Thinking of taking the plunge but in baby steps. Advice welcome!

[diznyfanatic]

Hi everyone!

I've been reading this forum like mad for the last several weeks trying to learn as much as I can and make an informed decision as to whether owning DVC is for us.

As great a deal as the SSR promo is, I really don't want to outlay that amount of cash for the minimum contract and don't want to finance. In addition, the DVC resorts that appeal to me the most are ones I can only obtain through resale, such as OKW or BWV or even VB for a nice change of pace. I know VB maintenence fees are quite a bit more and therefore more expensive in the long run, but something about that ocean keeps calling my name.

I am interested in starting off with a smaller contract to get my foot in the door and adding on to it in the future. This allows us to continue to assess our annual vacation needs in a way that is the most flexible for us.

Doing it this way, however, I'm obviously concerned about all the ROFR going on and don't want to keep having to start over, but I would likely use TTS to hopefully reduce that risk a little.

I have a few questions and hope they aren't silly...

Why would someone buy a stripped contract? Is there some benefit to that that I'm missing?

What do I need to know about Use Year on a resale? Are there advantages, or disadvantages, to having certain Use Years?

What do I need to know about contracts with banked points on a resale?

Are maintenence fees prorated between buyer and seller from the date an agreement is reached or from the date it passes ROFR?

I'm sure I'll have lots more questions in the event this becomes a reality, and really appreciate your time in assisting me.

 

[browniemtb]

Lots of questions...good ones.
If you are looking for a small contract, below 150 points resale will be your only choice. Stripped contracts mean that you have no points available to use until the new UY kicks in or the previous owner may have borrowed to leave you with nothing for 2 UYs. Some contracts have banked points and current points which is great. UY - tough question about whats the best. I believe UY go from Feb to Dec no Jan UY. What ever the contract has you'll have to stick with it. I find in my circumstance that a Sept Oct UY would have been nice, but I'm happy with Aug. Dues during resale are negotiable?? Not sure. Some will actually say dues paid. BWV is still available for sale through Disney even though its a sold out resort, but you would have to purchase the minimum of 150 points.
Good Luck
Brownie

 

[poohj80]

You might also consider how much you'll pay in closing costs when buying a small contract via resale. I think closing is around $500 no matter how large the contract which makes it an extra $20/pt on a 25 pt contract.

 

[Caskbill]

It looks like you've done your homework very well.

Why would someone buy a stripped contract? Is there some benefit to that that I'm missing?

Reasons might be because it's a lower price, and the seller should be picking up the maintenance fees due to missing points. It may appeal to someone who won't be able to go to WDW until 2007 or so, and in that case would not need nor want 2006 points, and prefers the lower selling price.

What do I need to know about Use Year on a resale? Are there advantages, or disadvantages, to having certain Use Years?

Resale Use Years will be whatever the original contract had, so you can't change it. Besides being the annual date you get your new allotment of points, the Use Year Month is only important if you need to cancel a reservation. Some try to select use year months that meet their specific travel timeframes.

For example, if you had an October Use Year, and generally travel in September, it could be bad if you cancelled a reservation, for example in August. Points would return to you but you would be past your banking deadlines so would have to find some other way to use those points or lose them, since they would expire on Sep 30th.

BTW, there are only 8 Use Year months. (Jan, May, July, Nov are not DVC Use Year months)

What do I need to know about contracts with banked points on a resale?

Banked points most likely would be a plus, assuming you can use them. Having banked points would add more 'value' to the contract so you can figure the worth to yourself based on being able to use the points or not.

Are maintenence fees prorated between buyer and seller from the date an agreement is reached or from the date it passes ROFR?

Maintence fees are negotiable. Maintenance fees are based on the calendar year, not on the use year. When someone buys from Disney, fees are prorated on the remaining months in the calendar year.

When you pay maintenance fees, you are NOT paying for that USE YEAR's points. For a resale contract, maintenance fees should be adjusted between buyer and seller, and since remaining points can be anything from none to fully banked, then it makes sense to calculate maintenance fees based on points according to their use year month.

