DVC Resale Restriction

kylewr86

Active Member
Original Poster
Disney Vacation Club Resales are rumored to soon be restricted.The new restrictions will impose that resale owners will only be available to book at their home resort.
:hammer:
 

kylewr86

Active Member
Original Poster
Not really sure how factual this is, but should they do I would say that current owners would be grandfathered again.

Got a newsletter from Mouseowners.com, the info is supposed to be from a owner who was told by her guide. I think it looks like anyone before this hits would still be able to book as before.Just looks to restrict future sales.
 

Bork Bork

Active Member
Not really sure how factual this is, but should they do I would say that current owners would be grandfathered again.

I too question the validity of this claim. Rumors have been floating around for many months regarding similar assertions. DVC has made moves toward restricting usage of points purchased on the resale market, but I don't think this type of restriction would be in their best interest, let alone the interest of the owner.

I own at AKV and there is nothing on the member website.
 

Pioneer Hall

Well-Known Member
Got a newsletter from Mouseowners.com, the info is supposed to be from a owner who was told by her guide. I think it looks like anyone before this hits would still be able to book as before.Just looks to restrict future sales.

Like anything else I do with a salesman, I take their words with a grain of salt. Sure there may have been rumblings, and the guide is covering their behind by not saying this is definitely happening. However, their livelihood depends on people buying DVC from Disney and they are going to do what they can to make that happen. I have heard that most guides get particularly aggressive whenever someone mentions resale (and who can blame them).

Not saying it won't happen at some point, but I just find it hard to believe over some other restrictions. If they were to make this change then it would obviously severely restrict the resale market, which would make it harder for people to get rid of their contracts if they meet an unplanned financial burden. These people would then choose to have to default on a loan or stop paying their dues, which would make Disney take the points back. They probably wouldn't want to be sitting on a ton of inventory at certain resorts.
 

Tiggerrules

Member
Hard to believe they would do this given the effort and money they put into rofr, which is done to keep the resale market up at a certain price point. But I guess anything is possible.
 

AEfx

Well-Known Member
Yet another reason to not get in the 50-year rental biz with Disney - constantly changing rules with no recourse.
 

Disneykidder

Well-Known Member
Wow, if this is true, then I would think most people would not buy resale. Who wants to be restricted to only one resort? It would also affect current owners who want to sell on the resale market, making it much harder to sell.
 

Computer Magic

Well-Known Member
constantly changing rules with no recourse.
I stated something similar in another thread and was told I didn't know what I was talking about. Disney introduced a Home resort for a reason and not just a 7 month first choice. Disney contract is written fo protect themselves and adjust rules to earn themselves a profit.
 

Monorail Lime

Well-Known Member
Wow, if this is true, then I would think most people would not buy resale. Who wants to be restricted to only one resort? It would also affect current owners who want to sell on the resale market, making it much harder to sell.

Some guests don't mind staying at the same resort every time. Personally I'd love to snag a few hundred Boardwalk points if this rumored change drives resale prices way down.
 

tjkraz

Active Member
I'll believe it when I see it.

Legally each resort has its own "Condominium Association." Within the bylaws of each Condominium Association is a clause which allows for trading between associations. In other words, the Saratoga Springs Condo Association allows owners of BoardWalk, Beach Club and others to book at SSR, and vice versa.

Frankly I don't see how it would be legal to limit those trading rights to only owners who meet a certain criteria (i.e. direct purchase of points from Disney.) That trading ability goes to the heart of the DVC product.

It would be far more likely--and legal, IMO--for Disney to change the booking windows such that resale buyers are placed at a disadvantage. In other words, they could change it so that direct buy owners can book their Home at 11 months, resale buyers book their Home at 8 months and all non-Home bookings start 7 months from arrival. That meets the Public Offering Statement commitment to give all owners a one month priority at their Home resort.

All of that said, I doubt that DVC is considering any major changes at this time. Sales have been surprisingly good lately despite the all-time high prices. More resale restrictions could easily backfire, making people more reluctant to buy for fear of plummeting resale values.

These days DVC Guide rumors are on par with bus driver rumors. And the Guide rumors are further tainted by the fact that the Guide is using the "rumor" to try and close a sale.
 

Phonedave

Well-Known Member
Like anything else I do with a salesman, I take their words with a grain of salt. Sure there may have been rumblings, and the guide is covering their behind by not saying this is definitely happening. However, their livelihood depends on people buying DVC from Disney and they are going to do what they can to make that happen. I have heard that most guides get particularly aggressive whenever someone mentions resale (and who can blame them).

Not saying it won't happen at some point, but I just find it hard to believe over some other restrictions. If they were to make this change then it would obviously severely restrict the resale market, which would make it harder for people to get rid of their contracts if they meet an unplanned financial burden. These people would then choose to have to default on a loan or stop paying their dues, which would make Disney take the points back. They probably wouldn't want to be sitting on a ton of inventory at certain resorts.

