The new resale rule: The Empire Strikes Back

[lugnut33]

Not sure what you mean by your statement. When I bought in way back in 2000, there was a minimum buy in of 160 points. Several years ago they lowered it to 100 points on specific resorts. i never looked at it as "getting stuck" when I made my purchase.

No one has mentioned ROFR. If being able to use points on cruises, etc. is important to a buyer than they will go direct to Disney. If they want a resort like BWV or BCV, Disney is going to have to maintain an inventory of sold out resorts. So doesn't it follow that Disney may be exercising ROFR a lot more often? That appeals to me as a seller (I sold Wilderness points about 5 years ago and Disney exercised ROFR - had a check in hand within two weeks). Will the price be lower? Probably, but I have had ten years of great vacations with lots of memories.

JMHO

It wasn't an initial min. purchase, it was a minimum add-on purchase they implemented.

I don't think anyone is saying they havn't got great vacations out of the deal. You need to seperate that from resale prices. It may not concern you now, but you never know it could. Someone put into a position to sell over the next few years are probably going to see a huge loss in the resale value of their shares due to this.

 

[lugnut33]

It's sort of like buying a new car. As soon as you take it off the lot it's worth a lot less (buy direct from Disney, and as soon as you sign it's worth whatever the resale market is) and nobody at the dealership will tell you how much your car will be worth at a later time. However, you're probably going to be upset if the car devalues more than you think it should.

Of course, there are no gaurantees.

 

[Figment2]

It wasn't an initial min. purchase, it was a minimum add-on purchase they implemented.

Minimum add on is still 25 points (know that because that's what I bought at BLT). If you want incentives, then it has always been at least 100 points (if not more). Events I have attended at Doorway to Dreams had tiered incentives (the more points you bought, the more incentives you received). I have added on 6 times and since they were all small never received incentives (especially since they were mostly at my initial home resort).

 

[StitchBuddy]

whether you buy direct or not.

Iagree!

 

[Chuck S]

It wasn't an initial min. purchase, it was a minimum add-on purchase they implemented.

I don't think anyone is saying they havn't got great vacations out of the deal. You need to seperate that from resale prices. It may not concern you now, but you never know it could. Someone put into a position to sell over the next few years are probably going to see a huge loss in the resale value of their shares due to this.

Actually, it was a very short lived minimum add-on purchase for specific resorts. If you were purchasing an add-on at the hot new resort of the moment, you had to purchase, I think 100 points. The problem is many people looked at that, and purchased more points than they actually needed long term, just to get a stay or two at the new resort, and then planned on selling their add-on via resale. Even if the minimum is 25 points, that isn't a well thought out business plan.

1) You should never buy more points than you can comfortably afford.

2) You should never buy thinking you will receive anywhere near direct sale prices via resale.

3) Never buy any timeshare for short term use, the value is in long term usage.

4) Know what you ar actually buying, read the documents or pay someone to advise you, while within any timeframe the state allows to recind.

5) Don't blame DVC or Disney if you buy more timeshare than you need, it is your personal responsibility.

 

[CMOORE185]

No, not at all. My point value will be exactly the same after March 20 as before. I can stay at my home resort for the same number of nights, based on the 2011 pont chart, after March 20 as before.

The value of any timeshare is in the use of the timeshare, just as the vlue in any vacation is in the trip itself. If you based any leisure travel solely on a cost value, we'd all stay home and never go anywhere for fun.

I agree

 

[lugnut33]

Actually, it was a very short lived minimum add-on purchase for specific resorts. If you were purchasing an add-on at the hot new resort of the moment, you had to purchase, I think 100 points. The problem is many people looked at that, and purchased more points than they actually needed long term, just to get a stay or two at the new resort, and then planned on selling their add-on via resale. Even if the minimum is 25 points, that isn't a well thought out business plan.

5) Don't blame DVC or Disney if you buy more timeshare than you need, it is your personal responsibility.

DVC was selling BLT points based on a points chart that changed a couple of months after sales had started leaving many people (not me) a couple of points shorts in staying for the nights they wanted (remember the point reallocation that moved points from the weekend to weeknights?). Then they had the minimum add-on (which I believe was 100 points at that time). Of course DVC was well within their rights to do it, but it left a bad taste in many peoples' mouths.

Personally, I don't like the idea of viewing timeshares as a zero sum game when I can see what resales are selling for. One has to completely ignore that to not put a monetary value on their points.

 

[px57chevy]

This will definitely affect resale prices if we ever (God forbid) have to do soemthing drastic. Which will mean that Disney can buy them back cheaper. i would not be surprised if their ROFR's increase.

 

[nytimez]

This will definitely affect resale prices if we ever (God forbid) have to do soemthing drastic. Which will mean that Disney can buy them back cheaper. i would not be surprised if their ROFR's increase.

This won't "definitely" do anything.

There will still be people who want to buy resale. Those people aren't going anywhere. And for many of them, the savings to be had on resale will outweigh the loss of this benefit.

I think ROFR actually helps DVC sellers in this case, because resale buyers can't expect a huge discount based on the new rules.

 

[Brian Noble]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

Well, it's not "fair" (in some sense of fairness). And, we might wish they wouldn't do it. But, it is within their power to do so---anything that is not explicitly part of the condominium plan in which you own a leased interest can be granted or denied to any subset of members for any reason.

