Selling your DVC back to Disney

[magickingdomrules]

Has anyone sold their DVC back to Disney? If so, was it easy or a hassle? Which resort did you sell and for how much did you get? Who determines how much you get for it and was it a long process? Let me know because 10% commision at the TSS seems high.

Thanks

 

[dianeschlicht]

I don't believe Disney buys contracts back directly. I could be wrong though. I thought the only way they bought them was if someone made an offer and they took it at THAT offer in ROFR. If you don't want to pay commission, maybe you could talk a friend into making an offer that you then submit to Disney for ROFR. If you lowball it, they will probably take it at that price.

 

[Deb & Bill]

And even if Disney ROFR's the contract, I think you still have to pay the company who listed it. If you aren't listing it, no commission.

 

[LisaS]

I've read a couple of reports here that Disney will buy back contracts at certain resorts (BCV for example) but is not interested in other resorts (I think it was HHI that someone asked about and Disney was not interested). The price they offer is VERY low: they offered somewhere around $55-$60/pt for BCV. Now if you've checked the resale boards at TTS, you know BCV typically sells in the high 80s/low 90s per point! So even with the 10% commission, you will get a better deal selling through TTS than selling back to Disney.

 

[jemiaule]

If you bring your own buyer to TSS to handle all the paperwork they charge a flat fee of $500 or 10% - whichever is less.

 

[AllieV]

I can relate what was told to me when I sat through the presentation about 10 months ago. The rep said they gladly buy back contracts, just call them. I was looking at buying into SSR. In fact, she said they discouraged trying to sell on our own. Maybe that has changed in the last year or maybe it was a standard thing to say.

 

[byoung]

I can relate what was told to me when I sat through the presentation about 10 months ago. The rep said they gladly buy back contracts, just call them. I was looking at buying into SSR. In fact, she said they discouraged trying to sell on our own. Maybe that has changed in the last year or maybe it was a standard thing to say.

Sure at a very low cost.

 

[Starr W.]

Sure at a very low cost.

Like $55/pt, so if you bought direct that's a pretty big hit in the pocket book.

 

[Tamar]

I called member admin about 6 weeks ago and asked for info about selling one of my contracts back to them. They sent me paperwork, and step one was "find a buyer".

So I called and left a message that I wanted to sell directly back to DVD, and they called to say they'd gladly buy back my BWV contract, but that they had no use for my HH contract. They said it was based on how many "developer points" they already had available. Given that I didn't want to sell the BWV points, I didn't ask about what they'd offer for those.

 

[DVC Mary]

We went through the presentation in Chicago & DH thought we should sell one of our BWV contracts so we could buy AKV.

Disney offered us $52 a point for BWV, which we paid $65 a pt for in 1999.

This is so ridiculous, b/c they'll buy contracts trying to make it through ROFR in the low $80s/high $70s at BWV. Their comment was that we wouldn't have to pay any commission fees or closing costs. I told them that a fair price if so would be in the mid $70s to high $80s. They said no way. Take it or leave it.

Interestingly enough the sale rep in Chicago, called us back right after that & never got back to us about extending their 7 day offer a few extra days, so we could figure out how to sell another way.

 

[GrumpyPop]

It would seem that Disney would offer a price closer to the open market rate instead of low-balling. That would, IMO, give added value to the DVC properties which in turn would allow Disney to ask for higher prices from new buyers.

Their offers, which are 20 to 30 % below TSS prices, are probably due to the fact that Disney is more interested in selling their new DVC properties first.. Perhaps once SSR and AKV are coser to being sold out the price Disney offers for the original properties may go up.

 

[chalee94]

It would seem that Disney would offer a price closer to the open market rate instead of low-balling. That would, IMO, give added value to the DVC properties which in turn would allow Disney to ask for higher prices from new buyers.

Their offers, which are 20 to 30 % below TSS prices, are probably due to the fact that Disney is more interested in selling their new DVC properties first.. Perhaps once SSR and AKV are coser to being sold out the price Disney offers for the original properties may go up.

if there are people lazy enough to sell for $55 a point, why offer more? i don't believe it would "add" any value to do so. and if someone plans to sell at a price where DVC can step in to ROFR it and make a profit, they can always do so later.

i expect values on original properties will eventually erode...meaning DVC will ROFR at lower and lower prices. presumably add-on prices will decline...we'll see.

when SSR and AKV are closer to being sold out, DVC will turn their attention to the next wave of DVCs: CRV, GCV...maybe hawaii or whatever...

JMO...

 

[JimC]

Why would DVC want to run a resale operation? There is an active market already established.

 

[GrumpyPop]

if there are people lazy enough to sell for $55 a point, why offer more? i don't believe it would "add" any value to do so. and if someone plans to sell at a price where DVC can step in to ROFR it and make a profit, they can always do so later.

i expect values on original properties will eventually erode...meaning DVC will ROFR at lower and lower prices. presumably add-on prices will decline...we'll see.

when SSR and AKV are closer to being sold out, DVC will turn their attention to the next wave of DVCs: CRV, GCV...maybe hawaii or whatever...

JMO...

