RESALE RUMOR direct from DVC

[mmmcq]

I just talked to my guide about adding on at BCV and an eventual 2nd add-on at BWV, which is our current home resort. I asked about the length of time it might take to get the extra points direct from Disney vs a resale.

The answer was that DVC was working on a buy back program that would have all resales only available from DVC! I didn't realize the significance of the statement until I got off the phone so I didn't ask any other questions.

I think others may have heard a similar rumor.....but thought you'd all like to hear it again.

 

[Pa@okw95]

With prices going up to $84 a point and you have members that paid around $60 or less for their property and are thinking of selling, it is no wonder the DVC isn't trying to think of some way to stop the resales from other than DVC. There are members that have been such for close to 10 years, got free tickets to the parks for years. paid 50 something for their points, and after 10 years can actually sell their points for more than they paid for them. Imagine, it is like they had 10 years of WDW free vacations if they sell.

 

[RobDoc]

That will be an interesting rumor to follow.

I'm not sure DVC can prevent someone from selling privately or thru another broker, unless DVC exercises it's right of refusal on every resale transaction.

They could certainly make it attractive to have DVC handle all resales by incorporating resales into their current sales program, eliminating any broker commission for the seller and closing costs for the buyer. They would likely have to set a buy back price to attract the seller and then buyers would deal directly thru DVC just as new purchasers do now.

Stay tuned!

 

[CarolAnnC]

It seems to me that Disney would not be able to exercise their right of first refusal on all sales without paying exhorbitant prices.
Don't see how it would work unless they change the rules for the new DVC Resorts that will be coming available in the next few years. Perhaps DVC Part II will operate under different guidelines.

 

[DVCDAVE]

Hmmmm......

I'd be very leary and cautious about any plan for DVC to monopolize the secondary market in DVC Timeshare interests. What protection would us members have to insure a 'fair' and resonable price ??

Whose interests would be represented in such a restricted market ??? My first instincts tell me ONLY Disney's.

Am I wrong ?

 

[TnRobin]

I too would be leary of these rumors. As I am not a lawyer, nor do I play one on TV, I can not be sure, but I really think the Fair Trade standards will not allow this. In addition, I doubt the Florida laws surrounding the purchase of real estate will allow someone to place this kind of restrictions. ( I still have a little bit of that Business Law class floating in my head somewhere)

 

[pat-rick]

With a new price of $84. what would stop Disney from purchasing the resales. They could exercise the Right of Refusal and sell the point at the new price. They could make it close enough that it would be desirable to go through them rather than a resale Broker. With Disney taking over the market they would have more control and its not like they are hurting for buyers. Many people want the sold out Villas for add on etc. as is evident when reading these threads.
I think it is a smart move on their part. They aready have the people all they need to do is set the guidelines. Start off buying everything under $75. and sell for $84 ++++.
With a $9. spread would you buy / sell with Disney with limited extra costs or go with the broker.

 

[HookdonWDW]

Originally posted by WebmasterDoc
They could certainly make it attractive to have DVC handle all resales by incorporating resales into their current sales program, eliminating any broker commission for the seller and closing costs for the buyer. They would likely have to set a buy back price to attract the seller and then buyers would deal directly thru DVC just as new purchasers do now.

Interesting theory Doc. I can see it being a very attractive offer if DVC offered owners around $65/point with no commission fee. There'd be no incentive for owners to accept offers below this price point, and the seller would have a hard time making additional $$$ after paying the commission fee. Plus, it could be pretty hassle free, since DVC can split up the points into multiple contracts - you wouldn't have to wait for someone to come along who wants exactly what you have to offer.

Of course, the people who would be less happy are the resale brokers and people looking to get a deal through resale...

 

[Horace Horsecollar]

Aside from excercising their right of first refusal, there's no way that Disney can prevent a DVC member from reselling his/her DVC ownership.

In the past, Disney has never offered a resale porgram. Maybe now they will.

In comparision, Marriott Vacation Club has a resale program in which Marriott sets the price and takes a 25% commission. Marriott timeshare owners selling in this way might have to wait a year or two (or three) to sell through Marriott. Many Marriott owners don't want to wait, so they sell their timeshares at a lower price without going through Marriott.

 

[CarolMN]

Originally posted by Horace Horsecollar
...(snip)....In comparision, Marriott Vacation Club has a resale program in which Marriott sets the price and takes a 25% commission. Marriott timeshare owners selling in this way might have to wait a year or two (or three) to sell through Marriott. Many Marriott owners don't want to wait, so they sell their timeshares at a lower price without going through Marriott.

