A Pre-Purchase Question and Request for Advice

[billa]

Hi All,

This is my first post because, until a few days ago, I had not even heard of the DVC!!! :confused: (I must have been living under a rock) Anyway, since looking into it I have decided that I am going to join ... it just has lots of advantages over other programs. I know I am not telling you anything you didn\'t already know.

I am strongly leaning toward Old Key West. I went onto the Timeshare Store and one of the things I noticed is that Disney has Right of First Refusal when you make an offer on a re-sale. My question is, what does Disney do with the re-sales that they buy back? Can I buy at Old Key West directly from Disney?

I will be reading lots of the posts here in the next few days but if anyone can share some pre-purchase advice, I would appreciate it. I am looking at about 200 points.

Thanks in advance,

Bill in Woodstock, Georgia

[KNWVIKING 2.0]

Disney will buy up resales and resell them at the current going rate, ( the rate DVC is selling that resort for ).

Advantage of the resale market: Price.

Advantage DVC direct: Ease.

[TimK]

Bill,

Normally if a contract is presented to DVC that\'s around $15 less per point than their current sale price, they will take it via ROFR.

Right now they are selling Beach Club points for $104 each. I doubt DVC would let a BCV contract go thru for much less than $90 per point. And why not...they know they can resell those BCV points very, very easily at the higher price.

The exact numbers vary by resort, and supply & demand also plays a big role. There isn\'t a whole lot of demand for points at the Vero Beach and Hilton Head resorts, so those may pass ROFR for considerably less.

OKW is an interesting situation because there are actually TWO ending dates. Originally contracts were set to expire on 1/31/2042. But about 6 months ago DVC decided to extend the contract another 15 years. Current owners had to either pay $15 per point for the extension or agree to give those extra points (2043 to 2057) back to DVC.

As you\'re looking at the resale market, bear in mind that most of the contracts you will see listed have the 2042 ending date. And as of right now it will cost you TWENTY-FIVE dollars per point to add those extra years. :ohmy:

However, if you buy OKW points directly from DVC, you will definitely get the full contract thru 2057.

You can find current pricing for all resorts here:


http://dvcnews.com/index.php?option=com_content&task=view&id=227&Itemid=173

Good luck and don\'t hesitate to ask if you have other questions.
Tim

[billa]

Hi again,

I thank you both for your input. I think I need to spend some time searching the forums for reviews of the various resellers. Of course I have found Timeshare Store and I just found ResalesDVC.com so I would imagine there are others.

By the way, I\'m almost 60 so it will really be my daughter who will be more interested in the end date of the deed. ;)

[TimK]

Also check out www.dvcbyresale.com.

I hate to name-names, but one that I have rarely heard good things about is GMAC. My understanding is that their most knowledgable DVC broker left, and many that are left do not have a good grasp of the DVC product.

GMAC will tell you that they are the \"approved\" DVC resale company (or some such title). In reality, the relationship is such that DVC receives some sort of commission override on every resale contract that GMAC sells.

Other than that, I\'ve generally heard good things about the companies you mentioned plus DVCbyResale. Sign up for their newsletters. If you see a contract that meets your criteria, I wouldn\'t hesitate to work with any of those three.

Bear in mind that an uncooperative seller can throw a wrench into things, but good agents will do their best to keep on top of that stuff.

When you get to the point of starting to compare resale contracts, keep a close eye on the point balance. A contract with banked points from 2007 available plus current year points should be viewed as worth more than another contract with the 2008 and 2009 (borrowed) points already used.

[billa]

Thanks again ... here is another question having to do with reservations. (I\'m not sure if I should start a new thread or not)

Let\'s say we make an offer on some points and it is accepted. We know that our first trip will probably be Sunday through Thursday, September 14th - 18th 2008. We are going to need a 2 bedroom. How hard are these accomidations going to be to get? Here are my desired locations in order of preference:

Wilderness Lodge Villas
Old Key West (I think this may be our Home Resort)
Beach Club Villas

Are there places online where you can check availability both before you are a member and after you have joined?

[TimK]

From roughly the third week of August thru September is pretty much the slowest time on-site. If you were able to book at the 7-month window, you would probably have your choice of any resort.

However, closing on a resale is going to take you 60 days--and even that is a best-case scenario. That puts you into mid-June...only three months from your anticipated arrival.

OKW will probably still be available, but I wouldn\'t count on VWL or BCV.

Don\'t know if this will alter your thinking or not, but as Viking pointed out in his first reply, the big advantage to buying direct from DVC is immediacy. If you agree to buy tomorrow and give a $500 deposit on a credit card, you should be able to book before the close of business on Monday. You could even ask that they check availability for your dates before agreeing to buy.

To buy resale, you first need to find a contract to your liking. Then you need to submit an offer and (hopefully) see it accepted by the seller. The offer then needs to be formalized and submitted to DVC for its Right of First Refusal.

DVC then has up to 30 days for ROFR.

After it passes ROFR, the closing is usually scheduled a week or two out. Finally, after the closing all of the paperwork is submitted to Disney so that they can record you as the new owner in their systems. That final step alone can take up to 2 weeks.

Add it all up and you\'re around 60 days...and that\'s assuming you don\'t get hit by ROFR. If Disney buys-back your contract, you start all over again.

[lllovell]

Can you even buy directly from DVC at the \"older\" resorts if you are not a current member? Or is it that there is a minimum for new members and then you can add on smaller numbers once you are a member?

Sorry - just reading that and I wasn\'t sure of the answer myself. :)

Laura

[TimK]

lllovell wrote:

Can you even buy directly from DVC at the \"older\" resorts if you are not a current member? Or is it that there is a minimum for new members and then you can add on smaller numbers once you are a member?

Yeah, you can buy the older resorts from DVC as a new member. They don\'t actively market that as an option since there isn\'t nearly as much profit involved.

For a resort like BCV or BWV, let\'s say they exercise ROFR at approx $90 per point. The going rate for those resorts from DVC is $104. That means they stand to GROSS only $14 per point on the transaction. When you add-in administrative and sales costs, there isn\'t much left in the end.

But for a resort like SSR or AKV, I would estimate that they spend only about $30-40 per point for construction. Add-in marketing and administrative expenses and there\'s still a lot of profit left with a sale price in the mid-$90s.

Selling the older resorts is a necessary evil. DVC is almost obligated to exercise ROFR because they use it to keep prices up. If they let the market set the price, you might see SSR resales for $60 per point. Why pay $96 per point for AKV or $94 for SSR (thru DVC) when you can get it for almost half on the resale market. :confused:

DVC uses ROFR to keep resale/direct pricing in the same ballpark. Then they leverage the advantages of buying direct (easy financing, immediate bookings, pick any number of points you need, pick your Use Year, etc.) to convince people that paying a little more to buy direct isn\'t such a bad deal after all.

So, yeah, a new member can buy the older resorts. For some there may be a waiting list to get the points. There are no discounts or incentives on the older resorts. And the 160-pt minimum still applies.

[PoohsPal]

lllovell wrote:

Can you even buy directly from DVC at the \"older\" resorts if you are not a current member? Or is it that there is a minimum for new members and then you can add on smaller numbers once you are a member?

Sorry - just reading that and I wasn\'t sure of the answer myself. :)

Laura
I know I\'ve heard of people doing this. You just have to be a little more firm with them. As in, I buy OK or not at all. They try to push towards teh current sales.