Resale Restriction Workaround

[ziravan]

I think that it has been the case that DVC was a good buy direct with two caveats:

1. Buy when it’s the new resort for sale (or small point add ons that weren’t worth hassling with resale to find the right contract).
2. Buy only if that’s where you really want to stay.

That may or may not still be the case with Riviera, but DVC has introduced enough unknowns to make it worth waiting to see how it shakes out.

I bought Poly new in 2015. It was originally offered to previous owners for $160/point but I didn’t pull the triggger until it was $165.

 

[Ben E N]

Thank you KAT4DISNEY! Maybe I just got lucky on our direct purchases (and I'm not even sure they were brand new). I seem to remember not being able to use some of them for a year or so.

But if your numbers are somewhat close (and I haven't learned how to get them, yet), doesn't this make the case for just buying new to start with, gaining full benefits (with the knowledge that resale on DVC2 properties might be hurt, if one were to ever sell)?

Built   Purch.    DVC         $/pt     2019Dis    2019Resale
1996    1999      BWV          49        190        115
2007    2008      AKL          86        176        103-110
2009    2011      BLT          96        225        140-145

I was honestly considering this with Riviera, but that resale restriction will kill its resale value, so I have no interest in owning there now.

 

[Dean]

Resales and direct were much closer back at that time. As mentioned you were buying while those resorts were still in direct sales and there tend to be very few resales at that time. That still tends to hold true for new resorts - it will be very comparable in prices between direct and resale. But as an example for the resorts you own BWV resale could be around the $115/pt mark and direct is $190. AKV is around $103-$110 and direct is $176/pt. BLT is around $140-$145/pt resale and direct is now $225/pt

For many years the difference was around 15-20% and there were no restrictions on resale. Even then buying retail for existing resorts likely wasn't the best choice but it certainly was a different situation than it is now.

, doesn't this make the case for just buying new to start with, gaining full benefits (with the knowledge that resale on DVC2 properties might be hurt, if one were to ever sell)?

It might have back in the day, I'm not sure it makes the case going forward. The best time to buy a given property has always been preconstruction retail in my experience. There has almost never been an exception other than the large price drops in 2008/9. There are several components there and I think one should look at them differently. Questions to me see to be:

1. Can I afford it (To me that's buy cash AND no consumer debt)
2. Does DVC in general make sense.
3. Will I use almost exclusively at DVC resorts (DCL, CC, DC will quickly erode all savings, RCI isn't a good purchase plan)
4. Will I use mostly at WDW (if not, should I look at other timeshare options)
5. Do I know enough about the options, systems, restrictions, etc to make an informed purchase?
6. How many points should I buy
7. ? Home resort
8. Retail, resale or a combination.
9. Will I get enough benefit from the perks to justify the added costs.

If one answers no to 1, 2, 3, 4 or 5 they likely shouldn't buy or shouldn't at that time.

I was honestly considering this with Riviera, but that resale restriction will kill its resale value, so I have no interest in owning there now.

Personally I doubt it'll hurt the value there much or at all but we'll see. I could even see it being more in demand not less depending on the specifics. One benefit potentially is there might be less competition for resorts in the new DVC II at some point down the road. While I think it's great to think of the exit options, costs and underlying value; ultimately one should buy to use. There could very well be some benefits to buying coming up that might make it a good choice rather than a poor one, we'll see. But the price is going to be dramatic regardless. I wonder if we'll ever see options for those who have restricted points to bring them into the fold in some way, at a cost of course.

 

[Ben E N]

I wonder if we'll ever see options for those who have restricted points to bring them into the fold in some way, at a cost of course.

I am almost positive they have already planned this for 8 years or so from now. Take things away, make people want to get back to them, and then test to see how much they would pay to get it. Disney would only benefit from it, as those points were already sold, perks such as moonlight magic are already paid for, and the ability to trade around the resorts benefits the system as a whole.

 

[Dean]

I am almost positive they have already planned this for 8 years or so from now. Take things away, make people want to get back to them, and then test to see how much they would pay to get it. Disney would only benefit from it, as those points were already sold, perks such as moonlight magic are already paid for, and the ability to trade around the resorts benefits the system as a whole.

