Understanding the Purchase Process for a Disney Vacation Club Resale!

While the purchase process for a Disney Vacation Club resale can seem confusing to consumers just learning about the secondary market for timeshares and vacation properties, these four simple steps should help to guide you through a Disney Vacation Club purchase process safely and successfully.

1. Choose a respected DVC resale brokerage to assist you with your transaction. An experienced real estate agent specializing in Disney timeshare resales will be able to help and protect you throughout the entire purchase process.  If you perform step one, you'll have help with every step that follows!
   
2. Your first task in researching DVC resales should simply be reviewing the Disney Vacation Club point charts.  You can find links to points charts for all the DVC resorts on this website. Think about what specific Disney resorts you want to visit, when you want to travel, how long you will vacation, and what type of villa you will need. Cross reference that with the points charts and write down the number of points you expect to use for each vacation. When you total these numbers, that will give you your first indication of what size DVC point allotment you should target.
   
3.  Next, you need to decide if you want to target a specific Disney Vacation Club home resort. DVC owners have a longer reservation window at their home resort, so they have a better opportunity to find availability during high demand periods.If you want to secure a Wilderness Lodge Villa for Christmas week, it is a good idea to target that resort for resale acquisition. Likewise, if you primarily want to stay at the Beach Club Villas- then tell your agent to only target that resort. Currently, the Villas at the Grand Californian is probably the single most difficult resort to secure a reservation for DVC members who do not own there. If you plan on exploring all the Disney resorts, or plan to travel during lower demand seasons- then you can easily focus on finding the best combination of price and maintenance fees to meet your needs.
   
4. Prospective Disney Vacation Club buyers should also understand how annual maintenance fees are determined. Fees are calculated on a per point basis, but they can vary widely by home resort. At this time, DVC's Bay Lake Tower at the Contemporary Resort has the lowest per point maintenance fees at $4.2219 and Disney's Vero Beach Resort has the highest at $7.1163. Your annual dues and taxes will be the cost you have each year to maintain your ownership, and these fees will most likely increase each year. Again- you can find comprehensive information on historical DVC maintenance fees for each resort on this website.
   
5. Once you have decided how many Disney Vacation Club points to buy, and which DVC resort you want to target- you can then ask for specific offer advice from your real estate agent so you understand approximately how much you will need to spend to purchase your ideal Disney Vacation Club membership. If this is going to be a cash purchase- you proceed directly to the offer and counter offer process with your agent.
   
6. If you need financing, you'll have three basic choices: A) Purchase directly through Disney Vacation Club to obtain developer financing. This is the easiest method, but you'll pay full developer price. Your ownership will not suffer any resale restrictions, however- so even though it pains me as a resale broker to say this- buyers should always consider this option! B) Secure personal financing from your bank or credit union. Most likely this will have to be done as either a personal signature line, or as a home equity line of credit. If you can secure a HELOC, this will most likely be the most beneficial form of financing available as the interest rates are often very low and you'll be able to deduct the interest you pay from your taxes. C) Apply for a third-party loan on your DVC purchase. This final option has become much more difficult over the past few years. There are still a few lenders who will offer financing for a DVD resale purchase, but they normally require very high credit ratings. If you want to pursue this option, please contact me through my full profile for a direct referral.
   
7. The Offer and Counter Offer Stage! After you have located a few prospect listings you want to target and know whether you are making a cash offer or a financed offer, you'll simply tell your real estate agent what offers to present to the sellers. Always be willing to offer less than asking! Most sellers are negotiable, so it never hurts to make an offer. Your agent should also cover information such as closing costs and potential maintenance fee reimbursement with you prior to calling any sellers. If you aren't 100% sure you understand the financials of the offer, ask the agent to provide with a good faith estimate of closing expense to ensure you know exactly what to expect if the offer is accepted.  If your offer is accepted, you proceed to contract preparation. If not, your agent should solicit a counter offer from the seller and go back and forth between parties until either an agreement is reached or you abandon that seller and move on to another.
   
8. The contract process is a specialized real estate contract specific to Disney Vacation Club timeshares. There are mandatory state specific disclosures that will have to be included in the purchase agreement, as well as specific language concerning the financials and point status of the contract being purchased. Both parties will sign the contracts, which are then submitted to Disney Vacation Club for the developer's right of first refusal. If Disney feels the offer is below market, they have the right to replace the buyer in the transaction. If this happens, any escrow deposits should be returned promptly to you and you'll start the offer process again. If Disney waives their right of first refusal- your transaction will proceed to the closing process.
   
9. You will find more specific information regarding the Right of First Refusal Process, deeding and escrow, as well as title insurance options elsewhere on this website. 
   
   
   
   
   The Progressive Real Estate Agency is a licensed Florida real estate brokerage that specializes only in timeshare resales and rentals. To contact a timeshare specialist with the Progressive Real Estate Agency who can assist you in purchasing a Disney Vacation Club timeshare points ownership, please click here to visit http://dvclistings.com.

What is "Vesting" on a Timeshare Deed?

Vesting is how a deeded owner holds title to the property. Vesting options for real property can impact future legal, tax, and estate decisions. During a timeshare closing, your escrow or closing agent should send you a closing packet asking you to choose a vesting option. Every state has its own regulations, so not all vesting options will be available in each state. If you are unsure what to do, consult with your title agent and with a real estate attorney in the state where the property is located.

Sole Ownership or Tenant in Severalty is ownership by one individual or legal entity.

Joint Tenancy is ownership by two or more. The characteristic of joint tenancy is that if one owner dies, the surviving owner(s) take title and a probate process would not be required.

Tenants in Common is ownership by two or more where each owner has an undivided interest.

Tenants by the Entirety is ownership for husband and wife. It is similar to a joint tenancy but for legal purposes they are considered to be one entity. This is a common vesting in Florida.

Community Property is ownership by a married couple where each spouse owns one-half of the property bought during their marriage. California is a community property state.

What is Disney Vacation Club's Right of First Refusal?

Disney Vacation Development, Inc has the first right to purchase any Disney Vacation Club (DVC) real estate interest that is sold on the secondary market. Basically, what this means is that every resale contract must be submitted to Disney for review prior to closing. If DVC feels the purchase price is below market, they have the right to assume the position of the Buyer in the contract and purchase the ownership from the Seller at the contracted price.

When Disney exercises their right of first refusal (ROFR), the original Buyer is released from the contract to purchase. The Seller continues on with the closing as before, only now they are deeding the interest back to Disney. The terms of the sale remain the same, except that a third-party closing agent is no longer used- as Disney handles the new deeding process internally.

The purpose of DVC's Right of First Refusal process is to help control and maintain the value of their timeshare properties. All aspects of a sale are considered by DVD including, but not limited to: sales price, number of vacation points, dues reimbursements, and closing cost distribution. While the ROFR process can be frustrating to a buyer, the end result can be positive for all owners- as consistent decisions for ROFR help to maintain a more consistent resale market for owners. During the recent challenging economic period, Disney has become far less aggressive in assuming contracts. A possible result of this inactivity is the decline in resale prices over the past year.

If you are the buyer, and DVC exercises their right of first refusal and replaces you in the transaction, any funds you have deposited into escrow should be promptly refunded in full. You can then make another offer to purchase a DVC resale.