Another Resale questions for the experts

[deltadisney]

I am strongly considering purchasing a smaller dvc resale and the more I get into researching, the more quesitons that come to mind.

With 2 children and a teacher in the family, our disney time is limited to summer, spring break, thanksgiving, and christmas break. I understand the 11 month home resort booking and 7 month non-home booking; however, if we waited and decided 3 months out that we wanted to book a last minute vacation, what are the chances that we would have a few options to pick from? I can imagine the more popular resorts would be booked, but would we at least have a few options to pick from or do you typically have to plan out your vacation by the 7 month mark?

As to cancellations, is it correct that if you cancel before 3 months of your reservation, that you do not loose your points and you could reallocate for another trip, bank or rent/transfer? Also, if you were inside of the window of where cancelling would cost you your points, can you change the name of the parties and sale/rent the reservation to a third party (such as on the DIS boards) to at least get some money back?

Finally, for a smaller 50 point contract - do you anticipate these typically holding there resale value over the next 10 - 15 years? Please correct me if I am missing something, but if the smaller contracts hold the value, for a family of 4 who would go maybe every 2-3 years for the next 10 years or so and a 50 point dvc membership would accommodate their needs during this time, this could be a significant savings, even if the membership is resold after 10 - 15 years.

I sincerely thank you all for your help, advice, and expertise.

[chalee94]

With 2 children and a teacher in the family, our disney time is limited to summer, spring break, thanksgiving, and christmas break. I understand the 11 month home resort booking and 7 month non-home booking; however, if we waited and decided 3 months out that we wanted to book a last minute vacation, what are the chances that we would have a few options to pick from?

DVC works better if you plan ahead. i would think in the summer, you would probably find one of the larger DVC resorts, probably SSR, that still had availability. i'm less confident about thanksgiving and christmas break, but you never know.

if you are looking at cheaper rooms like AKV-value or BLT-standard or BWV-standard, those will often be gone by 7 months out or thereabouts...so pricing the SSR villas is more realistic...

As to cancellations, is it correct that if you cancel before 3 months of your reservation, that you do not loose your points and you could reallocate for another trip, bank or rent/transfer?

if you cancel on the check-in date, you lose all the pts for the reservation.

if you cancel 1 day to 30 days out, the pts go into "holding". the holding pts cannot be banked and will expire at the end of the UY. they can only be used to bank whatever is available 60 days or less out, so availability can be a challenge.

if you cancel 31 or more days out AND you are still inside your banking window (based on UY), you can bank any current pts used in the reservation. it is a GREAT idea to travel early in your UY as often as possible.

if you used any banked/borrowed pts - like for an every-third-year reservation - then those cannot be moved again with banking and will expire at the end of that UY.

Also, if you were inside of the window of where cancelling would cost you your points, can you change the name of the parties and sale/rent the reservation to a third party (such as on the DIS boards) to at least get some money back?

you'd have to check the DIS rent/trade board rules, but it is possible in general to change the names and rent that reservation or give it to family if you cannot use it. renting on short notice has its own challenges.

Finally, for a smaller 50 point contract - do you anticipate these typically holding there resale value over the next 10 - 15 years?

no. there might be some resale value left at the end of 10-15 years (there have been several recent discussions if you scan through recent threads), but you might get very little or nothing back. the future can be tough to read...

if all you need is a studio for a week every other year (i would not plan for every 3 years - too risky), 50 pts can be a decent place to start, but it can be very limiting.

[ELMC]

Originally Posted by deltadisney

I am strongly considering purchasing a smaller dvc resale and the more I get into researching, the more quesitons that come to mind.

With 2 children and a teacher in the family, our disney time is limited to summer, spring break, thanksgiving, and christmas break. I understand the 11 month home resort booking and 7 month non-home booking; however, if we waited and decided 3 months out that we wanted to book a last minute vacation, what are the chances that we would have a few options to pick from? I can imagine the more popular resorts would be booked, but would we at least have a few options to pick from or do you typically have to plan out your vacation by the 7 month mark?

