Did another DVC meeting

[wilkeliza]

You can usually still get them to offer a 100 point buy in. A simple hemming and hawing over the price, saying we don't need that many points etc, and your guide will often excuse themselves, and come back with the ability to get you in the door at 100 points.

When we did our meeting last year we got them to offer us 100 because we are just young adults and there were only 2 of us. No need to travel during the crazy months and we also go during the down time so even 160 was more than we would ever use in a year unless we started going for much longer trips.

 

[orky8]

There are 2 primary reasons to consider a DVC purchase thru resale:

1. You want to save money, a lot of money.
2. You want a smaller membership. (In recent years, Disney has put in place a 160-point minimum for a first time buyer. Older contracts are available for smaller amounts.)

If these are less important to you, you should consider purchasing a DVC membership directly from Disney.


The DVC resale market is thriving and there are several reputable listing agencies available to help you thru the process. However, purchasing a resale is more time-consuming than purchasing from Disney. For obvious reasons (they set the rules!), Disney is in a position to make the direct DVC process faster and easier. However, it is inaccurate to suggest that Disney's Right Of First Resusal (ROFR) currently is a major concern for any WDW resort other than Old Key West. (For some unknown reason, Disney seems to be buying a lot of OKW contracts.) In 2008 and before, Disney used to exercise ROFR much more frequently. (This is a matter of public record, not an opinion.) More recently, Disney has exercised its right of ROFR much less frequently (see OKW exception). (Again, public record.) My opinion is that because of the number of properties previously ROFR'ed and the weak economy since 2008, Disney has an excess inventory of points at older resorts.

Someone who is considering a DVC purchase should look into both the direct and resale markets and make their decision based on what's most important to them.

Actually, I would flip this and say there is only 1 reason NOT to buy resale, and that is you don't want to risk only being able to use your home resort. (Even though the risk is tiny).

The only thing you are ever guaranteed in making a purchase is use of your home resort (this applies to both direct and resale). Disney has taken away some abilities of those using resale contracts (sold after a certain date). They could take away the exchange abilities from anyone (resale or direct purchasers) at any time, but I think that is incredibly unlikely, and it is possible, though again, unlikely, that if there were cutbacks, they would only be against resale contracts (and if the follow previous practices, those purchases before the date of the policy change would be grandfathered). But if you are super risk adverse, then I would consider purchasing direct. Or if you want to use points for cruising or adventures (not smart).

But if you KNOW you want to only go to one resort or your spouse will kill you, then I can't understand why someone would purchase direct when they could purchase resale for thousands less. Not my money, so I don't care. But, I agree with GoofGoof, don't go around calling something suspicious when all the evidence indicates it is a perfectly legitimate activity. And, even if you don't pass ROFR, doesn't hurt the buyer, they will just try purchasing another contract (or direct).

 

[disneyrcks]

Well that didn't take long...

http://forums.wdwmagic.com/threads/so-my-stand-against-wdw-has-begun.839296/

I found that thread to be very funny and entertaining. Not in a negative way, and not that anyone was wrong. There was just so much going on in it that it played out almost like skits on a show.

The day I wrote that post I was ticked off with Disney and typed before I thought. I do it a lot.

I don't care. Why do you?

Kidd, I am very indicisive. I have always been fine with our DVC purchase and even instigated it. However, now that we are ready to buy a home and start a family, I sometimes ask my husband if we should sell it. We can afford it, even more so then when we bought it, but the way I worry and the indecision in me still gets me. Maybe it is anxiety. I do not think we would ever give it up, but I do see a bit where you are coming from. However, with all of the threads and research, it just may never be for you. Maybe you would feel better if you just decided against it and gave up on it.

 

[dreamfinder]

Speaking of Disney's ability to "take away" perks "from anyone (resale or direct purchasers)", years ago all DVC memberships (direct & resale) included valet parking at the Boardwalk. Not any more.

As you indicate, the fine print gives Disney the right to take away nearly any perk from any DVC member with the exception of being able to book at your home resort. It's just not in Disney's best interest to do so.