Maybe, maybe not. Remember, this is a partial real estate share. There are expenses that are the burden of the owner - taxes, upkeep, etc.

If the market is soft enough, DVC may not WANT them back, and there is nothing requiring that they take them back.

Friends of mine have 2 weeks in the Grand Caymans that they would love to get rid of (well one of the weeks). However the company they own with will not even take them back for free. They are paid for, no financing, but the company does not want to pay for the upkeep and expense. The market is too soft to sell them. In fact it is so bad, that you can find those weeks for sale on eBay for $1. That's not a $1 to stay for a week, that's a $1 to own the timeshare.

It may not come to this with DVC, because they do have a healthy rental market - but taking the points back is not automatic.


-dave
 

slappy magoo

Well-Known Member
I'll believe it when I see it.

Legally each resort has its own "Condominium Association." Within the bylaws of each Condominium Association is a clause which allows for trading between associations. In other words, the Saratoga Springs Condo Association allows owners of BoardWalk, Beach Club and others to book at SSR, and vice versa.

Frankly I don't see how it would be legal to limit those trading rights to only owners who meet a certain criteria (i.e. direct purchase of points from Disney.) That trading ability goes to the heart of the DVC product.

It would be far more likely--and legal, IMO--for Disney to change the booking windows such that resale buyers are placed at a disadvantage. In other words, they could change it so that direct buy owners can book their Home at 11 months, resale buyers book their Home at 8 months and all non-Home bookings start 7 months from arrival. That meets the Public Offering Statement commitment to give all owners a one month priority at their Home resort.

All of that said, I doubt that DVC is considering any major changes at this time. Sales have been surprisingly good lately despite the all-time high prices. More resale restrictions could easily backfire, making people more reluctant to buy for fear of plummeting resale values.

These days DVC Guide rumors are on par with bus driver rumors. And the Guide rumors are further tainted by the fact that the Guide is using the "rumor" to try and close a sale.

I don't know if that would make people reluctant to buy - like Monorail Lime wrote, if this new restriction caused prices to drop, I'd be tempted, at the very least, to buy 75-100 points at a different resort, then bank-and-borrow so every three years I could stay at a resort other than SSR without the risk of the 7-month window already being too late. But it's like weights on a scale - IF the prices dropped because of this new restriction, thus making more people to consider buying resale because they don't mind being restricted to that one resort, would that make the prices high again?
 

tjkraz

Active Member
If the market is soft enough, DVC may not WANT them back, and there is nothing requiring that they take them back.

There are no certainties, that's for sure. However, Disney is more protective of their name and reputation than most in the timeshare market. If they plan to continue building and selling new resorts, they must consider what impact it would have on sales if they leave some customers swinging in the proverbial breeze.

If members stop paying annual dues, Disney's choices come down to either suing the owner to compel payment or foreclosing on the points. Since Disney can turn foreclosed points into either new sales or cash reservations, they do have value to Disney.

It isn't unfathomable that some dramatic downturn in the economy or tourism could prompt a different approach. But I hope we don't reach the day when Disney feels it has no other recourse other than taking owners to court to compel payment of timeshare dues.

I don't know if that would make people reluctant to buy - like Monorail Lime wrote, if this new restriction caused prices to drop, I'd be tempted, at the very least, to buy 75-100 points at a different resort, then bank-and-borrow so every three years I could stay at a resort other than SSR without the risk of the 7-month window already being too late.

I was referring more toward direct sales. Certainly not all buyers are informed buyers and some would fall for the sale spiel. But some portion of the market could be labeled "informed" and those people would be right to worry about the resale value of a DVC purchase with such limitations in place.

There was a time when you could purchase points direct from DVC with the knowledge that they could be quickly resold for 75-85% of that purchase price if necessary.

If the immediate resale value drops under 50% of direct prices, it's a much bigger risk on the part of the buyer.

But it's like weights on a scale - IF the prices dropped because of this new restriction, thus making more people to consider buying resale because they don't mind being restricted to that one resort, would that make the prices high again?

True but this is all about redistributing the market. Changing resale policies is unlikely to expand the market. The number of buyers remains relatively fixed.

If such a policy change is successful and more people end up buying direct, that leaves fewer customers for resale. With fewer customers, prices could only fall.
 

WDWLOVER1957

Active Member
I don't know if that would make people reluctant to buy - like Monorail Lime wrote, if this new restriction caused prices to drop, I'd be tempted, at the very least, to buy 75-100 points at a different resort, then bank-and-borrow so every three years I could stay at a resort other than SSR

We would do this as well.
 

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