With more and more members joining DVC every day, the importance of planning as far in advance as possible grows. Ideally you would want to be able to plan at the 11 month mark where in many cases you will have the pick of what you want. However, there are times where people get shut out even at that point. I was two hours into my 11 month window for an October Food and Wine reservation at BWV and there was no availability for Boardwalk View or Standard View rooms. However, there was plenty of availability for Garden/Pool view, so I simply booked that. Then there will be another crush on availability at the 7 month mark. From that point on availability decreases as you approach the arrival date. As an added "bonus", DVC turns over unused rooms to the central reservations office (CRO) at 60 days out, opening booking possibilities to a whole other group of people. That being said, I have frequently been able to find availability (even during some of the more busier times) as short as 2 days before the day I wanted to travel. However, this is in no way guaranteed and I wouldn't count on it. So that's the general spiel on availability. To answer your question specifically...

Originally Posted by deltadisney

our disney time is limited to summer, spring break, thanksgiving, and christmas break.

Others will weigh in on this as well, but I would suggest that you would have a difficult time booking a last minute trip during July 4 week, Thanksgiving and Christmas break. Not sure when your spring break is, but right now there is availability for many different types of rooms at a few different resorts for mid March, which is only 2 months away. So I think you would have a decent chance at getting something last minute during spring and summer, and possibly even at the other times. It can be done. But just know that the best use of DVC is to book at the 11 and 7 month windows.

Originally Posted by deltadisney

As to cancellations, is it correct that if you cancel before 3 months of your reservation, that you do not loose your points and you could reallocate for another trip, bank or rent/transfer? Also, if you were inside of the window of where cancelling would cost you your points, can you change the name of the parties and sale/rent the reservation to a third party (such as on the DIS boards) to at least get some money back?

There are two things at work when it comes to cancellations. The first is the cancellation window and the second is use year. I'm going to give you a very basic answer, but I strongly recommend you do a search for threads on use year here on the DIS and read them. But basically, if you cancel outside of 30 days from your trip, your points are returned to your use year and you can use or bank them just as you would points you never made a reservation with. If you cancel within 30 days of your arrival date, your points go into holding. That means that they cannot be banked and can only be used for a reservation within the next 60 days. Holding points expire at the end of your use year.

If you cancel your reservation and you are within the last 4 months of your use year, you have lost your opportunity to bank those points (although you might be able to get a one time exemption) and you must use them by the end of your use year. An example of this would be if your use year is Jun and you cancel your May 1 trip on March 16. You are within the last 4 months of your use year but outside of the 30 days. It's complicated...read the use year threads and you'll get it.

To your last point, you can rent out your reservation to someone else in order to recoup some (or all) of your money. You can also cancel the reservation and "rent" the points by making a new reservation for someone else, provided it falls within the parameters outlined above. It's a little bit of work but it can definitely be done. (Renting the reservation is significantly more difficult than cancelling and booking a new reservation for a renter. As such short notice, the odds of finding someone who wants your exact dates are not great.)

Originally Posted by deltadisney

Finally, for a smaller 50 point contract - do you anticipate these typically holding there resale value over the next 10 - 15 years?

Honestly, nobody can predict what will happen to the resale value of DVC contracts over the next 5 years, never mind the next 15. DVC is unlike just about any other timeshare out there in the fact that their contracts have a significant resale value at all. Many timeshare system contracts can be bought on eBay for $1 from people just looking to stop paying the fees. That being said, resale values have dropped pretty significantly in the past couple of years, before ticking back upwards a bit recently.

Originally Posted by deltadisney

Please correct me if I am missing something, but if the smaller contracts hold the value, for a family of 4 who would go maybe every 2-3 years for the next 10 years or so and a 50 point dvc membership would accommodate their needs during this time, this could be a significant savings, even if the membership is resold after 10 - 15 years.

There's more to it than that. Even if the contracts have no value, if you got in for a low enough price and you make good use out of DVC, then you will have gotten a respectable value out of your purchase. I would advise against trying to make the "one trip every three years" thing work, because it is a bit complicated. Once every other year is completely doable though. There are many ways to analyze the short and long term value of contracts. The easiest way is to look at what your lodging would cost you if you didn't have DVC and then what it would cost you by using DVC, accounting for purchase price amortized over however many years you plan on using it and adding in maintenance fees. (Spoiler alert: DVC will most likely work out to be a losing proposition if you typically stay in values, a wash if you typically stay in moderates and a potential savings if you typically stay in deluxes.)