Wasn't this actually something that the members voted on? I thought they put it out to a vote that valet was costing X dollars per member. Do you want pay that as an increased cost in your dues or do you want to drop it.

 

[toolsnspools]

It's interesting that DVC is using ROFR on OKW more often these days. Are the prices getting too low on the resale market or are they entering a phase where they plan to slowly re-purchase the entire resort? I have to think that the long term vision was to own the resort after the contracts were expired. Then again, they seem to want to secure as many long term vacationers as possible with all the new DVC resorts being built. I guess since selling contract extensions went so poorly they don't see re-selling the same resort as a viable option.

 

[GoofGoof]

It's interesting that DVC is using ROFR on OKW more often these days. Are the prices getting too low on the resale market or are they entering a phase where they plan to slowly re-purchase the entire resort? I have to think that the long term vision was to own the resort after the contracts were expired. Then again, they seem to want to secure as many long term vacationers as possible with all the new DVC resorts being built. I guess since selling contract extensions went so poorly they don't see re-selling the same resort as a viable option.

This is an interesting point. I assumed once the contracts were up they would do major overhauls of the resorts and then resell them for another 50 years. OKW does tend to be the lowest price resale so maybe they are seeing a price that is just too low to let pass.

 

[flynnibus]

Are the prices getting too low on the resale market or are they entering a phase where they plan to slowly re-purchase the entire resort? I have to think that the long term vision was to own the resort after the contracts were expired

They get that anyway (owning it all at the end) - they don't need to buy any contracts for that.

I think it's more to protect their selling point of new DVC points. The problem is today is 'a point is a point', so buying uber cheap points at OKW erodes their ability to sell expensive points elsewhere. ROFR is used to keep a floor on pricing and possibly for Disney to keep a stash of 'cheaper' options to offer to guests that may be turned off by the more pricey options.

 

[awilliams4]

My guess is they are buying up 2042 year contracts to resell them as 2057 contracts and to start dealing with the eventual problem of having two sets of contracts expiring in different years

 

[ParentsOf4]

DVC resale price have come down a lot since 2008. I don't have numbers for all resorts but I extensively researched mine (BWV) and purchased it on the resale market for about 25% less than what it was averaging just 4 years ago. There will be a lot of excitement when the new Grand Floridian DVC opens but I don't think it would be surprising to learn that the weak economy has hurt DVC resale prices. In addition, Disney added some point usage restrictions to DVC resales a little more than a year ago, which hurt resale prices of all DVC memberships. Yet Disney continues to raise prices for direct purchases, meaning the gap between direct sales and resales has never been greater.

For those of you (like the OP) considering a DVC purchase, I suggest you look into the resale market if only because it now costs so much less than a direct purchase. If the ecomony heads south again, values could drop even more. Therefore, if you're unsure now, I suggest you watch prices and consider it again once they reach a price that makes sense for you. Although I bought in for a price I was very happy with, I have a feeling that I might have been able to get a lower price next year. Of course, if I didn't buy now, I wouldn't have 3 DVC vacations planned for the next 18 months!

I realize I might step on the toes of current DVC members who are bothered by me suggesting that resale prices might decline, and I'm sorry about that, but we know DVC values will head towards $0 as expiration dates get closer. Of course, that's at least 3 decades away. I hope we're all still alive to enjoy our DVC memberships at that time!

Since this thread is about helping people to decide whether to buy into DVC, I'm simply trying to supply potential buyers with some thoughts on the subject. I'd be interested to read what others think.

 

[GoofGoof]

DVC resale price have come down a lot since 2008. I don't have numbers for all resorts but I extensively researched mine (BWV) and purchased it on the resale market for about 25% less than what it was averaging just 4 years ago. There will be a lot of excitement when the new Grand Floridian DVC opens but I don't think it would be surprising to learn that the weak economy has hurt DVC resale prices. In addition, Disney added some point usage restrictions to DVC resales a little more than a year ago, which hurt resale prices of all DVC memberships. Yet Disney continues to raise prices for direct purchases, meaning the gap between direct sales and resales has never been greater.

