Would you back out (lose deposit) in light of all this?

[JPKnapp]

Hi all.
In the stroke of the worst timing possible, I locked into DVC after years of looking with 3 contracts totaling 225 points at BLT. One has closed already (50pts) and other 2 (75 + 100) are awaiting closing. Due to small contracts, the price per point is pretty high.

With the entire collapse of everything, would you back out and lose the 10% deposit to live to fight another day? Cash is king right now so the ROFR is going to be easier unless buyers are already lined up.

Thanks for the thoughts.

 

[FreeTime]

If you have other money in reserve in case you need it, I would move forward if your desire was to have small contracts. We will rebound at some point. You will be glad to have DVC during lean financial years (if it comes to this for you) as you can use the resort and get away from it all if you can keep up with the dues.

 

[zavandor]

It's very difficult to answer because it depends on your personal situation, which we don't know, and external factors we have no idea how they'll end.
If you're a doctor, you're going to do a lot of extra time, if you own a restaurants you'll have difficult times ahead. DVC is a luxury, a way to prepay for the hotel part of a very expensive vacation (tickets, food, travel). If you think your personal situation might be at risk in the coming months, I'd cancel and keep the extra security that cash would give you.

If your question is "do you think in a short time the prices of resale contracts will drop below 10%?". Then your guess is as good as mine. It all depends on how long this crisis will last and if we end in a long term recession because of it. My opinion is that this won't be over in 1 or 2 months and there is a very high risk the economic consequences will be terrible and long lasting. If it's as bad as the 2008 crash, then in 3 years contracts will cost half what they are now, or lower.

 

[TraderSamWDW]

Really depends on how well you can handle a possible/probable recession, and possibly being unemployed.

Also... could u get 1 150 pointer as opposed to 2 75s?

 

[MickeyMouseEsq]

I know people have strong opinions on this, but I personally don't think DVD will start allowing resale contracts to pass ROFR at lower prices because of the current economic issues. So if the question is whether you might get a better deal, I wouldn't bet on it.

If the question is whether you should be spending money on deluxe vacation accommodations when the world is losing its mind and Disney parks are currently shut down--then, yeah, it's a matter of personal finance. I'm waiting on my 2nd contract to close and have thought many times that this is a bad time for $10-20k to be going to a timeshare. Because I have no current reason to suspect my employment is at risk, I have decided to just stay the course for now.

 

[wilbret]

I think we will climb out of this thing pretty quickly. There will be a lot of pent up energy, which will invigorate retail and restaurants pretty quickly. Once auto plants/etc are back online, parts suppliers, etc, will go back to work. I believe Q3 and Q4 will be strong.

I think this is quite different from other types of recessions, where there is no market for goods. I don't believe we are entering a period of austerity. Amazon is hiring 100,000 workers to keep up. Demand is there. My segment is building products, and right now we are still going strong. Depot and Lowe's are humming, even with reduced hours... hope that it keeps up.

But I am not a doom and gloom guy...

 

[Sandisw]

Just be aware, if you are beyond your 10 Day window, the cost to you will be more than just the deposit.

I would check with your broker to see what other costs you could be held responsible for. In another thread, I believe you owe the commissiion to the broker that normally is paid by seller.

 

[ELMC]

Hi all.
In the stroke of the worst timing possible, I locked into DVC after years of looking with 3 contracts totaling 225 points at BLT. One has closed already (50pts) and other 2 (75 + 100) are awaiting closing. Due to small contracts, the price per point is pretty high.

With the entire collapse of everything, would you back out and lose the 10% deposit to live to fight another day? Cash is king right now so the ROFR is going to be easier unless buyers are already lined up.

Thanks for the thoughts.

Backing out is kind of a crappy thing to do, but if recent events put you in a situation where food and shelter have all of a sudden become a question then you should look into it. I am at ROFR right now on a contract and while I'm not thrilled that it's probably not worth what I'm paying for it anymore, I'm not worried about the money so I'm going through with the sale. Just as I'm lamenting that I bought at the wrong time, there's someone out there celebrating their good fortunes. That puts the universe in stasis and I'm ok being on the "losing" end of that equation.

 

[SleeplessInTO]

I wouldn’t back out, but that’s based on my own personal financial situation and vacation plans.

If this is really as bad as some folks think it will be (like 2008), then hopefully we will have lower crowds. And I’ll be glad I have my DVC to help make the trips a little more affordable. I’m assuming DVC will have some savings over booking with Disney direct.

If it’s just a blip, then life continues on.

But only you (and perhaps your spouse) can make this decision for you.

In terms of cost, my understanding is the deposit you paid will be split between the closing company and the broker (for their commission). The seller will have to relist. But I echo the earlier comment to check your contract for the actual details.

 

[zavandor]

I know people have strong opinions on this, but I personally don't think DVD will start allowing resale contracts to pass ROFR at lower prices because of the current economic issues. So if the question is whether you might get a better deal, I wouldn't bet on it.

During the recession following the 2008, ROFR was almost zero for years. It is possible that DVC might think this is only temporary and they might be more aggressive, but that's not what happened in the past. I saw BWV contracts passing ROFR at $48.

 

[Cyberc1978]

I'll say it depends.

You need to figure out if you are out more than just the deposit if you are how much more?. If you can accept to loose the total amount and you feel better and are able to sleep better then you should cancel.

After all its more important to be able to feed your family than to buy a timeshare. DVC timeshares will be around long after the Covid-19 virus is gone.

 

[JPKnapp]

Just as I'm lamenting that I bought at the wrong time, there's someone out there celebrating their good fortunes. That puts the universe in stasis and I'm ok being on the "losing" end of that equation.

You know what, ELMC, I am going to hang my hat on this. I have to hold faith that me buying is going to help someone out. My overall job isnt at risk (healthcare IT) and I had the cash -just less of it now as I didnt pull out of investements in time - but we'll be able to weather this. Maybe I'll use the upcoming financial disaster to get in more points. We'll just see.

 

[DianaMB333]

I agree that it is an awful thing to do.. but just did it .. it was a large deal and having the cash available is better for me to manage the downturn.. i.e my brother’s company did a furlough, some family rely on real state deals rtc.. so I prefer to play safe.. i contact the broker and they were very supportive in voiding the documents (already pass ROFR)... so it is defitenly more a personal position than a consideration of how the prices will be after all of this..

 

[ELMC]

I agree that it is an awful thing to do.. but just did it .. it was a large deal and having the cash available is better for me to manage the downturn.. i.e my brother’s company did a furlough, some family rely on real state deals rtc.. so I prefer to play safe.. i contact the broker and they were very supportive in voiding the documents (already pass ROFR)... so it is defitenly more a personal position than a consideration of how the prices will be after all of this..

I think it's a spectrum where one end is backing out because you think you can get a better deal in the future and the other end is backing out because you need to eat. The closer you get to that end of the spectrum the easier it is to justify backing out.

 

[E2ME2]

I agree that it is an awful thing to do.. but just did it .. it was a large deal and having the cash available is better for me to manage the downturn.. i.e my brother’s company did a furlough, some family rely on real state deals rtc.. so I prefer to play safe.. i contact the broker and they were very supportive in voiding the documents (already pass ROFR)... so it is defitenly more a personal position than a consideration of how the prices will be after all of this..

Sorry to see it come to this - I'm still in the middle of a deal.
Can I ask what fees, beyond the deposit, did it cost you to back out ??