Purchase DVC thru Disney or Timeshare store?

[TinkerbellsMom]

Hi everyone,

I would appreciate opinions on pros/cons of purchasing DVC thru Disney or Timeshare store. It appears at first glance, that I could get more points for my money thru DVC resale. We have been going back and forth regarding becoming DVC members.

Thanks for sharing - this board rocks!

[DizneyRox]

One difference (besides final cost) is that when financing through Disney, your interest is tax deductible vs resale it is not.

When deciding make sure you include all costs closing costs, etc, as well as incentives offered by Disney. I've found that resale is usually a better way to go. If your looking at price only. You are treated EXACTLY the same by Disney once you are a member.

[DVC Mike]

Initial Purchase from DVC

You can get the exact number of points that you want (although you may have to buy a minimum amount of points)
Faster than resale (you will be in the system and have your points and be able to make reservations much faster than resale)
No worries about the purchase if Disney executes ROFR, since that only applies to resale purchases
More expensive cost per point than the resale market, although be sure to take into consideration any incentives that DVC is offering
You can easily finance through DVC, and Disney doesn’t report the loan to credit reporting agencies; also, the interest on the loan will be tax-deductable (in most cases) since it’s a mortgage
You can pay with a Rewards credit card and get points/cash back
The full set of points you buy will be available immediately, versus a resale contract which may be “stripped” of points.
If you don’t want the resorts they are actively selling, you may have to do some firm talking to a guide to convince them you really want an older resort.
Initial Purchase via Resale

You may not get the exact number of points you want
You can purchase less than 160 points for your initial buy-in to DVC (Disney typically hasn’t let you buy less than 160 points).
It will take much longer to get into the DVC system and have your points (resales typically take 6-8 weeks)
Disney may exercise ROFR and you may loose the resale and have to start all over (When buying resale, one of the potential pitfalls to try to avoid is making an offer that will cause Disney to exercise it’s Right of First Refusal)
Resale is typically less expensive then buying from DVC
You can’t finance through DVC, although most resale brokers will recommend a finance company; also, the interest on the loan will not be tax deductible
A resale contract may be “stripped” of points where the user has used many of the current year’s points, and may have borrowed some or all of next year’s points. Just be aware of “stripped” contracts on the resale market.
Easier to pickup large point packages at any of the older DVC resorts.

[Hammer]

I can speak as someone who looked at buying through Disney and resale and chose to buy resale.


Yes, you will be in the system faster if you purchase through DVC, but it is not the length that Mike quoted above, at least not in my experience. Had I purchased through DVC remotely (not while visiting) you still have to wait until all papers are signed and approved before you can book. Between all the back and forth, it could take a few weeks with Disney. Once my papers were signed and received by the Timeshare Store, I only had to wait 10 days- 2 weeks until I was in the DVC system, which made my whole process take 5 weeks.
Resale is decidedly less expensive than buying through DVC, even with incentives, with one exception. BLT will be less with incentives than buying it on the resale market. Disney does not usually offer incentives if you are looking to buy at an older resort.
While Disney offers financing, their rates are quite high. You should look at maybe getting a home equity line of credit and use that money to purchase. You will have a better interest rate and the interest is still tax deductible.


When buying resale- make sure you understand what points are available to you this use year and subsequent use years. The people at the Timeshare Store are very helpful with sorting that out.

I know many say "buy where you want to stay" but that really only works if you can book greater than 7 months out or only want to book studio accommodations. I always book at 7 months out (sometimes even less) and I have gotten reservations at every single DVC resort on WDW property (though I had to cancel BLT due to a family emergency).

[DonLefNY]

One difference (besides final cost) is that when financing through Disney, your interest is tax deductible vs resale it is not.
...........

Not always. We used a Home Equity Line of Credit for one of our resales purchases and the interest was fully deductable.

[Hammer]

Not always. We used a Home Equity Line of Credit for one of our resales purchases and the interest was fully deductible.

Yes, and the interest rate will be much lower than what Disney is charging (which I believe it is somewhere around 10%).

I thought of something else. While Disney can exercise ROFR, it seems they have rarely done it the last 3-4 years.

[Gibbs]

DW and I will become members of DVC within the next year. This has been a long term goal for us, so we are very excited that this will soon be realized. We have decided that the Timeshare Store is our best bet. This should provide us wth the most points at the least cost. We are looking at buying into WL as our home resort, but OKW is a little less expensive. This now leaves me with a couple of questions.

We know we want to spend the Holidays at WL and/or BLT. Since the time to make reservations is shorter, has anyone had any getting reservations at those specific resorts during holiday time?

