favorite.

Bill

 

[pangyal]

"The negative side is that many of the memberships have 50% less life in them as little as 25 years left"

This is really fresh considering Disney sells those contracts direct too, at a huge markup, after taking them back through ROFR.

 

[bwvBound]

Not the room itself...I guess more so the "deal". I probably didn't word it correctly. Here is the actual quote:
"Typically what you see [ON] the resale market are memberships that Disney chose not to buy back and for very specific reasons. In the past couple of years Disney has become more proactive in buying back Members points so any sale that is on the resale sites must first be processed through Disney they have a 30 day first right of refusal so the only deals that actually go through on resale are the points that Disney does not want. The negative side is that many of the memberships have 50% less life in them as little as 25 years left, the membership can not be use for 4 of the 6 collections including the: Disney collection and Concierge, usually the resale memberships will be stripped out and have no points for the next couple of Use Years but since the dues are paid in advanced the person buying a resale is responsible for to pay for dues (even if the website states that there are points available only Disney as access to actually see that), also it may be a contract that has gone into foreclosure or has a lien on it so it is not the most attractive."

And yes, this is a Disney DVC rep. So I can see where she would want to steer us away from resale. That's why I wanted to get everyone's input!

Assuming there was one missing word (inserted above as "[ON]") -- then the agent's opening statement was, largely, a lie. The listings that you see on the resale market have NOT YET BEEN EVALUATED by Disney's Right of First Refusal (ROFR) process. Disney hasn't yet seen those listings! The only listings Disney sees before the resale listing market are those it takes by default (foreclosure), signed over through an estate process (death of original owner), or deeded back to Disney by the owner (a rare occurrence).

Bottom line, those listings you see on the resale market might, in the sale process, be later taken by Disney -- but they aren't second-class products by virtue of being listed to the resale market. That opening line is, basically, hogwash.

 

[JimMIA]

An agent just told us that all resale memberships are units that Disney has chosen not to buy back for a specific reason. She said that Disney has been more proactive about buying back points and that Disney has first right of refusal so anything on the resale market is because Disney did not want them for some reason. Thoughts on this?

As noted above, that is simply not true. DVC does not make ROFR decisions until the seller and buyer have agreed on terms and the deal is submitted to them. They not only haven't "chosen not to buy back", they haven't even seen the offer!

The negative side is that many of the memberships have 50% less life in them as little as 25 years left...

Half-lie. All DVC contracts expire whenever they expire, whether they are sold direct by DVC or purchased resale. The expiration date has absolutely NOTHING to do with how the contract is purchased.

Also, although you will frequently see shorter expiration contracts dissed here on the DIS, some buyers consider a shorter obligation a benefit, not a negative.

the membership can not be use for 4 of the 6 collections including the: Disney collection and Concierge

TRUE...BUT a classic example of a timeshare salesman citing a benefit of resale as a disadvantage to cloud the issue. Using DVC points for those two collections is almost universally a terrible waste of points.

usually the resale memberships will be stripped out and have no points for the next couple of Use Years

Lie. Some contracts are "stripped," others are "loaded" and you are actually getting a lot of truly free points.

Contrast that with the typical DVC timeshare salesman lie that you are getting "free" points buying direct, when all you are really getting is the current UY points that you are paying for!

with but since the dues are paid in advanced the person buying a resale is responsible for to pay for dues (even if the website states that there are points available only Disney as access to actually see that)

Mostly a lie, in several areas. First, all terms of a resale transaction are agreed upon by the buyer and seller, and everything is negotiable. You pay dues for points only if you agree to do so, and the typical practice is you do not because available or banked points are used as a deal-sweetener.

Secondly, some owners pay their dues in one lump sum; others pay them by automatic monthly debit to their checking account. Those paid monthly obviously would not be pre-paid.

also it may be a contract that has gone into foreclosure or has a lien on it so it is not the most attractive."

Lie. There is no difference between a contract which had been foreclosed (most of which would be sold directly by Disney anyway) and any other contract. Points is points, no matter what their history.

And the lien comment is laughably stupid. All liens have to be settled at closing, so they are irrelevant to the buyer. If the timeshare salesman (who is a Florida-licensed real estate agent) doesn't know that basic fact, they are truly lacking in job knowledge!

 

[MsTessP]

Something else to remember: For the thousands (and thousands) of members who have sold their contracts on the resale market, the end year of the resort has been a totally moot point. Most people when they first purchase DVC have all intentions of owning (or their heirs owning) until the resort end date. However, in reality it will be a small minority of owners who end up owning up to the end date of their resort. The price point for all the resorts, even the oldest, are still continuing to climb, both on the direct and the resale markets. Obviously, as time goes on, this will change. However, for now, I agree with others who suggest that the length of remaining contract should not be the deciding factor when choosing a resort.

 

[ColinBlair]

Something else to remember: For the thousands (and thousands) of members who have sold their contracts on the resale market, the end year of the resort has been a totally moot point. Most people when they first purchase DVC have all intentions of owning (or their heirs owning) until the resort end date. However, in reality it will be a small minority of owners who end up owning up to the end date of their resort. The price point for all the resorts, even the oldest, are still continuing to climb, both on the direct and the resale markets. Obviously, as time goes on, this will change. However, for now, I agree with others who suggest that the length of remaining contract should not be the deciding factor when choosing a resort.

I agree to a point. There are some ridiculously high prices right now on some of the resale sites that are not sustainable. Looking at the ROFR thread here at Disboards, I am seeing plenty of actual purchases at much more reasonable prices which makes me happier about the health of the market.

I am not worried about someone paying $90 a point for VWL or $100 a point for BMI. That feels in the realm of buying where you want to stay to me. The brokers trying to push BCV over $120 is where the danger lies. That feels too much like a bubble to me, and we all know what happens when real estate bubbles break.