You CAN have too many points!!!!

[Tinker Bell]

There may not be such a thing as having too many DVC points but there certainly appears to be such a thing as having too many points in a single contract. Imagine having bought a 500 pt contract at BWV a couple of years ago for $62/pt and having to sell them for $60/pt today when you could have purchased two contracts of 250 pts each for the exact same cost and sold them for $68/pt today. Over a two-year period you lost $4000 on your decision to put all 500 pts in one contract!

Do DVC guides ever advise prospective members on this issue? At what point level do contracts start to "devalue"? 300 pts?

Tinker

 

[WebmasterDoc]

You might "lose" some $$$ on the resale (you could also make some $$$ if the right buyer comes along), but you have also had the use of 1000 points during that time- which should more than make up for any potential "loss".

I'm sure guides do not counsel buyers on possible hardships if they have to sell 2 years later and I don't really think that is the guide's responsibility.

However, we can assume that responsibility here on this Board. I agree that 2 -250 point contracts- are a more practical purchase- for several reasons- than one of 500 points, but few people get into DVC imagining they will EVER sell, let alone 2 years later.

Just think of the members who bought when prices were at $56- having to sell now at $60 after getting years of benefit from their membership.

 

[DVCDAVE]

I was going to buy 550 points at VWL when I first started looking in to DVC. After, lurking on these boards most of last summer, I posted my thoughts. It was RICHYAMS that suggested splitting my purchase in 2 because of a potential problem, if I ever wanted to sell. The next morning I showed my wife a printout of the thread, and she told me to call DVC that day and buy 275 points at BWV, and tell the guide we also want 275 points at VWL when its available. That was last Aug. 31st.

When I told the guide. Jim McCoy what we wanted to do, and why, he agreed whole heartitly. Especialy when the average purchase is around 200 points. We bought the VWL when we were staying at our BWV home in March.

Jim did tell us in March that he has used our example with many other potential purchasers in planning their purchase. Both in resale, and multiple resorts planning. So, yes they are aware of the problem in resale and they are not bashful to talk about it, however, resale is not their responsiblity.

 

[WebmasterDoc]

Great, Dave. Thanks for that report.

 

[minimahaki]

I have 4 deeds and 550 points. The one deed for 150 points is considered my DD membership even though my name is on the deed with hers. The other deeds are for 270 (the original) 30, and 100. I only wish my 100 point deed was split into 2, 50 point deeds.
When my friends purchased their 300 point membership I suggested that they purchase two separate deeds which they did. Having multiple deeds are beneficial not only for re-sale (I HOPE I NEVER HAVE TO DO THAT) but also when you will the deeds. If you have 300 points and two children it is very easy to will each of them a membership rather than setting up guidelines for them to share a membership.
Lauretta
Minimahaki
DVC Members Since May, 1993

 

[Tinker Bell]

Doc & DVCDAVE,

I absolutely agree with you. This isn't a guide's responsibility.

The two "takeaways" on large point purchases are:

1. If you are buying direct, break them into smaller contracts.
2. Take an especially hard look at the re-sale market as the best bargains are in large point contracts.


Tinker

 

[invalid_char]

Why is it a problem to sell a large contract? Is it just an affordability issue? And are there more closing costs involved if you buy 2 contracts? What do the closing costs amount to anyway? We are thinking of purchasing 375 points when BCV becomes available... any suggestions?

 

[Tinker Bell]

invalid_char,

As Disney pays closing costs, I don't think there would be any extra cost in breaking your 375 pt. purchase into a 200 pt and 175 pt contract.

I can think of at least two reasons why larger contracts trade at cheaper prices in the re-sale market:

1. As you guessed, affordability. There are a lot less buyers willing or able to plunk down $25,000 or more at a single time.

2. Financing (which does tie in with #1). Disney provides sweet financing which can make the initial purchase of a large point contract manageable. Similar financing is typically not available in the resale market where larger downpayments and higher interest rates are the norm.

I think you should plan to go with two contracts. Any other views?



Tinker

 

[invalid_char]

Thanks. That's good advice Tinker Bell! We were either going to not finance or use our home equity line (prime - 1/4 pt.) I didn't think of Disney finance because I didn't think I could get a better rate. Now I'm curious.... how sweet is it?

 

[BillM]

Invilid
I have used DVC financing on a couple of add ons. But only for a 12 month duration. That rate is 50% down and the balance at around 5%.
DVC vs Home Equity. I would think Home Equity would be better. DVC's rate goes up or down with the market. Currently it should be going down. Call them and find out what the current rate is. I know you can go up to 10 years.

 

[mrsdon]

Im almost embarrassed to tell how many deeds we have. We have 22o orignal OKW points and then 150 original VB points. Then we have 2 (100) point add ons at OKW and then a 100 VB add on.

 

[DVCajun]

I see what Tink is saying, but I personally will eat peanut and butter forever before I sell ANY points!! BTW, I do have two separate contracts, but that is only because I couldn't afford all of the points I wanted at first. Of course, I STILL don't have all the points I WANT....

 

[David&Danielle]

Invalid,

Don't forget you can also deduct the interest on your home equity line. I'm not sure about that if you finance with Disney.