Also, I know the length of contract expires after 50 years. Is there a way to extend the contract when buying a resale? If so, do you buy at the going rate per point or the original selling price when the contract was first signed?

[DVC Mike]

which made my whole process take 5 weeks.


Exactly, the average resale timeline is 6-8 weeks, although some have gone through faster if Disney expedites the ROFR process.

Buying direct from Disney is much faster. After you sign, you can make a reservation.

[DVC Mike]

We used a Home Equity Line of Credit for one of our resales purchases and the interest was fully deductable.

In the present housing market, I wonder how many people have equity in their home and can get an HELOC?

You can also use a HELOC when buying direct from Disney.

[DVC Mike]

While Disney can exercise ROFR, it seems they have rarely done it the last 3-4 years.

Disney has a vested interest in keeping the resales cost high enough so that channel doesn't disrupt their sales. Looking at ROFR activity, while it may have gone down a bit the past year, I would not think it accurate to say Disney has "rarely done it the last 3-4 years". That just isn't accurate.

[DVC Mike]

Also, I know the length of contract expires after 50 years. Is there a way to extend the contract when buying a resale? If so, do you buy at the going rate per point or the original selling price when the contract was first signed?

When you buy a resales contract, you are paying to assume or take-over an existing contract between Disney and the current owner. The terms of the contract are not changing at all - including the start and end dates. Thus, all Beach Club Villas contracts will end in 2042 while all BLT contracts will end in 2060.

You negotiate whatever price both the buyer and seller can agree on. If you're a good negotiater and can get the seller to agree to a very low cost, Disney may sweep in and exercise ROFR and buy the contract from the seller. That's one of the things to consider when making an offer. Your resales company can advise you on this.

[Hammer]

Exactly, the average resale timeline is 6-8 weeks, although some have gone through faster if Disney expedites the ROFR process.

Buying direct from Disney is much faster. After you sign, you can make a reservation.

But if you purchase remotely, it can take a few weeks. My 5 week time frame was purchasing remotely through resale. Yes, DVC could have had me in the system in 3 weeks, but I saved $3,000 on a 150 point contract (even after figuring in my closing costs) and I'll exercise patience to save some money.


Disney has a vested interest in keeping the resales cost high enough so that channel doesn't disrupt their sales. Looking at ROFR activity, while it may have gone down a bit the past year, I would not think it accurate to say Disney has "rarely done it the last 3-4 years". That just isn't accurate.

If you work with a reputable reseller, such as the Timeshare Store, they are only going to suggest that sellers list properties which are priced to pass through the right of first refusal. I check many boards; I have not been seeing people posting that Disney is exercising ROFR in the last few years.


Mike, it is evident you are not in favor of people buying through a reseller and prefer people use DVC. For new properties, such as BLT, DVC is the best option. For purchasing an older resort, you are going to get a much better price going through a reseller. Provided you do not need to finance (or qualify for a home equity line of credit), you save a nice amount of money going through a reseller, even if it may take a few weeks longer. Ultimately, it depends on what is important to each individual.

[DizneyRox]

And let's be frank... ROFR is NOT the end of the world, you're NOT out any money, etc. Buying a resale is just like buying a house. Actually, it's almost better since it seems it's ALWAYS a buyer market.

People can always buy through Disney, granted, it's usually at a higher price. If a seller needs to dump a property, then there's no reason why they wouldn't accept a lower bid. If it passes ROFR, they get the money from the buyer. If Disney does, by some miracle pull a ROFR, Disney buys it from the seller. The seller ALWAYS wins, when they need to dump a property.

The buyer MAY lose the contract on a low bid, but they don't lose any money, etc. Just pick another property that fits. You are just gambling on how badly the seller needs to get rid of the property.

Am I missing something here?

Disney doesn't want to have too much inventory on their hands, they are then responsible for maintenance costs, etc. They would much rather have guests paying the upkeep. I beleve their new one time points purchase "perk" is their attempt to be able to hold onto more inventory without having to pay the upkeep. We'll see how many go for it and if it does help keep resale costs higher by Disney being able to go ROFR more often.

[DVC Mike]

My 5 week time frame was purchasing remotely through resale. Yes, DVC could have had me in the system in 3 weeks, but I saved $3,000 on a 150 point contract (even after figuring in my closing costs) and I'll exercise patience to save some money.


Yes, if you're willing to wait, you can save money by purchasing resale. That's the trade-off, and for many it's worth it.