For those of you (like the OP) considering a DVC purchase, I suggest you look into the resale market if only because it now costs so much less than a direct purchase. If the ecomony heads south again, values could drop even more. If you're unsure now, I suggest you watch prices and consider it again once they reach a price that makes sense for you. Although I bought in for a price I was very happy with, I have a feeling that I might have been able to get a lower price next year. Of course, if I didn't buy now, I wouldn't have 3 DVC vacations planned for the next 18 months!

I realize I might step on the toes of current DVC members who are bothered by me suggesting that resale prices might decline, and I'm sorry about that, but we know DVC values will head towards $0 as expiration dates get closer. Of course, that's at least 3 decades away. I hope we're all still alive to enjoy our DVC memberships at that time!

Since this thread is about helping people to decide whether to buy into DVC, I'm simply trying to supply potential buyers with some thoughts on the subject. I'd be interested to read what others think.

My theory is that some of the downward price movements that began in 2008 were a direct result of the "great recession". People who already owned lost jobs and had to sell combined with less people renting points. Disney stopped aggressively buying through ROFR because they didn't want to be stuck with a lot of excess inventory. There were a lot of people who bought in 5 or 10 years ago who can still sell for around their buy in price. Prices were going up for a period of time and I think there were "speculators" who planned to buy-in, rent the points out for more than their fees and sell down the line for a profit. These people got out or at least are trying to get out and that is putting additional pressure.

I agree that you should buy in assuming a constant decline to $0 but that decline may not be a straight line. We may see a period of uptick as resort cash rates rise and the point rental market picks up especially as Disney pushes direct prices north of $200. It is hard to believe that BLT contracts that are currently selling mid to low 90s resale will go down to say $80 in the next 5 years while direct sales of GFV and Poly if they build it are selling for 2.5 times the price.

 

[LuvtheGoof]

DVC is like other purchases in that if you are going to buy, then buy. Similar to getting a new iPhone, laptop, or iPad. Sure you can wait for the latest and greatest, but something new is always on the horizon, and if you buy now, you get to use it!

 

[GoofGoof]

DVC is like other purchases in that if you are going to buy, then buy. Similar to getting a new iPhone, laptop, or iPad. Sure you can wait for the latest and greatest, but something new is always on the horizon, and if you buy now, you get to use it!

If we are going resale purchases I think of it more in terms of a car purchase:

You could walk or hitchhike (don't go to WDW at all).
You could lease a Kia (value resorts)
You could lease a Honda (moderate resorts)
You could lease a BMW (deluxe resorts)
You could buy the BMW instead of leasing (DVC)

When you lease a car you pay less per month than if you buy, but the lease is short term and your payments will continue and go up with each new lease. Buying has more of an upfront cost (either in down payment or larger payments during the finance period) but once you pay the car off you can drive it for as long as it lasts with just paying for maintenance. You can also always sell your car if you get sick of it or the maintenance gets too high but we all know the return will be less than what we paid and goes down the longer we hold it.

I own points through DVC and a 10 year old Honda Accord with 225,000 miles on it so you can see where my preferences are.

 

[DVCOwner]

I own points through DVC and a 10 year old Honda Accord with 225,000 miles on it so you can see where my preferences are.

I like what you said; I own DVC and my F-150 has 207,000 miles on it now.

 

[dreamfinder]

For those of you (like the OP) considering a DVC purchase, I suggest you look into the resale market if only because it now costs so much less than a direct purchase. If the ecomony heads south again, values could drop even more. Therefore, if you're unsure now, I suggest you watch prices and consider it again once they reach a price that makes sense for you. Although I bought in for a price I was very happy with, I have a feeling that I might have been able to get a lower price next year. Of course, if I didn't buy now, I wouldn't have 3 DVC vacations planned for the next 18 months!

Agreed. I was happy with the price we paid, and the value we are getting. We bought at $80. And now a similar contract sells for high $60 low $70s.