To me it seems logical but it has for some time and they haven't done so as does a VIP system. Options like pay a fee to be qualified, buy new points to get qualified or just allow a trade in and substitute the points. Now I'm not optimistic it'll be reasonable just like at the time it wasn't reasonable to extend OKW.

 

[Ben E N]

To me it seems logical but it has for some time and they haven't done so as does a VIP system. Options like pay a fee to be qualified, buy new points to get qualified or just allow a trade in and substitute the points. Now I'm not optimistic it'll be reasonable just like at the time it wasn't reasonable to extend OKW.

These new restrictions to resale buyers make paying $10,000+ to qualify points seem like a better use of money though. We can all do the math to see if adding on direct is worth it for AP discounts, but it is hard to quantify the value of staying at BCV2 or a new fancy resort in 2043. Odds are pretty good I will add on at BLT sometime in the next 10 years, and will do so resale. Once 2043 hits, being able to use those points at other resorts, plus for other incentives, will be tempting.
These current resale restrictions, plus the bigger ones at Riviera, point to an extra fee upgrade like you predicted.

 

[Dean]

These new restrictions to resale buyers make paying $10,000+ to qualify points seem like a better use of money though. We can all do the math to see if adding on direct is worth it for AP discounts, but it is hard to quantify the value of staying at BCV2 or a new fancy resort in 2043. Odds are pretty good I will add on at BLT sometime in the next 10 years, and will do so resale. Once 2043 hits, being able to use those points at other resorts, plus for other incentives, will be tempting.
These current resale restrictions, plus the bigger ones at Riviera, point to an extra fee upgrade like you predicted.

We'll have to see what happens, I think it's likely we'll see other changes in the next few years. Obviously specifics will dictate reasonableness. Historically the little that we've seen from DVD in this direction (OKW extension) was about double it's real value so we'll see. I've long since felt like extensions tied to retail purchases and a VIP system were good ideas from a business perspective. However, with timeshares in general, companies tend to make the value one sided in their favor for most such situations.

 

[Jerry@dvcstore]

It's hard to predict the future, but it seems the Riviera will be very difficult to resell. It's terrible for anyone who buys Riviera direct and then has to resell due to loss of job, illness, divorce, etc.. Not only do they have to deal with their issue, but they will lose on selling there Riviera.

Resales exist because people need to sell. Disney should not penalize DVC Members who are loyal to the Disney brand, take annual vacations, and spend a tremendous amount of money at the parks & resorts because they need to sell. I feel like Disney has these Restrictions backwards.

 

[Bearval]

It's hard to predict the future, but it seems the Riviera will be very difficult to resell. It's terrible for anyone who buys Riviera direct and then has to resell due to loss of job, illness, divorce, etc.. Not only do they have to deal with their issue, but they will lose on selling there Riviera.

Resales exist because people need to sell. Disney should not penalize DVC Members who are loyal to the Disney brand, take annual vacations, and spend a tremendous amount of money at the parks & resorts because they need to sell. I feel like Disney has these Restrictions backwards.

Making future resorts difficult to resell is exactly what I believe the goal is. Most buyers of timeshares do not go into a purchase thinking what would I get if I had to sell? If they were thinking that then they wouldn’t buy in the first place. They only thing that is going to prop up the resale value is the price point DIsney is willing to pay to use their ROFR to buy back and repackage the points to resell with all of the Perks intact. Eventually Disney will stop building new resorts and just keep doing major refurbishments on existing properties when the contracts expire and will have a big business using ROFR to resell points.

 

[Bearval]

Making future resorts difficult to resell is exactly what I believe the goal is. Most buyers of timeshares do not go into a purchase thinking what would I get if I had to sell? If they were thinking that then they wouldn’t buy in the first place. They only thing that is going to prop up the resale value is the price point DIsney is willing to pay to use their ROFR to buy back and repackage the points to resell with all of the Perks intact. Eventually Disney will stop building new resorts and just keep doing major refurbishments on existing properties when the contracts expire and will have a big business using ROFR to resell points.

I also wouldn’t be surprised if future contracts were written as RTU and there by keeping the owners from renting out points.

 

[Matty B13]

I also wouldn’t be surprised if future contracts were written as RTU and there by keeping the owners from renting out points.

