Guide to Selling a DVC Resale Contract

Guide to Selling a DVC Resale Contract

Selling your DVC ownership on the resale market provides an exit strategy when your vacation needs change or financial circumstances require divesting assets. Understanding the selling process helps owners maximize their return while navigating transactions smoothly from listing through closing and final transfer of ownership.

Preparing to Sell Your Contract

Before listing your DVC contract, gather essential documentation including your original purchase records, most recent annual dues statements, and membership account information. Understanding your contract details including point value, use year, and current point status helps accurately represent your listing to prospective buyers shopping the market.

Review your current point status including any banked, borrowed, or reserved points. The status of your points significantly affects buyer interest and pricing. Contracts with points already available are more attractive than those with depleted or committed allocations that limit near-term vacation utility.

Understanding Your Contract

Each DVC contract is unique, and understanding the nuances of your specific contract is crucial. The 'use year' determines when you receive your annual allotment of points, and knowing this can help you strategize your selling timeline. Additionally, any banked points from previous years or borrowed points from future years should be clearly documented, as they can influence the attractiveness of your contract to potential buyers.

Choosing a Resale Broker

Most DVC sellers work with licensed resale brokers who handle marketing, buyer communication, and transaction coordination throughout the sale process. Research broker reputation, marketing reach, and commission structures before selecting representation. Experienced DVC brokers understand the market dynamics and attract qualified buyers efficiently.

Commission rates typically range from 10-15% of the sale price, varying by broker and contract size. Some brokers offer flat-fee alternatives for larger contracts. Compare commission structures alongside service levels and marketing capabilities when selecting your listing broker for the best combination of cost and effectiveness.

Evaluating Broker Services

• Marketing Reach: Ensure the broker has a strong online presence and access to a wide network of potential buyers.
• Experience: A broker with a proven track record in DVC resales can offer valuable insights and guidance.
• Customer Service: Choose a broker who communicates effectively and is responsive to your queries and concerns.

Setting Your Asking Price

Research current market pricing for comparable contracts at your resort before setting your asking price. Consider factors including point quantity, use year, current point status, and recent comparable sales. Pricing too high extends listing time while pricing too low leaves money on the table unnecessarily.

Your broker provides market analysis and pricing guidance based on current conditions. Their experience with recent transactions informs realistic price expectations. Be prepared to adjust pricing if market conditions or buyer feedback suggest changes are needed to attract serious interest.

Factors Influencing Price

• Resort Popularity: Contracts at more popular resorts may command higher prices.
• Point Availability: Contracts with more immediate points available are typically more valuable.
• Market Trends: Stay informed about broader market trends that might affect pricing.

Marketing and Buyer Engagement

Once listed, your broker markets your contract through their website, advertising channels, and buyer networks. Quality brokers maintain active buyer databases and can match your listing with interested purchasers quickly. Marketing exposure affects how quickly your contract attracts serious offers from qualified buyers.

Expect inquiries and potentially multiple offers depending on market conditions and pricing. Your broker communicates buyer interest and presents offers for your consideration. You can accept, reject, or counter offers based on your goals and timeline for completing the sale.

Negotiating Offers

When offers start coming in, it's important to evaluate them carefully. Consider not just the price, but also the terms and conditions. Are there contingencies that could delay the sale? Is the buyer pre-approved for financing if needed? Your broker can help you navigate these considerations to achieve the best outcome.

Navigating the Sale Process

When you accept an offer, your broker coordinates with the buyer's representation and title company to prepare transaction documents. You will sign a sales contract and various closing forms. The transaction then enters Disney's ROFR review period during which Disney may exercise their purchase right at the agreed price.

If Disney waives ROFR, the sale proceeds to closing. You will receive your proceeds after deducting broker commissions, closing costs, and any prorated amounts. Typical closing timelines run 60-90 days from offer acceptance through final settlement and funds disbursement.

Understanding Right of First Refusal (ROFR)

Disney's Right of First Refusal is a key part of the DVC resale process. This gives Disney the option to purchase your contract at the agreed-upon price before allowing the sale to proceed to another buyer. While this can add a layer of complexity, it's a standard part of the process, and your broker will guide you through it.

Understanding Seller Costs

Plan for costs including broker commissions, closing fees, and potential prorations for annual dues. These costs reduce your net proceeds from the sale price. Understanding total costs helps set realistic expectations about what you will ultimately receive from your DVC sale after all deductions are processed.

Breaking Down the Costs

• Broker Commissions: As mentioned, these typically range from 10-15% of the sale price.
• Closing Costs: These can include title insurance, recording fees, and other administrative costs.
• Prorated Dues: Depending on the timing of your sale, you may need to pay a portion of the annual dues.

By understanding each step of the process and collaborating with experienced professionals, you can navigate the DVC resale market effectively and achieve a successful sale.