Resale or direct

[hamilkm]

We bought our first contracts direct (Poly and CC). I did this for 3 reasons. First is these are the resorts we wanted 11 month priority for and would be perfectly happy staying at these resorts. Resale for the resort they are currently selling (excluding RIV with the changes) usually doesn’t save much. Second reason was I wanted to buy small contracts, so I could pay cash. We own 2 60 point contracts, a 70 point contract, and a 90 point contract. With closing costs doing this resale would be expensive. The third reason was the ability to buy the gold AP. For those of us that live out of state, this AP saves us $350 per person per year. We purchased platinum AP yearly prior to DVC. We don’t mind the black out dates and saved over a thousand dollars just this year in AP renewals.

I also just closed on an AKL add on resale. It made no sense to me to spend more money on more direct points since I already have the benefits. These points are exclusively to use for a one bedroom every other year at AKL (2 bathrooms!).

So the only reason I would buy direct over resale is if you already buy out of state AP every year and would utilize the gold pass instead or if like me you want to add on in small increments (I’m not sure what the minimum is at RIV) to avoid financing. We don’t regret our direct or resale purchase!

 

[HeightRequirement]

Especially for the resorts that are expiring soon. Will you save enough with the direct benefits versus going resale in the amount of time left on the contract?

 

[eandt]

We bought our first contracts direct (Poly and CC). I did this for 3 reasons. First is these are the resorts we wanted 11 month priority for and would be perfectly happy staying at these resorts. Resale for the resort they are currently selling (excluding RIV with the changes) usually doesn’t save much. Second reason was I wanted to buy small contracts, so I could pay cash. We own 2 60 point contracts, a 70 point contract, and a 90 point contract. With closing costs doing this resale would be expensive. The third reason was the ability to buy the gold AP. For those of us that live out of state, this AP saves us $350 per person per year. We purchased platinum AP yearly prior to DVC. We don’t mind the black out dates and saved over a thousand dollars just this year in AP renewals.

I also just closed on an AKL add on resale. It made no sense to me to spend more money on more direct points since I already have the benefits. These points are exclusively to use for a one bedroom every other year at AKL (2 bathrooms!).

So the only reason I would buy direct over resale is if you already buy out of state AP every year and would utilize the gold pass instead or if like me you want to add on in small increments (I’m not sure what the minimum is at RIV) to avoid financing. We don’t regret our direct or resale purchase!

What do you mean by this? If you buy multiple contracts (say two 50 point) direct wouldn't there also be 2 separate closing costs? Forgive me if I am missing the obvious but we have thought about buying two small contracts and figured that there would be double closing costs whether it were direct purchase or resale.

 

[prs_14]

On resale versus direct, the only additional point I would make is that you need to look at the whole financial picture (i.e., up-front cost to purchase plus all future annual dues). The annual dues are a big piece of what you will be paying for DVC and they are the same whether you buy direct or resale.

You are looking at the Poly and the Grand Floridian. The "up-front" discount looks massive ($100 per point, or 40% off), but when you take into account what you are signing up for in terms of dues, the savings are more like ~20% on the whole package.

So the question is: is a 20% premium worth the ability to stay in all future resorts? For us, the answer was "yes" because that was important to us. We know the dollars are big and we get it. But we at least wanted the option to stay at Reflections, the new Disneyland resort if it happens, and all else on the horizon.

My two cents . . .

 

[hamilkm]

What do you mean by this? If you buy multiple contracts (say two 50 point) direct wouldn't there also be 2 separate closing costs? Forgive me if I am missing the obvious but we have thought about buying two small contracts and figured that there would be double closing costs whether it were direct purchase or resale.

Yes but direct closing costs are like half of resale.

 

[eandt]

Yes but direct closing costs are like half of resale.

Ok I did not know that. Thanks

 

[Sandisw]

Yes but direct closing costs are like half of resale.

I don’t think they are half anymore. I just bought direct and I believe they were around $500

 

[eandt]

I don’t think they are half anymore. I just bought direct and I believe they were around $500

I don’t think they are half anymore. I just bought direct and I believe they were around $500

Yeah I was quoted around $450 on a 100 point AK contract. What I have been trying to get from our guide and other guides on DVC website chat is how the closing costs are determined. They will not give the information and its infuriating. All I want to know is if it's a set costs based on # of points, point costs, flat fee or what? Really not sure why there is the secrecy, I won't pay for a carton of milk without knowing exactly what it is costing me so there is no way I will spend 10's of 1000s of $ without knowing to the penny what the upfront costs will be ....

 

[kboo]

I'd be interested to know if anyone here advocating purchasing re-sale vs direct is not a "grandfathered" re-sale buyer. To me it's much easier for those with full memberships to say don't buy direct than it is for those of us wrestling with the re-sale vs direct decision since Jan 2019.

