What is direct worth?

[dmunsil]

Dean, to say this, you would have to insist that any future risk of a direct or resale contract having new restrictions or being excluded from future benefits is equal. That does not follow common sense IMO. If you paid exactly the same amount, this difference in probability alone would say buy the direct contract. Even if the difference in probability was 1%, you should buy the direct one.

I have to agree with this. At some point resale becomes less attractive than direct. For me, if I could get direct at $10/pt more than resale I'd definitely buy direct. I think at $20, it would be very hard for me to justify direct, but if presented with that option I'm not sure how I'd go. Maybe some day I'd like to go on the member cruise; I don't know. Maybe there will be some reason I want to use points for a stay at Tokyo Disneyland because the cash prices go way up for some reason but the point prices are fixed for the year. Again, I don't know whether that will ever happen, but it could, and having options is worth money.

The differences are mostly intangible convenience features, so how people value them is going to vary widely. There are definitely people who know all about resale who nonetheless buy direct, because they can afford it and they want all the options. They want to be sure that whatever happens as far as resale/direct differentiation, they'll be on the better side. I think if they make that decision with both eyes open it's silly to say they're wrong. They just made a different value assessment.

 

[SFlaDisneyfans]

For our perspective it would be a combination of difference in cost (resale to direct) with size of the purchase. 20$ per point buying 300 pts is 6000$. 20$ per point buying 50 pts is 1000$. While I wouldn't consider paying an extra 6000$ to buy direct, I might consider paying an extra 1000$ for the convenience of direct (ie.. They had points and could just give them to me).

 

[Dean]

Dean, to say this, you would have to insist that any future risk of a direct or resale contract having new restrictions or being excluded from future benefits is equal. That does not follow common sense IMO. If you paid exactly the same amount, this difference in probability alone would say buy the direct contract. Even if the difference in probability was 1%, you should buy the direct one.

I would argue this difference is far greater then 1% given the business model of timeshares. So, I think this "no difference" argument has gone to the extreme and becomes very poor advice to people. If the difference in price for resale and direct becomes "meaningless" in terms of financial difference for the individual (which is clearly not the case today for many) a new buyer should buy direct for no other reason then just better future insurance against unknown changes to resale contracts or the inability to access new, still unknown direct benefits. I would argue there are more reasons then this as well, but this reason alone should be sufficient to make the value difference more then zero and tip in favor of direct.

NO, all I have to say is that the inherent benefit is in using DVC for DVC. I say that all the time and believe it to be so. Realistically why buy resale if all else is the same (price, points, etc) however, once one owns I don't see any real difference nor do I expect any given that I believe ALL the differences that are applicable are of no real value. It's possible that could change but very doubtful. And if you go to sell at some point there is absolutely no difference. What I say is that any inherent value of being a retail buyer is minimal at best. If you want to put a minimal value on it, I'm OK with that, but any more would be unreasonable IMO. Ultimately it comes down to timing and simplicity not really to risk.

 

[bakerworld]

At this point in our DVC life resale has no worth.

Had I been more savvy we would have purchased resale (although DH has trust and budget issues) for our initial and largest contract which isn't that large. At this point, we're only interested in ~50 pt DUY BWV contract. To find this contract on resale would require constant supervision and the ability to instantly contact the entity offering or constantly contacting resale agents to see if they can meet my specific need - which are extremely specific (unlikely between work and life ). Our circumstance diminishes resale value.

I've often seen pushed the same $$ direct will buy you 40% more resale - however, you will need to either become a renter - with all the attendant responsibilities entailed - or sell something to offset the increased AD on the points.

 

[Mickey'sApprentice]

I think there may be some apprehension for people new to the disboards to buy resale. I had been researching on the disboards for several months before we bought. Still, I was a little nervous on a subconscious level to send an $8000+ check in the mail to a company that I had never seen anywhere other than cyberspace.

Of course, that was 7 or 8 years ago...a lifetime in terms of internet acceptance.

 

[NHTikiBeckie]

At this point in our DVC life resale has no worth.

Had I been more savvy we would have purchased resale (although DH has trust and budget issues) for our initial and largest contract which isn't that large. At this point, we're only interested in ~50 pt DUY BWV contract. To find this contract on resale would require constant supervision and the ability to instantly contact the entity offering or constantly contacting resale agents to see if they can meet my specific need - which are extremely specific (unlikely between work and life ). Our circumstance diminishes resale value.

I've often seen pushed the same $$ direct will buy you 40% more resale - however, you will need to either become a renter - with all the attendant responsibilities entailed - or sell something to offset the increased AD on the points.

I don't really see people telling others to buy 40% more points though...I think their point is you could buy the same amount of points you planned to for 40% less with resale.

 

[Dean]

I don't really see people telling others to buy 40% more points though...I think their point is you could buy the same amount of points you planned to for 40% less with resale.