25%! OUCH! Most of the resale brokers don't charge that much, do they???

 

[mmmcq]

Like I said....I was totally unprepared to ask the appropriate questions....so I am short on details. But when I asked about the waitlist for BWV my guide indicated that it wouldn't be that long before points were available to everyone on the current list. That's how he got around to mentioning the buy-back program.

I haven't been watching resales until recently so I can't even begin to comment on pricing, etc. But I could see where there could be benefits for both DVC members and Disney, if they really think through the program. But the cynic in me thinks it will always benefit Disney more than the members. We'll have to wait and see.

If anybody else hears anything, let us know.

 

[crisi]

Don't feel bad about not getting details - I'm willing to bet your rep doesn't have them. Every place I've ever been has had the rumor mill about coming policy changes, and I can't imagine DVC will be any different.

This could turn out to be a simple as upping the "buy back" floor with the price increase, or changing whatever decision making process they have on ROFR. Maybe they will simply make the floor firm, so great deals like Dean's don't go through. I suspect that what they will do is narrow the delta between the ROFR price and the current sale price. Currently, resales can save some money - if they change the delta, it won't be worth the bother to do anything but buy from Disney.

Although I think Doc's suggestion would be a sound business decision for DVC. No more bargains for resale buyers though.

 

[mikesmom]

No more bargains for resale buyers, but certainly an extra "guarantee" for new buyers on the fence. A virtual guarantee that you could sell the thing back if you got into a bind might push some people over.

 

[Dean]

While Marriott may take 25% of the sale price, they are able to set the price which is typically that of a developer. It'd be like a DVC member selling at $80 but paying 25%, the net to the seller is still $60 per point. That's still more than most seller are getting now.

There's no way DVC could force members to sell through DVC directly but they could set it up where it doesn't make sense to do otherwise. In the short term the brokers would still get their share, just as they do when a contract is bought back now. DVC sends a check for the commision directly to the broker's company. In the long run DVC could shift the playing field where it didn't make sense to sell through anyone but DVC. They could do this by attractive terms and sales price, by buying most of them or by making it less expensive to buy through DVC directly. They could also withold certain perks from those that bought resale though I doubt this will happen.

The only ones that would lose are those looking for a bargain and the brokers in the long run.

 

[ralphd]

Agree with Doc and Dean- DVC could have a competitive advantage, but would not be a monopoly. The resalers will still get a large portion of the resale business.
Adding the resale option to the DVD business would give the sales staff more resorts with a larger inventory of points to sell. I am sure they would be happy with the additional sales options.

ralphd

 

[Dumbo]

Yea, I can't wait until they start buying back Vero Beach contracts. VB could be the only DVC resort that goes from being 60% sold out to 40% sold out in one year.


Dumbo

 

[colleen costello]

This made me think of a question. If a property sells slowly, does Disney every LOWER the price per point, say after a few years if there are points left? Or do the points just either stay the same or go up? We bought at BCV, which is popular, and already the points are going to cost more than we paid ($75). But if there are points left at a property for a long while, will Disney eventually offer them "on clearance?"

Just curious.

 

[Lesley]

There is a concept in sales of "devaluing" a product....this is exactly the reason we won't ever see discounts on DVC. They may give significant incentives if they have points inventory that they need to move...but not a discount. Just look at the additional Magical Beginnings offers that have been available at Vero Beach. The property never sold quickly like the WDW DVC resorts, therefore it has often had a better incentive for buying.

To discount would make it appear that the product is not worth the regular price....

 

[RobDoc]

DVC has never lowered the selling price, but they have, in effect, done so by offering different levels of MB.

Currently this is the case with all 3 resorts still offered by DVC. BCV has a MB for $5 per point- little more than the annual dues on those same points. HH has a MB of $10 per point and VB is offering a $15 per point MB.

Certainly, MB forces the member to forego one year's points, but for many use years, the $10 and obviously the $15 MB are worth consideration. They also effectively lower the original cost to $70 and $65 for those resorts.

 

[DVCDAVE]

Simply put, I DO NOT trust Disney (DVC) to control both, the PRIMARY and SECONDARY market for my timeshare interest (not to mention the annual carrying costs ie. dues). I can NOT see how I, or anyone would benefit, NOR do I see any advantages for any party, other than Disney (filling their own pockets with more of my hard earned cash).

Frankly, if they even try to do this, I'll be among the first in considering to file a class action lawsuit. The idea of Disney being the provider, controler and reseller, sends a cool shiver down my spine, and it should scare every other owner too.