 

[lugnut33]

What would be considered a big impact?

I would consider a 25% decline a big impact. Some might say 50%.

 

[chalee94]

What would be considered a big impact?

i'd agree that 25% would be a big impact. i expect more like a 10% change at most.

 

[maminnie]

This will definitely affect resale prices if we ever (God forbid) have to do soemthing drastic. Which will mean that Disney can buy them back cheaper. i would not be surprised if their ROFR's increase.

Maybe ROFR will increase after resale values possibly fall in the months ahead. DVC could then extend the life of the ownership interest similar to new properties today, and sell these DVC properties all over again.....all at the current owners expense and with no new building.

Could this be part of their business plan......????

 

[crisi]

Maybe ROFR will increase after resale values possibly fall in the months ahead. DVC could then extend the life of the ownership interest similar to new properties today, and sell these DVC properties all over again.....all at the current owners expense and with no new building.

Could this be part of their business plan......????

Likely. They have to address what to do with BWV, BCV and VWL so they don't regain the maintenance costs for all that real estate without having the maintenance fees to offset them. The way they did the OKW extension was horrible - but they had a legal issue and had to do it that way. So I don't think they'll do that again. Better for them gather points for the older resorts, then rerelease those contracts another time with a longer life.

That's a better option for members than a probable alternative, which is that Disney lets these properties die towards the EOL of the contracts with the intention of bulldozing the properties and rebuilding or letting the land lay idle

 

[wdrl]

What would be considered a big impact?

I would consider a 25% decline a big impact. Some might say 50%.

If the markets respond rationally, I suspect the impact of the loss of the exchange privileges on resale prices will be minimal. Although having the exchange privileges adds some value to our Memberships, I doubt that buyers would pay $10 to $50 to add this feature to their points. For example, lets assume there are two classes of resale deeds on the market: One class has full exchange privileges and the other has no exchange privileges for Disney, Adventure, and Concierge Collections. How much of a price difference would you expect to see between those two classes? Do you think the first class would see BWV deeds at $66 a point and the second class at $33 a point?

It will be interesting to see how the BCV resale prices react to this change. Currently, DVD is regularly exercising ROFR on BCV resales at about the $80 to $82 price mark (see http://www.disboards.com/showpost.ph...postcount=3559 and http://www.disboards.com/showpost.ph...3&postcount=80). To get past ROFR, it appears that a BCV buyer has to offer about $82 to $85 a point. If the value of the lost exchange privileges is about 20%, then one would expect the bid prices for BCV to drop from $82-$85 to about $65 to $68. But will sellers list their deeds for 20% less than today's prices? Certainly not, if DVD maintains its ROFR stance at $80-$82.

We have no idea what DVD may do regarding ROFR at BCV after March 20, 2011. If DVD drops its ROFR price, I suspect that BCV resale prices will react accordingly. But the key distinction to remember is that any change in BCV's resale prices will be due to the ROFR factor and NOT because of the loss in exchange privileges.

 

[mopee3]

Maybe ROFR will increase after resale values possibly fall in the months ahead.

What resale values are going to fall?? Oh wait before we bought into DVC we came to the conclusion that we wanted DVC so we could stay in DVC resorts and not for anything else. I thought long and hard about the question of, "would I still want to belong if I could only use the points at DVC resorts"? The answer for us was a resounding YES!!

So... if the resale values go down, guess what, we can get more inexpensive points for the reason we bought in the first place. I am so loving this decision.

After a few posts I still love the Icons, can ya all tell??

Now you all go take on the day.

Moe

 

[huey duey & luey]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

yet again relate it to buying a used car. Many dealerships now will pre certify a used car and provide additional warranties. If you buy from a used car lot or an independent seller, the price maybe less but so are the benefits

 

[Sandisw]

No, not at all. My point value will be exactly the same after March 20 as before. I can stay at my home resort for the same number of nights, based on the 2011 pont chart, after March 20 as before.

The value of any timeshare is in the use of the timeshare, just as the vlue in any vacation is in the trip itself. If you based any leisure travel solely on a cost value, we'd all stay home and never go anywhere for fun.

Completely agree! What I bought and why I bought it will be no different after March 20th, than it will be today.

 

[epd0407]

The U.S. Government can up your taxes to 75% if they wanted to. It wouldn't be against the constitution but does that mean they should?

 

[Mississippian]

If the markets respond rationally, I suspect the impact of the loss of the exchange privileges on resale prices will be minimal. Although having the exchange privileges adds some value to our Memberships, I doubt that buyers would pay $10 to $50 to add this feature to their points.

DVC owners and purchasers clearly are not rational. The added value of a contract that ends in 2054 instead of 2042 is maybe $3 per point, yet many OKW owners rushed out and paid $15 per point to extend their contracts. Back when SSR was the only DVC property being marketed, owners there would crow about how that property would retain more value because of "Twelve Extra Years." The market shows that "twelve extra years" is not nearly as important as location and access to food, newspapers and drinks, but there was no telling them that back then.

The loss in rights with the new rule versus direct buy is really minimal. Using DVC points for the Disney Collection or to cruise is burning money. But for the new buyer, it will make the resale contracts look truly inferior and will thus lower the price. Add to that the shorter years of the older resorts -- which from a time value of money reduce their actual value very little -- and you will have new customers willing to pay much less than at present for resale contracts.