Many new members who weren't originally aware of the resale market, but now are, still decide to add-on direct from Disney rather than via resale. Why? Speed and convenience. You can pickup the phone and have the points in your account that same day, versus waiting for just the right resale contract (#points, Use Year, Price). To some people, that speed and convenience is worth something. To others, not so much.



If you work with a reputable reseller, such as the Timeshare Store, they are only going to suggest that sellers list properties which are priced to pass through the right of first refusal. I check many boards; I have not been seeing people posting that Disney is exercising ROFR in the last few years.


I know what prices are currently passing ROFR, and which ones are being snagged by Disney. Any reputable resale firm can advise you on making an offer that will, in most cases, pass ROFR. Still, that's not to say that ROFR occurs rarely. I still see people losing contracts due to Disney exercising ROFR.




Mike, it is evident you are not in favor of people buying through a reseller and prefer people use DVC.

Not true. I just don't agree with blanket statements about which approach is best. They both have their pros and cons, and every individual will need to make their own choice based upon their financial situation and what ends up being most important to them.

Some folks will decide that purchasing direct from DVC is the best choice for them, while others will decide to go resale. There is no "right" and "wrong" choice here - that's my point.



Ultimately, it depends on what is important to each individual.

I totally agree with this statement!

[DVC Mike]

Buying a resale is just like buying a house.

Making the decision to buy direct versus buying resale can be compared to:

Selling your house - you can maximize your profit by selling the home yourself, or pay an agent to save you the time of having to market your own home.

Renting your points - you can make the most by renting them yourself, or get less by using a broker who handles all the hassle of locating renters, negotiating the contract, making the reservations, etc.

My point is, you can save a lot of hassle and get in the DVC system much faster by purchasing direct. To some people, that will be worth something. To others, not so much.

Rather than being viewed as "pro-direct", I see my viewpoint as balanced - pointing out the pros and cons of each option and letting each buyer make their own decision.

[DizneyRox]

I'm not arguing your points, I just don't want poeple to look at a price and think that's it. Eerything is negotiable in resale (although I doubt the reseller will give anything up).

With resale, the sticker price doesn't have to be the sales price. And the broker won't tell you that since their "commission" is based on the sales price. Lower != better for them.

[diz_girl]

DW and I will become members of DVC within the next year. This has been a long term goal for us, so we are very excited that this will soon be realized. We have decided that the Timeshare Store is our best bet. This should provide us wth the most points at the least cost. We are looking at buying into WL as our home resort, but OKW is a little less expensive. This now leaves me with a couple of questions.

We know we want to spend the Holidays at WL and/or BLT. Since the time to make reservations is shorter, has anyone had any getting reservations at those specific resorts during holiday time?

If you want to spend the holidays at WL or BLT, then buy at those resorts, as they will be in high demand during those times, especially WL with the lobby decorations.

From what I've heard is that the Timeshare Store will work with you if none of their current listings meet your needs. You can tell them the resort, how many points you want, and preferred use year month, and they will keep an eye out for you for a new listing that meets your needs. But they have a lot of listings, so you should probably be able to find something close to what you want.

[PlutoPlanet]

Great discussion. We bought both from Disney and from the Timeshare store. Happy with both experiences.

[kapeman]

I am a big supporter of buying resale, but is not always the "best" method.

For contracts around 75 points or less, buying direct can be a good option for existing members as there are no closing costs, which drives the price per point way down.

That math doesn't work so well for new purchasers.

Also, since the direct prices of the "sold out" resorts have gone up so dramatically lately, it may not apply. I haven't crunched the numbers in a while.

[TinkerbellsMom]

Thanks to everyone for the feedback. We are still deciding to purchase or not. We are doing a DVC webcast on June 15th. We will see what the deals are.

[Simba 1]

For us, the decision was based on cost.We took a DVC tour in 2007 and were very impressed. Disney was selling SSR at the time for $101/point. To buy the minimum 160 points would have cost us $16,160. We were very interested but there were other priorities and we had to wait. Now that we are ready to buy, SSR is selling for ~ $65-$70 / point at the TimeShare Store. So that same $16,160 will buy us close to 250 points.

We made a call to the TimeShare store a few weeks ago. In addition to the website, they will mail you all the new listings every couple of days and also customize a list for you based on your criteria if you ask. We put in an offer (lower than the advertised price) and it was accepted. It is at Disney now for first right of refusal. We had to send 10% of the sale price to the closing company for escrow and we get that back if Disney exercises their right. We will only be out about 3 weeks of our time if they do. Our closing is set for mid July, assuming Disney passes. So the whole process should take about 2 months. Since we don't plan to travel until next spring, time is not a big consideration for us.

Good luck with your decision!