 

[toolsnspools]

All of these are good theories about OKW. They've been discussed a lot on another DVC-specific website. Some ideas from that web site:

• OKW is towards the low end of DVC price on the resale market but Vero Beach is much lower. DVC is not ROFR'ing Vero Beach so it doesn't seem to be a case where Disney is worried about a lot of "cheap" points being used at expensive WDW resorts.
• Disney has ROFR'ed some OKW contracts for prices above offers at other resorts that passed ROFR.
• Disney has ROFR'ed some extended OKW contract (i.e. those ending in 2057).
• At least for the past few months, Disney has rarely ROFR'ed anything other than OKW unless the contract price is well below the average. For example, contracts at Vero Beach for $32/point have been ROFR'ed, Vero Beach usually sells in the low $40's.
• One OKW contract will get ROFR'ed while another almost identical contract will pass. (This could be a case of the contracts being very different but we don't know the details.)

There have been lots of good theories (I was one of several who thought they were turning 2042 OKW properties into 2057 OKW properties) but, at least so far, everytime someone comes up with a good theory, Disney does something to turn that theory on its head.


Right now, for people who are considering purchasing a DVC resale, they may want to stay away from OKW or at least offer close to asking price. (Sorry to anyone trying to sell OKW, I don't mean to scare buyers away but think they should be aware of what's going on.)

Have they found a correlation between the units that are being ROFR'd? I was thinking that they may try to buy back a specific set of units and then replace those buildings with something different. If they're making $150+ for new contracts now, they could easily replace both the cost of the ROFR and the construction costs by creating incentive for new sales by building a new section to OKW.

 

[flynnibus]

Have they found a correlation between the units that are being ROFR'd? I was thinking that they may try to buy back a specific set of units and then replace those buildings with something different. If they're making $150+ for new contracts now, they could easily replace both the cost of the ROFR and the construction costs by creating incentive for new sales by building a new section to OKW.

I don't think they could take points out of the pool like that...

 

[GoofGoof]

Have they found a correlation between the units that are being ROFR'd? I was thinking that they may try to buy back a specific set of units and then replace those buildings with something different. If they're making $150+ for new contracts now, they could easily replace both the cost of the ROFR and the construction costs by creating incentive for new sales by building a new section to OKW.

The problem with that is the fees would go up for the other owners at OKW. They pool all of the expenses and then divide the total by the total number of points to come up with the fees. If you take a large number of points out of circulation the others would pay more to cover.

 

[captainkidd]

When you lease a car you pay less per month than if you buy, but the lease is short term and your payments will continue and go up with each new lease.

For what it's worth, that's not necessarily true. Sure, if you decide to lease more expensive cars, but no one says you have to do that.

 

[GoofGoof]

For what it's worth, that's not necessarily true. Sure, if you decide to lease more expensive cars, but no one says you have to do that.

Fair point. You could also start taking the bus or just walk.

I think the first major bullet point on most people's list is you have to compare DVC to deluxe resorts. If you are likely to stay at value or even moderate in the future the economics probably don't work. One of the major uncertainties around DVC is you have to make the assumption you will be going to WDW at least until you hit your breakeven point. If something comes up in the first few years that prevents you from going and you sell you will lose money.

 

[captainkidd]

Fair point. You could also start taking the bus or just walk.

I think the first major bullet point on most people's list is you have to compare DVC to deluxe resorts. If you are likely to stay at value or even moderate in the future the economics probably don't work. One of the major uncertainties around DVC is you have to make the assumption you will be going to WDW at least until you hit your breakeven point. If something comes up in the first few years that prevents you from going and you sell you will lose money.

And you could also stop going to WDW.

For me, the big thing is, simply not knowing how many points we'll need as time goes on. There are too many variables:

-We could buy too many points and not need them as time goes on. We won't need as large a room as we need now, and we may not go for 2 weeks.
-We could buy too few points and not have enough for the next few years.

I will say this though, and take it for what's worth. Everyone I know on a personal level that has owned DVC, has sold it. Now granted, it's only a handful of people, but that speaks volumes to me.