Then DVC wouldn't be able to rent out rooms either.

And this would truly tank the resale and probably the direct price of DVC contracts.

 

[Ben E N]

I also wouldn’t be surprised if future contracts were written as RTU and there by keeping the owners from renting out points.

That would keep more first-time visitors, and all the money they spend, out of their parks.

 

[Bearval]

Then DVC wouldn't be able to rent out rooms either.

And this would truly tank the resale and probably the direct price of DVC contracts.

They could still rent , it all depends on how they write the language in the contracts. It also won’t have an impact on direct sale pricing of contracts. Most if not all timeshares sold outside of the U.S. are done as RTU and the builders rent out the portion they own. They don’t seems to have trouble selling based upon the popular tourist destinations they are at.

 

[DougEMG]

Doesn't most of DVC's profit come from selling new resorts? All these recent changes are probably only going to have a small percentage effect to their overall profit, but it could certainly have a big effect on someone who has to sell. I wonder how much pain DVC is willing to inflict on it best customers for a few more dollars?

 

[Ben E N]

I'm starting to see a bunch of 50-75 point Polynesian contracts on the market right now, going for as little as $145 a point.
I wonder if Disney will continue trying to sell these small contracts, playing up the likelihood of getting a studio anytime of the year. If so, we will see a huge amount of Riviera contracts going for much cheaper within 3-4 years as people realize what they were sold is not what they were expecting to get.

 

[Bearval]

Doesn't most of DVC's profit come from selling new resorts? All these recent changes are probably only going to have a small percentage effect to their overall profit, but it could certainly have a big effect on someone who has to sell. I wonder how much pain DVC is willing to inflict on it best customers for a few more dollars?

I am sure they make the most from selling new properties but at sometime they will stop building since the contracts on some resorts will begin to expire and these properties will need to be heavily refurbished. What I feel they are doing is thinking 50 years ahead on how to capture the most profit they can. What they can do is for all new properties is put so many restrictions for resale’s That people will be driven to buy direct to get all the benefits such as using all of the resorts instead of just one etc.. This will drive down the price of resale’s down to a level where Disney can buy them back, repackage them and make the same profit as if they were selling new. This will take some time for all of the legacy resorts to expire but Disney is a corporation and lives forever so they can afford to wait this out. All you have to do is look back and see that this is at least the third time they have done something to drive people to buy direct.

 

[nitrot150]

OK, all this stuff has me so confused as to what it means for us.
We have 3 contracts (all at BWV)
Main one was purchased in 2011 resale (150 pts)
Second was purchased 2012 (but I don't know if it was direct or not, maybe? how can I tell? (35 pts)
Third was direct in 2013 (29 pts)


so, we haven't' hit the 75 pts, but as all were purchased before 2016, do the perks or new stuff affect us?

 

[Cyberc1978]

OK, all this stuff has me so confused as to what it means for us.
We have 3 contracts (all at BWV)
Main one was purchased in 2011 resale (150 pts)
Second was purchased 2012 (but I don't know if it was direct or not, maybe? how can I tell? (35 pts)
Third was direct in 2013 (29 pts)


so, we haven't' hit the 75 pts, but as all were purchased before 2016, do the perks or new stuff affect us?

No the resale restrictions or any of the 2016 restrictions won’t impact you and you still get to get the AP perks etc.

 

[nitrot150]

No the resale restrictions or any of the 2016 restrictions won’t impact you and you still get to get the AP perks etc.

That's good to know.
The way they state things is really confusing.

 

[KAT4DISNEY]

OK, all this stuff has me so confused as to what it means for us.
We have 3 contracts (all at BWV)
Main one was purchased in 2011 resale (150 pts)
Second was purchased 2012 (but I don't know if it was direct or not, maybe? how can I tell? (35 pts)
Third was direct in 2013 (29 pts)


so, we haven't' hit the 75 pts, but as all were purchased before 2016, do the perks or new stuff affect us?

You were grandfathered in for Membership extras with the 2011 resale. 2016 changes required that if you were a new member after that time that you had to purchase at least 25 points direct for the Membership extra qualification. Then in Jan 2018 it became any new members who were not previously grandfathered in or who owned 25 direct points that now needed to purchase at least 75 points direct.