06 Aug Here’s What You Need to Know before Selling Your DVC Contract
Have you considered selling your DVC membership? During the pandemic, many DVC owners have gotten rid of their ownership interests.
Some people needed the money, while others wanted to do a bit of profit-taking, knowing that their contracts appreciated value.
Before you take this approach, you must read this! Here’s what you need to know before selling your Disney Vacation Club membership.
Knowing What your Contract Is Worth
When did you buy your DVC contract? I ask because it’s an integral part of selling a Disney club membership.
You may not even know this fact, but you’ve likely made money on the deal, especially if you purchased several years ago.
Each time DVC raises prices for its direct purchase program, even resale contracts increase in value.
Since 2014, DVC has boosted the price per point by more than $100 at some resorts. So, your investment has gone up in lockstep with these price increases.
You’ll benefit from the change in value. First, you must learn what your contract is worth, though.
The value of your contract will depend on several factors, most of which are beyond your control.
We’ll discuss what a potential buyer looks for in the next section. For now, what I’ll say is that you’ll earn more per point with a smaller contract.
When you sell a DVC membership, you’re not interested in the points inasmuch as the total value of your contract, though.
This information will provide a baseline for how much you should expect to receive.
As with any other real estate purchase, some of the earnings will go to the listing and licensing agents, but you’ll have a general idea about profit.
Until you have this information, you shouldn’t sell. Otherwise, you may feel persuaded to accept a lowball offer, not understanding you could do better.
Don’t be afraid to ask for help if the numbers confuse you, as DVC purchases come with lots of math!
Knowing What a Potential Buyer Wants
Did you purchase directly from Disney or via resales? I ask because the answer will determine how familiar you are with the intricacies of resales contracts.
When you sell a Disney club membership, your contract will include four aspects of interest to potential buyers.
The first item is the number of points that have to sell. While you can theoretically split your contract, it’s easiest to perform a single transaction.
Smaller contracts tend to sell more quickly, but there’s a constant demand for all but the largest ones. And I’m taking the 500+ point contracts.
Everything else is effectively priced to move in what’s currently a seller’s market.
Interested buyers will also want to know where you own. This information may not have been important to you as a member, but it’s vital to some.
As a reminder, when you own a DVC resort, you can book a reservation at the 11-month window. For the others, you must wait until seven months.
At desired resorts, the extra four months often mean the difference between getting the desired reservation versus settling somewhere else.
For this reason, DVC resales listings reflect the popularity of some home resorts over others.
Also, while Use Years aren’t a factor to many, a portion of owners care deeply about them.
So, your Use Year will automatically entice or discourage a percentage of potential buyers.
The Other Thing a Buyer Wants
Finally, the number of DVC points you have available will impact your selling price.
Virtually all buyers would prefer overflow contracts. These are the ones where you didn’t spend your points last year and haven’t yet this year.
You’ve got double the points, and the new owner can use them to take a trip immediately after the transaction completes!
You can price your contract higher when you have extra points, as that’s what a buyer wants.
However, if you have spent all your points, that’s okay. Stripped contracts with zero points still sell, just not for as much money.
Think of the situation from a buyer’s perspective. If you’re spending thousands of dollars on a contract, which would you want?
Your choices are a contract that allows you to visit Walt Disney World this year vs. waiting until the Use Year after next. Now is better, right?
When you sell your DVC contract, you should always keep the buyer’s mentality in mind to maximize your revenue.
Knowing How to List Your Contract
You actually don’t need to know much about the process to list your contract.
Simply contact one of our agents, and we’ll talk you through the process.
Still, you should be aware of how the process works. You’ll want to settle on a listing price.
When you pick this total, you should also understand that your listing may sell for less.
Some sellers pick a list price with some haggle room. They list the price high, knowing that they’ll accept slightly lower.
Others don’t want to negotiate at all. They’ve chosen a price they believe is fair, and that’s the end of it.
Similarly, some potential buyers will make lowball offers in hopes of getting a great deal.
You can tell a broker to reject any insulting offers so as to not be bothered.
In short, the process works similarly to selling a used car or a home.
The other part you should understand is that the process takes a few months to complete, especially during the pandemic.
You may quickly find a buyer who agrees to your asking price. Even if you both fill out the paperwork immediately, you’re subject to delays.
DVC maintains the first right of refusal, which won’t impact you as a seller. You’ll get paid either way. However, it’s a bottleneck in the process.
Similarly, filing the deed to record the real estate transaction isn’t immediate.
These are trifling concerns as long as you get paid a lot of money for your DVC contract, though, right?
If you joined DVC five or more years ago, I’m confident you’ll do just that. Congratulations in advance!