I agree, while many potential buyers may come up with the idea of buying more and renting (not a great idea IMO), I don't believe that's routinely recommended by anyone. What I have seen is people that said they bought a loaded contract and rented as well as I've personally recommended those looking at buying and reselling to consider simply adding on with less points (but more total).

 

[JimMIA]

I think there may be some apprehension for people new to the disboards to buy resale. I had been researching on the disboards for several months before we bought. Still, I was a little nervous on a subconscious level to send an $8000+ check in the mail to a company that I had never seen anywhere other than cyberspace.

Good point, but if the prospective buyer does even a little bit of due diligence, they can satisfy themselves that the person they are dealing with is legit.

The "big 4" resale brokers are not fly-by-nights working out of their garages. They are licensed real estate brokers, operating under very stringent laws and regulatory systems which protect the consumer.

There may be (are) differences in the quality of their experience, knowledge and competence among those brokers, but they all operate under exactly the same system as the realtors you would purchase your home through if you moved to the Orlando area. AND...under exactly the legal and regulatory requirements that govern DVC.

When you send your deposit or settlement payments in, they are handled under exactly the same laws and regulations as if you were buying a home...or buying DVC direct. There is NO difference...ZERO.

Just a little bit of research will disclose that, and should give a prospective purchaser enough confidence to buy resale.

 

[Mickey'sApprentice]

Good point, but if the prospective buyer does even a little bit of due diligence, they can satisfy themselves that the person they are dealing with is legit.

The "big 4" resale brokers are not fly-by-nights working out of their garages. They are licensed real estate brokers, operating under very stringent laws and regulatory systems which protect the consumer.

There may be (are) differences in the quality of their experience, knowledge and competence among those brokers, but they all operate under exactly the same system as the realtors you would purchase your home through if you moved to the Orlando area. AND...under exactly the legal and regulatory requirements that govern DVC.

When you send your deposit or settlement payments in, they are handled under exactly the same laws and regulations as if you were buying a home...or buying DVC direct. There is NO difference...ZERO.

Just a little bit of research will disclose that, and should give a prospective purchaser enough confidence to buy resale.

You do make a very good point. The big 4 are not fly by night in any respect.

 

[Dean]

Good point, but if the prospective buyer does even a little bit of due diligence, they can satisfy themselves that the person they are dealing with is legit.

IMO, anyone who has done sufficient investigation to justify buying should have done enough they SHOULD be comfortable with the resale process. The reverse is true as well. IF one isn't comfortable they either haven't done sufficient investigation or have dramatic enough trust issues that they are not going to make rational decisions. There are good reasons to buy retails in some situations, just not many situations where it works out as reasonable for most new buyers and none simply because of comfort alone.

 

[Anthony1971]

While this is a perk and could be taken away...
I have family who own a fair amount of points --bought at 55 a point with free passes until 2000...
Had younger kids now have older kids and trade for cruises as they want the points for grandkids.
Not the best use? in some cases yes in others no.
If you buy DVC for the long haul consider all options...
I bought direct but resale saved 0 to very little and sometimes cost more at that time... Infact there was a great promotion where some got a free vacation and sold the points for what they paid.
A few years ago... direct price were hard to swallow...
Now it seems the tables are turning a little.

 

[ELMC]

I don't really see people telling others to buy 40% more points though...I think their point is you could buy the same amount of points you planned to for 40% less with resale.

I agree, while many potential buyers may come up with the idea of buying more and renting (not a great idea IMO), I don't believe that's routinely recommended by anyone. What I have seen is people that said they bought a loaded contract and rented as well as I've personally recommended those looking at buying and reselling to consider simply adding on with less points (but more total).

One thing that I have advocated in the past (not sure it applies now) is that buyers considering a smaller resale contract look at their options for slightly larger contracts. We have seen many cases in which the net outlay for a 100 point contact was less than 20% more than the net outlay of a 50 point contract. At that point, depending on other circumstances, it makes sense to at least consider the larger contract.

IMO, anyone who has done sufficient investigation to justify buying should have done enough they SHOULD be comfortable with the resale process. The reverse is true as well. IF one isn't comfortable they either haven't done sufficient investigation or have dramatic enough trust issues that they are not going to make rational decisions. There are good reasons to buy retails in some situations, just not many situations where it works out as reasonable for most new buyers and none simply because of comfort alone.

I would like to add to this that unlike many other timeshare systems, DVC resale restrictions and usage rules are clearly defined. In my experience, there is much less risk and uncertainty with a DVC resale than one from another system. I think that people being uncomfortable buying DVC resale is a function of the buyer, and not the product.

 

[JimMIA]

One thing that I have advocated in the past (not sure it applies now) is that buyers considering a smaller resale contract look at their options for slightly larger contracts. We have seen many cases in which the net outlay for a 100 point contact was less than 20% more than the net outlay of a 50 point contract. At that point, depending on other circumstances, it makes sense to at least consider the larger contract.

