Today’s show is full of expert points and tips, as we explain the top things that every DVC Member needs to know about resale. You may want to listen to the show a few times as it is stacked with loads of great information. And then, we highly suggest that you call a DVC Resale market guide to ask questions, as they are all experts at this. Jodi Gross from DVC Resale Market co-hosts today's show. Episode 164
Season 9 of the My DVC Points Podcast was brought to you by:
DVC Resale Market – Industry Leader in DVC Resales
DVC Rental Store – DVC Point Rentals
Monera Financial – Exclusively Financing DVC Contracts
Patreon supporters in the My DVC Points VIP Producer Club.
Why Does Every DVC Member Need to Understand Resale?
1.SAVINGS
Most DVC Resale buyers can attest to the significant savings by buying their contracts on the resale market. You may want to save money by buying a resale contract. DVC Members can save significantly on the per point price of older properties, but occasionally even on new properties currently still being sold by Disney direct.
The reason you buy into DVC is to save money on Deluxe Accommodations. The reason you buy Resale is to Save Even More Money!!!
2. You might need to sell your contract
We know that DVC Members rarely go into the purchase of a DVC contract swaying to themselves “…I’ll vacation for a few years and then sell this contract…”; but when life happens, sometimes we may be in a situation where we need to divest of our DVC interests. Our research shows that 50% of timeshare buyers are sellers within 7-8 years. Knowing that the DVC Resale Market exists is excellent for peace of mind if the unthinkable happens and you need to sell one of your contracts.
DVC is awesome – why are people selling? This can be attributed in most cases to the following three circumstances:
- The Three D’s
- Death
- Divorce
- Disability
- Life Priorities Change
- You Don’t Want to Go to Disney Every Year
- Your Kids Outgrow It
- You're a Disney fan, but your kids aren’t, and they don’t want your contract.
- Financial Reasons:
- You financed the contract and just want to get out of Debt.
- Your contract has appreciated,with certain member perks and you want to cash out for other obligations like College Tuition or Retirement Planning
3. Your contract is an asset that can be used to secure a loan
We don’t usually think of our Disney Vacations as an asset, so you might be surprised to know that most DVC Contracts INCREASE in value over time! You can refinance a DVC contract with cash-out options.
4. You owe it to your family to make an informed and educated decision about buying DVC
Maybe the resort of your dreams is Old Key West and not Disney’s Riviera Resort… Knowing that more affordable DVC ownership opportunities may benefit your family by offering your family more points for the same budget you would have purchased direct. There are lots of great reasons to buy direct from Disney. Our ask is that you understand resale and make an informed and educated decision about what's best for your family.
Key differences between buying a DVC Contract Resale or Direct:
When buying Direct for Disney, you are buying a brand new contract from Disney. They come with all the points for the year you buy it and everything going forward. Resale contracts usually have less time left on the contracts as they are traditional contracts for older resorts.
Depending on how many points you buy (currently 150), you can qualify for a “blue card,” which has certain member perks attached to it. Purchasing resale will give you a white card, which doesn't have member perks available.
Understanding Our Monthly Market Recap Reports
What Impacts Resale Price?
Disney’s Direct Price is the first measure that dictates price per point on the resale market. Sellers see Disney raise prices, and they raise prices on resale usually within two months. And, sellers know they have to undercut Disney prices to make their resale contract attractive to a buyer.
How much a seller owes on their contract can also influence the price of a given contract… Quite often, new owners put down 20% of the contract price. They haven’t owned it long enough to pay down their loans; however, they want out. So resale prices tend to hover just above 20% off direct prices for new resorts.
Resort Desirability is also a significant factor, in that some resorts are top-rated to own so that you can book at 11 months out. Grand Californian, Grand Floridian, and Beach Club tend to be tops on the list. And Hilton Head is incredibly popular to book in the summer months using the 11-month booking window.
Then there’s the obvious ebb and flow of Supply and Demand. DVC usually has more buyers than they do sellers. So, it’s usually a seller’s market. However, there are times when it becomes a buyers' market, like shortly after the dues statements come out, motivating owners to sell so that they don't have to pay annual dues.
Knowing about the option of Resale is important, as statistically speaking, you’re likely to want to sell your DVC contract before it expires. This is one of the main reasons that we talk about inventory every month. If inventory rises, more sellers came to the market than buyers did. If inventory shrinks, more buyers bought than sellers provided listings.
Point Size is another major factor in the pricing of contracts as smaller contracts are more desirable. Many people want to add on a little bit more, or they can only afford to add on a little bit more at a time. There are a lot more potential buyers for a smaller contract than a giant contract. More demand = higher price per point. Now, if you have a 500 point VGF contract, you may want $200 a point for it, but that’s a $100,000 contract. There’s not a lot of buyers out there in the market with that much money. So you may have to end up discounting it to $160 a point. If it was a 25 pointer, you could get $240.
Here’s a quick overview of what “size” contracts are usually on the market:
- 25-100 – Smaller
- 101-200 – Average
- 200-300 – Large
- 300+ – XL
Point Availability also factors into the sale price of a contract because you are taking over a contract from an existing member. The owner steps and gets whatever points the seller didn’t use right when they left them. Understanding banking, borrowing, and point allocation is helpful when making offers. Every year you get an allocation of points. Suppose it’s a 100 point contract. You get 100 points allocated to 2021. 100 points allocated to 2022. You can bank the 2021 allocated points to 2022. They become banked points in the 2022 Use year.
Common terms to describe the points left on a contract are:
- Stripped – the Seller has used the points from last year, this year and next year.
- Partially stripped – the Seller has used the points from Last Year and This year but everything is there for next year going forward.
- Partially loaded – the Seller banked some of last years points to this year, all current points this year, and all points going forward.
- Fully Loaded or Double Points – sometimes the seller is selling because they haven’t used their contract. The seller completed two banking transactions. They banked last year into this year. They banked this year into next year. So once you close, you can book four years worth of points.
EXPERT TIP – fully loaded contracts can afford you a good opportunity to buy the contract and rent out the extra points to apply towards the cost of a contract, as Points are worth about $8-10 on the resale market, and they’re worth $25-35 in DVC rack rate prices.
- Closing Date is the last consideration of a resale contract as you cannot sell a contract with a pending reservation. Sometimes buyers put their contracts up for sale before they finish their vacations. When this happens you will see a “…can close after September 7th day…” That means the owner is checking out of their final vacation or point rental on September 6th.
We hope this episode has helped clarify some great reasons for buying a resale and some of the terms related to the resale process. As mentioned, we strongly suggest that you consult the folks over at the DVC Resale Market to answer any questions you might have about the DVC Resale process – they’re the experts and there to help!
Show notes by Sandy Symaniac. Audio editing and mastering by Chad Pennycuff
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