I am, but at the time had to buy 25 points direct to get the blue card (but then we later bought RIV direct anyway). But at the time we bought in (2017), the only resorts were the L14 anyway. We bought BLT resale and saved about $80pp from direct. We had no idea what new resorts might be coming online, it was all about whether we wanted BLT (or at the time, BWV or BCV) as a home resort.

Since Jan 2019 I have suggested some friends to buy resale and others direct at RIV, and here's where I have drawn the line:

If you want a home resort in the EP/HS area, *to me* RIV direct is a fair comparison to BWV/BCV resale, largely because of the 2042 end date. But RIV direct is competitive and worth consideration.

If you definitely want WDW but want to sleep around and want AP discounts benefits, and don't mind or actually like OKW or SSR, then OKW or SSR direct is worth considering too. You'll have a late-ish end date (all OKW direct is extended), refurbished rooms, and access to new resorts.

If you don't fall into either category, then I suggest resale at the resort you like.

Even though we had full benefits to sleep around, we have used our home resort points at 11 months for our first 5-6 stays over 3 years. Our first 7-mo booking is for 1 night at VGC later this year (we rented 2 nights from an owner there). Our next several trips for 2020 and beyond are planned for our home resorts. I know it's hard to value or discount the psychological value of being able to sleep around. But think about when you might actually use it, and it turns out you probably won't miss it. Or, rent out your points and use the $ to rent someone else's points. Just because you own DVC doesn't mean you can never pay cash or transfer or rent points from someone else.

If you buy Poly or VGF points, you won't have *any* trouble renting them out if you want to then rent or trade points for RIV or REF.

 

[Mzpalmtree]

We just grappled with the resale vs direct conundrum and resale won. In the end it was all about the money we saved up front, which as others have indicated may be short sighted but I guess we will see. We started out looking at buying 100 points resale at Poly because it’s our favorite, but thinking about the diminishing number of L14 resorts after 2042 and the fear that it may be harder to use our resale points after that had us looking first at BWV or BRV resale (we are in our 40s so contract length isn’t as important) and then at direct AKV...we could just not stomach the Poly direct mark up direct. We inquired about buying AKV direct and our guide pretty much ditched us after it became clear that we did not want riviera due to resale restrictions. So we ended up deciding to go AKV resale which saved about 14k over direct and increased the amount of points we were going to buy. My heart still belongs to Poly but AKV seemed like the right choice with the shorter (but not too short lifetime) as a resale contract and we do like AKV. It’s funny how your priorities morph in your search. We may still buy direct in the future if we enjoy our AKV contract and we can put the money we saved going resale toward it—hopefully the don’t increase the required amount of points before we decide.

 

[Sandisw]

Yeah I was quoted around $450 on a 100 point AK contract. What I have been trying to get from our guide and other guides on DVC website chat is how the closing costs are determined. They will not give the information and its infuriating. All I want to know is if it's a set costs based on # of points, point costs, flat fee or what? Really not sure why there is the secrecy, I won't pay for a carton of milk without knowing exactly what it is costing me so there is no way I will spend 10's of 1000s of $ without knowing to the penny what the upfront costs will be ....

According to my documents, for 175, it was $195 for document preparation. Title insurance was $189.18, recording fees were $18.50, and county/city tax stamps of $230.30.

So, my costs were over $600. I am going to stay that the document prep and recording are probably the same. The others based on contract size,

Hope this helps. I would also check to see on a resale contract of similar size to see what they list as closing costs and See how it compares to what Disney quoted you.

 

[HeightRequirement]

What do you mean by this? If you buy multiple contracts (say two 50 point) direct wouldn't there also be 2 separate closing costs? Forgive me if I am missing the obvious but we have thought about buying two small contracts and figured that there would be double closing costs whether it were direct purchase or resale.

I believe the closing costs with DVC are a lot lower than with a broker.

 

[eandt]

According to my documents, for 175, it was $195 for document preparation. Title insurance was $189.18, recording fees were $18.50, and county/city tax stamps of $230.30.

So, my costs were over $600. I am going to stay that the document prep and recording are probably the same. The others based on contract size,

Hope this helps. I would also check to see on a resale contract of similar size to see what they list as closing costs and See how it compares to what Disney quoted you.

Thank you!

 

[TTA Rider Matt]

I just bought resale at Poly and saved $108 per point for 100 points. For that amount of current money, I just could not justify spending that much more per point. If I never add on (which I believe I will), my plan is to go 2-3 times every 4 years, doing split stays between Poly and OKW/SS/AKV/and if I'm lucky BWV. Even in 2042, I can still access AKV and SS. I am kind of looking at this as a "I'll deal with it in 22 years if it doesn't work out the way I want it to." Overall though, I am thrilled to have 100 points at Poly and I literally spent almost $11,000 less than direct.

 

[RoseGold]

I'd be interested to know if anyone here advocating purchasing re-sale vs direct is not a "grandfathered" re-sale buyer. To me it's much easier for those with full memberships to say don't buy direct than it is for those of us wrestling with the re-sale vs direct decision since Jan 2019.