But a 100 point contract is going to have double the MFs of a 50 point contract, and over the life of the contract the MFs usually comprise a much larger sum than the purchase price.

If someone is contemplating a 50-point add-on, I'd suggest they really try to work banking and borrowing (or even shorter stays ) rather than buy a small contract they may not need.

I would like to add to this that unlike many other timeshare systems, DVC resale restrictions and usage rules are clearly defined. In my experience, there is much less risk and uncertainty with a DVC resale than one from another system. I think that people being uncomfortable buying DVC resale is a function of the buyer, and not the product.

I don't know...I thought DVC did a very good job of introducing the resale restrictions, giving people plenty of time to adjust, but they've had some notable messes as well.

With any timeshare system it's important to know what is guaranteed and what can change. And sometimes things can change without the timeshare system's prior knowledge or approval. With DVC, the elimination of free valet parking is a classic fiasco. It would be extremely difficult to look more clueless than DVC looked on that one!

 

[Dean]

One thing that I have advocated in the past (not sure it applies now) is that buyers considering a smaller resale contract look at their options for slightly larger contracts. We have seen many cases in which the net outlay for a 100 point contact was less than 20% more than the net outlay of a 50 point contract. At that point, depending on other circumstances, it makes sense to at least consider the larger contract.

I think many of us, myself included, have recommended buying a cushion of points esp when the anticipated size were small. I also think that many of us, you and me included, have suggested that a slightly larger contract might be more cost effective, available and reasonable. But I read the point in question as stating that it was common for posters to be advised to buy more simply to rent them out, I don't believe that's true (nor reasonable).

Jim, while I don't disagree with the point (same applies to 400 compared to 200), I'd say that if one couldn't reasonable justify a slightly larger contract, they likely couldn't justify the smaller one also. The specifics would have to drive any specific thoughts or recommendations though. If one truly only needs 50 and can buy them reasonably, do so. However if the limitation is due to cost & fees in a financial sense they likely shouldn't buy at all, at least at that time.

 

[binkblum]

I recently added on at BCV and looked into buying through resale, but elected to buy through DVC. Part of my decision factored into how DVC will treat the owner of the points when they offer the extension (which they have only offered thus far at OKW). My guess is, if the points have been bought on the re-sale market, the extension will require the owner to pay an additional premium to "make whole". Just a guess, but part of my thinking.

 

[Orsino]

Is a quick reservation really worth it? If they think so, maybe they might want to slow things down a little and think about what they're doing.

A sidenote:
When I was first looking at DVC, I had an upcoming CRO reservation at AKL. I did the math and a quick direct purchase (including maintenance fees) where I could drop the CRO reservation and substitute in a DVC stay made the direct purchase price competitive with buying resale.

I ended up buying resale (SSR) anyway, but if I knew 100% I was going to buy DVC at AKV, doing so would have been cost-effective in my case.

But I absolutely agree with taking things slow. That's the main reason I didn't buy DVC before that year's trip. I don't like making decisions that fast and when a salesman pushes to be quick, I get even more worried about acting quickly. In retrospect I see that it would have worked out, but I didn't know it at the time.

 

[Dean]

I recently added on at BCV and looked into buying through resale, but elected to buy through DVC. Part of my decision factored into how DVC will treat the owner of the points when they offer the extension (which they have only offered thus far at OKW). My guess is, if the points have been bought on the re-sale market, the extension will require the owner to pay an additional premium to "make whole". Just a guess, but part of my thinking.

While this may be possible, I truly don't think it is. IF they offer an extension, they'll have to offer it to all groups and I believe the base price will have to be the same. What they could do, and I'm surprised they haven't already, is tie retail purchases to extensions as an incentive.

A sidenote:
When I was first looking at DVC, I had an upcoming CRO reservation at AKL. I did the math and a quick direct purchase (including maintenance fees) where I could drop the CRO reservation and substitute in a DVC stay made the direct purchase price competitive with buying resale.

I ended up buying resale (SSR) anyway, but if I knew 100% I was going to buy DVC at AKV, doing so would have been cost-effective in my case.

But I absolutely agree with taking things slow. That's the main reason I didn't buy DVC before that year's trip. I don't like making decisions that fast and when a salesman pushes to be quick, I get even more worried about acting quickly. In retrospect I see that it would have worked out, but I didn't know it at the time.

I think how one looks at this issue depends on when and the numbers. In years past when the difference between retail and resale was around 20% or so, getting a specific trip out of the deal and possibly a guaranteed reservation often reduced the difference such that it didn't matter. Now when the difference is much greater (even with recent increases), there are few situations where it wouldn't be better paying retail for a cash stay and waiting to buy resale if those are the only 2 choices though there are always possible options other than those 2.