The fact of the matter is that people own DVC because their is a perceived value to it. Saving money is hard to quantify because savings are relative to another purchase. But it is safe to say that you will most likely receive a better value for your dollars if you purchase DVC than if you book direct.

Originally Posted by deltadisney

I sincerely thank you all for your help, advice, and expertise.

Hope it helped. Keep reading the different threads on here and keep asking questions. Good luck with your decision.

[Dean]

Originally Posted by deltadisney

I am strongly considering purchasing a smaller dvc resale and the more I get into researching, the more quesitons that come to mind.

With 2 children and a teacher in the family, our disney time is limited to summer, spring break, thanksgiving, and christmas break. I understand the 11 month home resort booking and 7 month non-home booking; however, if we waited and decided 3 months out that we wanted to book a last minute vacation, what are the chances that we would have a few options to pick from? I can imagine the more popular resorts would be booked, but would we at least have a few options to pick from or do you typically have to plan out your vacation by the 7 month mark?

As to cancellations, is it correct that if you cancel before 3 months of your reservation, that you do not loose your points and you could reallocate for another trip, bank or rent/transfer? Also, if you were inside of the window of where cancelling would cost you your points, can you change the name of the parties and sale/rent the reservation to a third party (such as on the DIS boards) to at least get some money back?

Finally, for a smaller 50 point contract - do you anticipate these typically holding there resale value over the next 10 - 15 years? Please correct me if I am missing something, but if the smaller contracts hold the value, for a family of 4 who would go maybe every 2-3 years for the next 10 years or so and a 50 point dvc membership would accommodate their needs during this time, this could be a significant savings, even if the membership is resold after 10 - 15 years.

I sincerely thank you all for your help, advice, and expertise.

To add my thoughts. Buying with the plan to book short notice routinely is not a good plan and one should not buy with this plan. Too much risk, esp since you'll likely have banked and/or borrowed points which you cannot bank. Reallocation is possible at times but only for the same UY depends on what/what resort is reserved. IF you plan your UY well, it will give you some protection and banking options if you have to cancel late. I would never suggest buying with the idea of reselling unless you buy cheaply enough up front to resell and make a profit at that time. If your kids are of different gender's, a studio will likely not work for you long term but you could always add more points later. I'd only buy if you can do so OOP without financing.

[deltadisney]

Thank you for the responses and the insight - that is why this board is such an awesome place. I am nw considering issues before-hand that I would not have realized until after the fact.

As a point of clarity, I do not mean to suggest that all vacations would be spur of the moment, but I could imagine some scenerios where there may be a sudden decisions to try and get away.

As to the resale, I know this is predicting the future, but certainly Disney and ROFR will remain somewhat constant and maintain a decent resale value (I understand that there are several external and economical factors and time decreases the value, but surely disney will not let the resale market get to "pennies on the dollar."

Also, on one post I came across a reference that disney "may" make some changes with regard to resale and no longer allow DVC resale owners to use points outside of their home resort. Again, I know it is predicting the future, but does there appear to be any validity to this rumor? I understand how this would benefit direct DVC owners, but wouldn't this also put direct DVC owners in a more vulnerable state by substantially reducing the resale value of their DVC membership due to this restriction?

[chalee94]

As to the resale, I know this is predicting the future, but certainly Disney and ROFR will remain somewhat constant and maintain a decent resale value (I understand that there are several external and economical factors and time decreases the value, but surely disney will not let the resale market get to "pennies on the dollar."

Also, on one post I came across a reference that disney "may" make some changes with regard to resale and no longer allow DVC resale owners to use points outside of their home resort. Again, I know it is predicting the future, but does there appear to be any validity to this rumor? I understand how this would benefit direct DVC owners, but wouldn't this also put direct DVC owners in a more vulnerable state by substantially reducing the resale value of their DVC membership due to this restriction?

you seem to be under the illusion that DVC is concerned about maintaining the resale values for DVC owners. this is simply not the case.

