How to Sell Your DVC Points0 Comments
So you have decided to sell your Disney Vacation Club Membership or perhaps seriously considering it. Perhaps some of the family can no longer travel, perhaps the family has outgrown Disney vacations or maybe the money is needed for other things? Regardless, I want to provide step by step instructions of the do’s and don’ts when it comes to selling Disney Vacation Club and overall what to expect.
Find a DVC Specialist That Is a Licensed And Insured Broker. Sometimes sellers will attempt to sell their contracts themselves. The difficulty with this is that DVC is highly unique and detailed product, so to educate someone without a lot of experience can be challenging. For this reason I also recommend choosing someone that just does not sell timeshare but someone that specializes in and exclusively sells Disney Vacation Club. In addition, having a properly drawn up contract is critical. To have an attorney create a contract may costs more than the commission you would have paid a broker anyway. Attempting to create the contract yourself could leave yourself open to a lot of liability and if you do not have any form of PLI (professional liability insurance) the consequences can be damaging through civil lawsuits. To put it bluntly, you do not want to fall into the crowd of being “a penny smart and a dollar foolish”. With the right broker, the commission is worth every penny.
Do Not Pay Any Upfront Fees! If any broker mentions you paying an upfront fee I advise you to not use their services. Think about this, if they have already been paid what is their motivation to sell your contract? They may even tell you this is standard, but I can assure you that it is not.
Understand What Your Disney Vacation Contract is Worth. There are several factors that will determine the value of a Disney Vacation Club contract. Those factors are as follows:
- Size of the Contract (100 points come every year vs. 200 points come every year). Keep in mind as a contract gets larger the total price increases while the price per point decreases since the amount of buyers shrinks with less affordability. The opposite is true for smaller contracts since the affordability is greater the price per point increases.
- Resort the Contract is Deeded Into. The more valuable having home resort priority at a particular resort can greatly influence the price. For example, if a resort has a smaller amount of villas and is typically in high demand its value will increase. A great example of this is with the Beach Club Resort. The Beach Club has 282 rooms, which is small by comparison to other DVC Resorts, has perhaps the most popular pool at Disney World (Stormalong Bay – that can only be used when staying there) and is next door to EPCOT, thus driving the market value up.
- Current Point Availability. To put it simply, the more points available for use the higher the value of the contract. Typically each year of points can add on average $4/pt. to the asking price, and this can vary based on resort. Contracts can be listed with no points available until the following year, which is referred to as a “stripped contract” and conversely, contracts can be listed with 2 years of points on them and this year’s points coming, which is referred to as a “triple” or “loaded”.
- Miscellaneous Factors such as Subsidized Dues or a Contract Extension. With Aulani there are “subsidized dues” contracts available in which Disney will pay $1.62 per point per year of the dues for the life of the membership. This usually raises the price of an Aulani contract about $8-10/pt. because of the large costs savings. These contracts would be for anyone that purchased Aulani prior to July 5th, 2011. Also, Disney offered a contract extension to owners of Old Key West in 2007. If someone purchased the extension or purchased an Old Key West contract directly through Disney in 2007 or later their contract will expire in 2057 rather than 2042. This extension typically adds another $7-9/pt. to the asking price.
Get a Clear Expectation of What Your Net Proceeds Should Be. Typically, what a seller should expect to pay is $70 in fees (estoppel the title company orders from Disney and recording the right of first refusal waiver) plus the sales commission. And the commission should not exceed 10% of the sales price. Also, it is typical for a buyer to pay annual dues on the points they are getting especially if it’s in the current use year. So if you pay your dues annually up front in January and you are conveying the entire amount of that year’s points it is fair to ask for those annual dues be reimbursed to you at the closing. Contrarily, if all the points are gone for the current year and there is still money owed to Disney for that year’s dues it is common for the seller to pay that year’s remaining dues at closing.
Understand the Timeline of Events in the Sales Process. From the time of initialing listing a contract to receiving proceeds of the sale may typically take anywhere from 70-80 days. If a listing is priced competitively it typically sells on average in about 15 days. From time of sale it takes another 60 days for the closing to occur, and the timeline below demonstrates the process. Please note, that if there is a pending reservation on a contract the contract cannot close until that reservation is complete, which will delay the closing process.
Click on the timeline to enlarge.
Article Posted by: Nick Cotton