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Are you thinking of selling your Disney Vacation Club membership? You’ve come to the right place! In this guide we will discuss the most important factors DVC members need to consider when navigating the resale market and provide the steps you need to take to safely and securely sell your DVC points.
Important DVC Membership Details
Before selling your contract, it is crucial to understand what you own in order to effectively market your membership. You can find the majority of your ownership details in your online DVC Member account. Some of the key details you’ll need to know include:
- Names on your Deed: Ensure all names on your deed are accurate. Is anyone deceased, divorced or had a name change?
- Home Resort: Confirm which resort your contract is attached to. (You may own more than one.)
- Use Year: This is the month when your points renew each year. (You may have more than one.)
- Annual Points: How many points you receive each year, also referred to as your “contract size.”
- Point Availability: How many points you have in the account for the current and future use years, including any banked points.
Important Financial Considerations
Before selling your Disney Vacation Club contract, there are some financial components to consider that may be unique to your situation.
Staying Current on Dues & Loans:
Keep up with your annual dues and any loan payments while your membership is listed for sale. This will ensure the sale process runs smoothly. If you’re behind on dues or loan payments, contact a trusted broker for guidance on your situation. If you’re facing foreclosure, the sooner you reach out for help, the better!
Aulani Contracts & Taxes:
Aulani contract sales are subject to Hawaii’s 7.25% tax on non-resident real estate transactions. However, you may qualify for an exemption if the sale results in a monetary loss. Consult with an accountant for clarity on tax implications.
International Sellers & Taxes:
Non-U.S. citizens selling U.S. property are subject to a 15% tax withholding of the sale proceeds. You may qualify for a reduction in the amount due if the sale results in a monetary loss or your profit on the sale is less than the withholding amount. Consult with an accountant for clarity on tax implications.
Know What Benefits Transfer
Not all DVC benefits are transferred during the resale of your Disney Vacation Club. There are General Resale Restrictions on Member Perks such as dining discounts, annual passes, special event access, and other benefits available to direct buyers that will not transfer to resale buyers.
Further, there are specific resorts that have restrictions regarding how points can be used with those contracts. These include: Riviera Resort, Villas at Disneyland Hotel, and the Cabins at Fort Wilderness. When selling one of these properties on the resale market, once the membership has transferred, the buyer may only book at their Home Resort, they cannot trade out to any other DVC properties. These restrictions tend to limit demand and ultimately impact the ability to sell your DVC membership. If selling one of these resorts, it’s important to speak to a qualified broker about your options and how to price competitively.
What Determines DVC Contract Value
The value of a DVC contract is influenced by a number of factors, including the Home Resort, contract size, points available, and current market conditions and member benefits.
Home Resort
Resort features and proximity to theme parks affect popularity and pricing. For example, Disney’s Grand Californian is the smallest DVC property and tends to have fewer listings come up for sale. The limited availability of contacts for sale and the location of the resort, makes it typically the highest priced property on the market.
Home Resort determines contract expiration dates. Contracts expiring sooner in 2042 generally have lower market values due to having fewer remaining years.
Your annual dues are also set by your Home Resort, and resorts with higher dues tend to be lower priced on the DVC resale market.
As previously mentioned, some resorts have restricted-uses once sold on the resale market and this negatively affects value.
Contract Size
Smaller contracts, typically 50 points or less, often command a higher price than average due to simple supply and demand: there are more buyers for smaller contracts than there are available listings. This is because smaller contracts have lower upfront costs and annual dues. Additionally, Disney has minimum purchase requirements for direct sales but not for resale, making smaller contracts attractive to both new and existing owners. This expands the potential buyer pool, further driving up demand and prices for these listings.
Larger contracts, typically 300 points or more, often sell for less than average. Again, this comes down to supply and demand: there are fewer buyers for larger contracts as upfront costs are higher.
Points Available
How many points, or how few points you have immediately available to a buyer can influence value. A contract with current Use Year points and banked points from last year, provides a buyer with ample vacation opportunities and they may offer more for a property like this. On the other hand, a contract with no current Use Year points or points that may be restricted like “holding points’, means the buyer has to wait or alter their upcoming vacation plans. These listings tend to sell for a little less than others, to offset the lack of available points.
DVC Resale Market Trends
There are many external factors that can also affect pricing on the resale market. One of them being Disney’s own Right of First Refusal (ROFR). Disney reserves the right to purchase back any DVC membership before a sale to a third party is finalized. If Disney exercises ROFR, they will buy the membership at the terms agreed upon with your buyer. When Disney is actively exercising their right to buy certain resorts, this creates more demand on the resale market and higher prices. Other things to consider:
- The volume of active listings for your specific resort – more inventory means more competition whereas less inventory creates higher demand.
- Disney’s direct sale price for the resort you’re selling – discounted offerings or incentives to buy direct can lead to lower prices on the resale market.
- The Stock Market – when the stock market drops, people may feel less wealthy and spend less, which can slow down the market, especially for luxury goods.
- Other economic factors – job losses, tight credit conditions, and lower consumer confidence can impact values.
Selling Options
There are multiple options when it comes to selling your DVC membership and it ultimately comes down to personal preference. These include:
Broker Listing: Work with a licensed real estate broker to list and market your membership on the open resale market. This is the most common avenue and provides the most protection for your transaction.
Private Sale: This is a less common option, but possible if you prefer to manage the process independently or have your own buyer.
Instant Sale (or Quick Sale): This is typically a below-market offer from a Broker or individual, that allows for sale contracts to be signed immediately, with no time spent on the open market. This is offered from time-to-time and not all properties will qualify for this option.
The Sale Process
Once an offer is accepted, a contract is signed, and the closing process begins. A licensed title company ensures the transfer is smooth, protecting both buyer and seller. After the transfer, you’ll receive your proceeds minus any applicable fees.
A typical DVC resale transaction takes 45-60 days to complete. This includes initial signing of contracts, Disney’s Right of First Refusal process, and the signing of final closing documents. Hawaii closings can take a little but longer due to their specific state laws and title processes.
Selling your DVC membership can be straightforward with the proper guidance. Partner with a reputable broker, like Vacation Club Life, to secure the best outcome for your sale.
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