Resale

[lionqueen]

I've been thinking about buying into DVC and after looking at each resort would like to buy into OKW. I know that the only way to do this is through resale. So I was wonderding what you guys think. There is a current listing for 230 points at OKW. The listing says it has 68 points currently available with 211 points availabe 2/1/02. The asking price is $65 pp. Is this a fair listing? Are there any pitfalls to a resale? Should I be cautious of anything? What do you think I should negotiate for something like that? Any info would be greatly appreciated.

Ariel

 

[drusba]

That contract has the problem of not having many current years points. You would be basically buying to a deal where you would have to wait quite a bit of time to take any full trip unless you borrow; and if you start borrowing now, you will find yourself repeating that pattern every year. Considering that you have to pay closing costs in the resale (through Disney the $72 a point includes closing costs), I consider that contract way overpriced. Some one will probably buy it close to that price but I would not.

 

[lionqueen]

Thanks for you opinion! what should i be looking for? What would be a good deal?

 

[Richyams]

On that contract, $60 with the seller paying closing and current dues. Or $58 and you pay them.

$65 is high for a resale. $65 is very high for a resale with not many current points and none banked.

$65 gets silly for that contract if you have to pay closing also.

But, I do want to compliment you on your obvious intelligence in deciding that OKW was the place to own.

"From each according to his ability, to each according to his needs", Karl Marx,This has failed every time it has been tried, why do we still have liberals?

 

[drusba]

The ideal resale contract is one that has all of its current use year points intact. Even better is one that has those plus some banked points from the prior year.

With a resale, price per point, and who pays closing costs are negotiable (although absent negotiation it is presumed the buyer pays closing costs). What you need to do with any resale is decide what its true "value" is at the price you are willing to pay in comparison to just buying through Disney. Disney is currently charging $72 a point; that price includes closing costs, which for a resale range from $450 to $500 (closing costs are mostly fixed costs and thus do not vary much according to contract size). Thus, for a resale, to whatever point cost you pay you need to add closing costs to compare it to Disney's per point price.

Also, a big issue is financing. If you can pay cash a resale is an easy choice. If you have to finance, you need to compare to Disney. The lowest rate you can get for financing for a resale would be if you took a home equity loan on your existing home, which would be lower than Disney's rate. If you cannot do that though, you need to find financing in the market, and for resale timeshares, the rates are high, usually 3% higher than Disney is charging. That much difference in rate can easily mean that a $62 a point resale, where you pay closing costs, will actually cost more in total dollars than buying through Disney at $72 per point.

If you buy through Disney, you get a use year that begins 4 to 5 months before the contract month. For example, buy in April 2001, and you will get a December use year. That means you start with a full allotment of points from December 2000 and then get another full allotment December 2001. If the resale does not provide that much current use year advantage, like the one you mention, then its value in comparison to Disney is substantially decreased.Points have a rental value of $10 per point (current going rate).The contract you mentioned is 162 points short this year in comparison to a Disney contract and thus you would be giving up $1620 in rental value if you just bought from Disney and rented your first years points.

Thus, that contract you mentioned, if you have to finance, pay closing costs, and give up those points is, at $65 a point, much worse than you could do if you just buy through Disney. @

 

[gscott8075]

An oft-missed cost factor is maintenance fees.

You will have to pay the pro rated value of yearly maintenance fees after you close. For instance, if you buy in April, you will have to pay eight months of fees.

Many resales will negotiate this point.

In my OKW resale, we negotiated out of paying any maintenance costs for the banked points or for the 2001 points - that saved me $600 in addition to a reasonable price per point.

 

[lionqueen]

This last post has me confused. Reading this post it sounds like the maintenance fees are charged per month. I thought the fees were based on the number of points you have so therefore if there are 68 points you have to pay the fees only for those points. Please alleve my confusion

 

[Richyams]

"Prorate" is what Disney does. If you buy 333 point in April with a december use year, and if the dues were $3.33 per point annually. Disney would prorate your dues. You would actually owe a full years worth of dues having had use of the full December 2000 allotment....but rather than having you pay $1,000 (333 point x $3.33 per point), Disney would say that since you bought in April, 1/3 of the year os over, you only have to pay 2/3 of the dues from your December 2000 points. Or $666

In other words, you would only be paying eight months worth of dues.

"From each according to his ability, to each according to his needs", Karl Marx,This has failed every time it has been tried, why do we still have liberals?

 

[Richyams]

I know, my math was slightly off, sorry...but that is the idea.

"From each according to his ability, to each according to his needs", Karl Marx,This has failed every time it has been tried, why do we still have liberals?

 

[gscott8075]

I'm sorry I was not clear enough - thanks Rich.

Point is you can get Seller to take care of maintenance fees (which if she paid in a lump sum in January it will be easier to negotiate) you will be $3-$4 per point better than Disney...

Good luck!

[This message was edited by gscott8075 on 03-30-01 at 06:54 PM.]

 

[Dean]

Disney charges maint fees on a calendar basis, not use year basis. The end effect is that when I paid my dues in Dec, I was paying for 3 months of the 2000 points dues and 9 months of the 2001. It's a criticle issue for some resales. Many people including most members and most resales agents don't understand this. Bottom line in this scenario is that you should pay no more than $150 or so maint fees on this plan. I'd offer for no refund of maint fees. I agree the price is too high, you're likely better off buying WLV through DVC at that price for this package.

Dean