If someone had a June UY, then in January 2006 they paid maintenance fees for the full calendar year 2006, it can be looked at as 5/12ths of the annual fees applied to 2005 UY points, and 7/12ths of the annual fee applies to 2006 UY points. Using this method and looking at banked, borrowed, or regular allocation points in the contract, you can calculate how maintenance fees can be applied toward those points.

Think of it this way. Suppose someone bought a new contract from Disney in Dec 2005 and received all the 2005 points. They only paid maintenance fees for one month. If they use all those 2005 points last month (January 2006), and paid the January 2006 calendar maintenance fees, and so now the contract has only 2006 points remaining, and they want reimbursement for ALL the January 2006 maintenance fees stating the buyer is getting all the 2006 points, effectively they are trying to get the buyer to pay for 11/12ths of the fees on those 2005 points that they completely used. Thus they got a full years worth of points and only want to pay 1-months worth of maintenance fees on them. IMHO this is probably the most misunderstood concept about whether buyer or seller is responsible for specific maintenance fees.

So to answer your question, maintenance fees should be based on the use year month involved, not the date of the contract or other date.

If someone sold you a Dec UY contract which had no 2005 points remaining and all 2006 points remaining, you should only pay 1/12ths of the annual fee, basically pro-rating it from Dec 1, 2006 to Dec 31, 2006. That's exactly the same way the buyer paid fees when Disney pro-rated them from Dec 1, 2005 to Dec 31, 2005.

Hope this helps.

 

[diznyfanatic]

Wow, thank you ALL so much for taking the time to share your incredible wealth of knowledge with me.

There is definitely lots to consider when making this type of investment, but we love WDW so much and now that we are possibly going to be returning more frequently with my 4 year old granddaughter, it seems like DVC is earning more and more of our attention.

I'm still crunching numbers and trying to determine the best avenue for us based upon expected vacation times, number of family travelling, etc, but it is such a nice perk to be able to seek advice here.

Thanks again, your assistance is very much appreciated.

 

[byoung]

Good luck on your decision, would like to Welcome you Home soon.

 

[poohbear7]

Good luck.

 

[Daitcher]

Others have answered your questions quite well so I won't add to that. I'd recommend a purchase of an on site DVC Resort as opposed to VB. Those higher dues will really add up over the life of the contract. Aslso I have always had good luck getting into VB. I even got a Beach Cottage there once at 7 months. We love VB and will be adding on around 400 points there this fall. I already have 350 SSR points to cover my on site stays. The only reason I'm adding on at VB is to have the 11 month booking advantage to get those Beach Cottages. They are the best. Also don't rule out SSR. The extra 12 years and the current promo price are very hard to pass on. 12 years of extra use is worth a lot of money. 150 points there at 83/pp isn't cheap but is a comparative bargain as the price pp will increase to $101 soon. If you can swing I'd consider the 150 buy in. It is also very easy to get a room at OKW at the 7 month mark due to the size of the resort. BWV are tougher but really doable except during F&W Fest. and at Christams time. If you don't travel those periods or don't book at 8 months or more home resort is a moot point. Good luck with the decision, DVC really is a great program for those that plan on spending the vast majority of time at one of the DVC Resorts including VB & HH.


DAVE

 

[bluedoggy]

We too weren't interested in buying a large contract, as we wanted to pay cash, and didn't want to get stuck with more annual fees than necessary. We found a great 100 pt contract at OKW through The Timeshare Store last spring. They are great to work with and offer lower closing costs for smaller contracts. Just give them a call. They are "no pressure" and we had great service. Just figure out how much you travel, type of room (we always just get a studio) We're never in the room, always in one of the parks or enjoying everything Disney has to offer.... The DIS members gave us lots of good advice, and we are thrilled with our purchase. Looking forward to "going home" again in November All booked and paid for That's the way to go!!!