ROFR is a mechanism for complicating the resale process and annoying potential resale buyers to push them into buying direct. if an owner is desperate and is willing to sell at fire-sale prices, it allows disney to scoop up the bargain for resale later at a higher price.

a few years ago, real estate values plummeted and we hit the recession. a number of DVC owners lost their jobs and resales flooded the market. there was a lot of uncertainty...and guess what? disney didn't want to get stuck with contracts that they might have trouble reselling and ROFR almost completely went away.

supply and demand determine the real value of DVC. i wouldn't count on ROFR as a major price support...

[ELMC]

Originally Posted by chalee94

you seem to be under the illusion that DVC is concerned about maintaining the resale values for DVC owners. this is simply not the case.

ROFR is a mechanism for complicating the resale process and annoying potential resale buyers to push them into buying direct. if an owner is desperate and is willing to sell at fire-sale prices, it allows disney to scoop up the bargain for resale later at a higher price.

a few years ago, real estate values plummeted and we hit the recession. a number of DVC owners lost their jobs and resales flooded the market. there was a lot of uncertainty...and guess what? disney didn't want to get stuck with contracts that they might have trouble reselling and ROFR almost completely went away.

supply and demand determine the real value of DVC. i wouldn't count on ROFR as a major price support...

Although I agree with your point about ROFR not acting as a major price support, I would modify this statement by saying that ROFR does not directly act as a major price support. It does, however, act indirectly as a price support as we have seen here on the DIS many times. People are offering a few dollars more per point in hopes that this will help them pass ROFR. So while ROFR might not have anything to do with actively influencing prices, its mere existence does have an influence on prices for some buyers.

[chalee94]

Originally Posted by ELMC

People are offering a few dollars more per point in hopes that this will help them pass ROFR. So while ROFR might not have anything to do with actively influencing prices, its mere existence does have an influence on prices for some buyers.

That is true – but I think that’s a fairly minor influence on prices over the long run.

I agree that there is the type of buyer who has an interest in DVC within a range of prices. If I want to buy an OKW contract at $62 per pt and I know Disney is ROFRing contracts priced under $65 per pt, I might increase my offer a small amount to pass ROFR.

But if I feel like $62 per pt is a good price for OKW and Disney is ROFRing at $75, I might simply decide that is too expensive and drop out as a buyer and stick to renting DVC or staying elsewhere. (Or if I had to have it, I might decide that was close enough to a direct price to skip resales and purchase directly.)

Then there are buyers like Dean who wouldn’t care what was passing ROFR. They would offer what they considered to be great deal or pass…so that sort of buyer might only offer $40 per pt for my $65 per pt OKW contract.

If the OKW seller was in a hurry to sell within a month and that last type of buyer was the only one currently making an offer (even if only $40 per pt), that would be the selling price. ROFR would not mean that Disney would bid the price up – the seller only gets $40 per pt whether the original buyer or Disney gets the bargain. (And it was reported a few years ago that an OKW contract went through without being ROFRed at $20-25 per pt, so it’s not an unrealistic example.)

Just saying don’t put a lot of faith in ROFR or Disney to support resale prices. (Disney could, in fact, decide to make changes similar to other timeshare companies that harmed resale prices.) The most important factor in resale prices IMO is the number of buyers in the market – the supply of DVC pts is only going to go up…

[Dean]

Originally Posted by deltadisney

Also, on one post I came across a reference that disney "may" make some changes with regard to resale and no longer allow DVC resale owners to use points outside of their home resort. Again, I know it is predicting the future, but does there appear to be any validity to this rumor? I understand how this would benefit direct DVC owners, but wouldn't this also put direct DVC owners in a more vulnerable state by substantially reducing the resale value of their DVC membership due to this restriction?

It is my opinion that this is not a risk. As I read it, the only way that could happen would be for a given resort to be removed from the club which would affect all owners there. I do not believe it legally possible for them to make retail a condition related to this issue. I think realistically one can expect to have some timeshare exchange options, likely through RCI and the SAME reservation window for club resorts as everyone else. The other thing they could do would be to make new resorts and portions of existing resorts owned by DVD as a new timeshare system.

I think it's reasonable to assume that resale prices will remain proportional to each other but unrealistic to assume they'll hold steady related to any retail price or from now going forward. Basically buy assuming the money is gone forever and then anything positive from there is a plus.