I'm not grandfathered, I just like math.

I don't use annual passes, can't go to the party, don't care about a few bucks off the golf/massage I'm not doing, and don't want to stay at RIV. The blue card would be worthless to me, except for dining discounts. Even that is spotty and I can get most of with the free Disney credit card. Nowhere close to worth thousands of dollars.

Heck, it might even be mathematically better to be in the new third class of resale shame that can only stay RIV. We don't have the math yet to know that.

Direct is more compelling, maybe, with the new California property. Demand is way built up there, like VGC.

 

[kboo]

new third class of resale shame that can only stay RIV

I love this!!!

To the OP - all our prior points are grandfathered, so I was in the camp of "willing to look shamefully and lowball shamelessly" for a resale RIV contract to use for split stays with our MK resorts. But the FOMO took over (not really) and the cost of waiting for 1-2 years didn't seem worth it to save a little, given the incentives they were offering for RIV.

 

[Can_Dannn]

I look at it this way:
DIRECT PURCHASE (AKL for example)
[this is NOT considering inflation]

• 100 points x 186$/pt = 18,600
• Annual dues = 767$
• Factor in a 1% increase each year (again without inflation)
• Contract goes to 2057 which is about 37 years
• TOTAL PRICE OVER THE 37 years = 85,306$
• Divide the total by 37 years, and it’s about 1,895$/year cost for 37 years of vacation
  • Resale calculations resulted in 1,720$/year

WHAT DOES THIS ALL MEAN? is saving 150$/year worth all that you’re going to lose? For us, no- we can spare the 150$/year difference and get things like all Disney resorts, cruises, RCI exchange and all new resorts.
Your needs may be different

 

[crvetter]

I look at it this way:
DIRECT PURCHASE (AKL for example)
[this is NOT considering inflation]

• 100 points x 186$/pt = 18,600
• Annual dues = 767$
• Factor in a 1% increase each year (again without inflation)
• Contract goes to 2057 which is about 37 years
• TOTAL PRICE OVER THE 37 years = 85,306$
• Divide the total by 37 years, and it’s about 1,895$/year cost for 37 years of vacation
  • Resale calculations resulted in 1,720$/year

WHAT DOES THIS ALL MEAN? is saving 150$/year worth all that you’re going to lose? For us, no- we can spare the 150$/year difference and get things like all Disney resorts, cruises, RCI exchange and all new resorts.
Your needs may be different

The easiest way to look at what it is costing you is assume the spread between direct and resale (~$75 for AKV) is invested at some rate of return and discounted at inflation. No need to consider the Dues since that is the exact same on each side of the analysis so would cancel out. You need to consider the reinvestment of that savings by going resale because that wasn't locked up in the DVC contract (so to make it apples to apples you need to lock that cash up in something). So lets assume 5% rate of return and 2% inflation (both conservative) tells me the cost of the $75 spread is equal to $75 * 1.05^37 / 1.02^37 = $219.21 per point (in 2020 dollars) over the entire length of the contract. If you want to average that over the entire contract life you get ~$5.92 a point bought. So that 100 point contract is really costing you ~$600 a year more (again in 2020 dollars). Though it really is less than $600 a year cause that averaging it out ignores again the investment income but for the sake of simplicity I'm ignoring it here.

Now you can start factoring in the benefits (DVC AP discounts, etc) to see if that ~$600 a year is worth it. But that $150 a year you determined ignored the opportunity value of that $75 spread that assuming you are paying cash for direct meant you had that $ to invest in long term appreciating assets to realize a return at the end of the 37 years.

I'm also someone that bought direct and resale so I'm not opposed to either but it is important to know the differences.

 

[Soap_1984]

Someone else surely has mentioned this but if you are buying vgf I wouldn't be planning on using those points anywhere else.

I'd just buy resale you would be flushing thousands and thousands away and you can always rent your points and use cash to try a new resort.

What I've realized however coming on here with these type of posts is most of the time people just do what they want lol. So good luck either way!

 

[Soap_1984]

I look at it this way:
DIRECT PURCHASE (AKL for example)
[this is NOT considering inflation]

• 100 points x 186$/pt = 18,600
• Annual dues = 767$
• Factor in a 1% increase each year (again without inflation)
• Contract goes to 2057 which is about 37 years
• TOTAL PRICE OVER THE 37 years = 85,306$
• Divide the total by 37 years, and it’s about 1,895$/year cost for 37 years of vacation
  • Resale calculations resulted in 1,720$/year

WHAT DOES THIS ALL MEAN? is saving 150$/year worth all that you’re going to lose? For us, no- we can spare the 150$/year difference and get things like all Disney resorts, cruises, RCI exchange and all new resorts.
Your needs may be different

This is not a good way to look at it. You are going to save $7-8k today that's the comparison. If you're financing it's even greater.

With 100 points you get no benefit from the AP discount unless you are buying more points.