I agree with most of what you posted. However, if DVC wants to optimize prices for their new offerings it would seem logical to me that DVC would want to set a basement on the prices of previous offerings. I know my wife and I would have probably not bought into DVC if the current prices for BWV VWL and other earlier offerings were at the same price or lower than their offering prices. We researched the current market and quickly determined that there was in fact some appreciation in value and that fact was, in our case, the clincher for deciding to purchase.

I see your point that the DVC management feels comfortable with the support being set by the free market but they should be ready to come in and lend some support should prices begin to falter, otherwise I could see interest falling in their new offerings.

One question that we still have about the DVC agreement expiration is how do most members feel they will be dealt with by Disney as the expiration date of their membership approaches? I assume DVC will express some interest in retaining these loayal supporters with early offerings for renewal.I know that scenario is still many years away but it will be a question/concern DVCand it's members will have to address.


I could see a scenario where some DVC members would look at rolling over from the older resorts to the newer offerings in order to maintain value. This, IMO, would have the effect of depressing the prices of the older resorts which in turn would hurt their resale value. So I am in complete agreement that the resale value of the older resorts will erode. The question is will this hurt DVCs effort to roll these properties over into new contracts?

The bottom line is that I feel DVC does have a vested interest in maintaining a certain amount of resale value in their properties above the original sale price. Otherwise they start looking a little more like the average time share operation.

 

[disneynutz]

Why would DVC want to run a resale operation? There is an active market already established.

Because Mickey loves money. It wouldn't be the first time that Disney pushed someone out of business to make a extra buck. It's called doing business.

 

[LisaS]

Because Mickey loves money. It wouldn't be the first time that Disney pushed someone out of business to make a extra buck. It's called doing business.

I agree Mickey loves money, but I don't think Mickey likes giving money back. When someone sells their contract through a resale broker, the broker doesn't buy the contract from the owner and then resell it. They handle the sale in exchange for a fee. If it takes months for a particular contract to sell the only loss to the broker is the delay in their compensation for the work they've done in listing the contract, relaying offers, etc. but they don't have any money tied up in the contract itself. When Disney buys back a contract from an owner there is an outlay of cash and that money is tied up until the points are resold. So I'm not surprised that Disney will only buy back contracts at certain resorts and at a significant discount.

 

[JimMIA]

Why would DVC want to run a resale operation? There is an active market already established.

Actually, Disney is already running a resale operation, and they have been for a long time. They buy whatever contracts they can at a price that is too low (either through ROFR or buybacks), and they resell them at a price that is too high.

It's a good business for them, it supports the resale price structure without tying up large chunks of capital, and it's good for many purchasers who feel more comfortable buying direct from Disney.

The already active resale marketplace is the best thing that ever happened for "new" DVC sales. It maintains high prices without Disney having to put their money in to support the prices.

 

[ElizabethB]

But Disney's ROFR supports the resale market. Without that, DVC would fall in value every year if, for no other reason, than each year is one year less of value in the "property".

As some have speculated, when the ROFR music stops, it will be interesting to see what happens. The ROFR music won't stop so long as Disney wants to keep building DVC properties (which must be extremely profitable for Disney since they are now electing to convert whole wings of their hotels to DVC). But, the market will at some point be saturated and Disney will have to turn it's attention elsewhere.

Speaking of saturation, already it seems like OKW and SS are available for a song with an AP rate (we're staying for a weekend next month through CRO and paying a whole lot less than the going $10 per point rate). Upgrades have been plentiful -- witness the raft of value guests staying in one-bedroom villas later this month!

 

[mikesmom]

You could always stay for a song in September. It's one of Disney's slowest times - school is back in, so less families; hurricane season is on, so cross off people who are bothered by that; it's still way hot in Florida, so cross off the travelers who like the cooler weather; etc. That's why the Free Dining also. Trying to tempt people in a slow period. And it's working - period are flocking to the low and moderate price resorts because they think they are getting something for "free". DVC rooms are the logical upgrade in my mind. Members have more sense than to want WDW in the heat and they can't get free dining with a DVC room. If Disney moves people up to higher prices rooms, they can re-sell those lower priced rooms.

 

[chalee94]

But Disney's ROFR supports the resale market. Without that, DVC would fall in value every year if, for no other reason, than each year is one year less of value in the "property".

IMO, you're ignoring both inflation and supply and demand as factors in pricing.

i would also disagree that ROFR "supports the resale market." ROFR is based on profit motive...unless you've seen some internal company memos that indicate otherwise, i don't think there's much more to it than that.

why was DVC unwilling to buy back HH contracts at $55ish a point? because they weren't confident that they could resell the points at a sufficient profit. based on the HH points they already have in inventory and add-on rates, DVC has a pretty good feel for what the true market values of contracts really are...and that's what ROFR is based on.

i suspect the notion that DVC should buy back the points to "prop up resale values" probably never occurred to them.

One question that we still have about the DVC agreement expiration is how do most members feel they will be dealt with by Disney as the expiration date of their membership approaches? I assume DVC will express some interest in retaining these loayal supporters with early offerings for renewal.

again, i think it goes back to profit motive. i don't think DVC will reward "loyalty" so much as market in such a way as to ensure that the money stays with the mouse. early offers for new resorts (i believe we got first dibs on AKV, right?) is a possibility, as is renewal if they decide to keep the old resorts as DVC properties. i wouldn't expect significant discounts or anything like that, though.