What costs are involved in selling your DVC points?

[carriep1657]

We're considering buying into DVC. It really sounds like it will be perfect for us. But, let's say we join and, in a few years, decide it's not for us. What sort of costs are involved in selling your contract?

 

[CarolMN]

Unless you have a ready and willing buyer, you will need to pay a commission to a sales agent/broker. Commission percentages vary and many brokers have a minimum. (That's why small contracts are more expensive than larger ones if you look at the per point cost). It is also my understanding that you cannot sell your membership without paying off the morgage first if you have Disney financing. (I'm not positive on that, though).

Other costs are negotiable between buyer and seller. The buyer usually pays the closing costs (average between $400-$550). Either you or the buyer will have to pay the maintenance dues for the year. Contracts that have banked points and all the current use year points available are worth more than a contract with borrowed points.

Remember that Disney has the right of first refusal.

 

[Dean]

If you think there's much chance of you needing to sell in the future, I'd reconsider purchasing. If you're just trying to cover all the angles, I'd be more confortable. While most people that bought DVC at least 2-3 years ago could come out OK if they sold, I wouldn't count on this far into the future. Remember that DVC will start to be a depreciating asset within the next few years. At some point the Right to Use (RTU) and other market forces will start to affect the value and members will see the value of the DVC holdings deteriorate. If you bought from DVC at $80 pp (current price) and the price goes up to $100 pp in say 5 years, you'd likely have out of pocket costs of around $1500-2500 assuming todays market and continued demand. That doesn't take into account any usage.

 

[carriep1657]

Carol and Dean, thanks so much for your responses. That was what I wanted to know. I knew there would be people here that could answer my question. I don't forsee us selling. It's just something that I felt I should know before making the purchase.

 

[Johnnie Fedora]

Dean,

In your estimation, when do you think DVC will start to depreciate. Another 5, 10 or 15 years? Any guess on the top out price and year?

 

[ralphd]

Originally posted by Johnnie Fedora
Dean,

In your estimation, when do you think DVC will start to depreciate. Another 5, 10 or 15 years? Any guess on the top out price and year?

This leads to alot of speculation. The economy and other internal and/or external factors can affect the answer.
My guess is the price will top out in 2012 and start depreciating after 2022. People will still buy with 20 years left on the contract, but will not be willing to pay the full current price.
The real question is- 'Is DVD going to offer contract extensions to existing members and will they make it attractive for us to extend our contracts?' Think they will, but will wait and see.

ralphd

 

[Dean]

Originally posted by Johnnie Fedora
Dean,

In your estimation, when do you think DVC will start to depreciate. Another 5, 10 or 15 years? Any guess on the top out price and year?

I agree there are many factors. In general timeshare terms, I'd say about 25-28 years but DVC is no ordinary timeshare. If DVC is still selling and the expiration is still 2042, the price will not drop but track the DVC retail price. If DVC is done selling or a new resort (EP) has a later expiration, things will start to slowly depreciated. I'd guess there would be an initiall pretty big dip then a slow decline until the last 3-5 years, the price will approximate the closing costs and fees. Now if there is an extension, much of the changes will get pushed out to the future but eventually the price will start down. The other thing that will happen once DVC is done selling is that the price will start to vary a lot from one contract to another. You'll see one who bought for $30-40 pp and another who bought for much more.

If you ask me for a specific year, you must give the the variables above. Then I'd be happy to venture a guess, it'd be just as reasonable or not as anyone else's.

 

[Johnnie Fedora]

I was courious about the senario if there are no extensions on the 2042 date, and DVC is selling new units for another 10 years. My guess would be there would be a 30% drop in resale price pp. after 2012 or so, then a steady slow decline to 2042.