Over the years, it’s been rather difficult for many timeshare owners to determine if the travel purchase has actually been more affordable than retail trips. Because of undisclosed fees and the high, unchangeable interest rates of timeshare loans, a good amount of buyers want to know how to get out of vacation ownership. In fact, according to the ARDA (American Resort Development Association), nearly 1/15 fractional owners are over 120 days delinquent – most of which eventually default on timeshare mortgages and foreclose on the property. But despite documented industry trends, Disney timeshare vacation clubs believe their buyers simply don’t understand their options.
While it’s good to acknowledge that most fractional owners are uninformed, blaming the consumer isn’t a great strategy. Most people that stop making timeshare payments (because they can’t or refuse to) tend to have no faith in the system they bought into. When consumers are consistently outgrowing the purchase (in contrast to the Disney timeshare slogan), it shouldn’t be surprising, rather concerning. Although most buyers may recommend the product, understanding why a handful of some don’t should be a priority, not a dismissal.
The Reality of Delinquent Disney Timeshare Deeds.
Orange County, California alone holds annual foreclosure auctions that include hundreds of Disney timeshare deeds that outgrew people’s budgets. Whether the owners don’t see the value or they can’t keep up with maintenance fees and assessment costs, the numbers are real. Unfortunately, the people opposing the data are those that are profiting tremendously from consumer’s inability (or refusal) to pay.
In 2015, Disney Vacation Club (DVC) and some of their resale partners voiced that the default rates they experience are far less than the rest of the industry. What’s interesting is they didn’t exactly r“efute this with actual data. Out of Disney’s 200K+ owners, they say only 0.5% are involved with foreclosure auctions. This is about 1K buyers per year, which is still pretty high if you ask us. The problem is, DVC timeshare isn’t considering the hundreds of intervals they re-acquire or that entrepreneurs take over.
This is where the timeshare “experts,” that claim to specialize in Disney Vacation Club resale, come into play. DVC says they work extremely hard to find a viable option for unhappy buyers. They’re said to work with some DVC resale programs to offload contracts and that the demand is there. In reality, most of the deeded contracts are recouped by DVC for cheap and resold to new buyers. But encouraging people to trust resale programs that benefit Disney’s billion dollar timeshare operation seems a little selfish.
Often times, what ends up happening is the original owners are still on the hook for past due fees and surcharges. Even when third parties take over the deed, most get stuck with these balances and court costs as well. Disney doesn’t have to cover backed fees when they take back the deed. This is why the resale market is so sketchy. The benefit that Disney promotes here is only theirs. Besides, they have the right to refuse any resale. Even knowledgeable people or organizations have been hesitant to invest in foreclosed Disney timeshares.
Reselling DVC Timeshares Masks Default Contracts.
The Orange County Clerk of Court records from 2011-2015 shed a lot of light on how DVC controls the resale market for Disney timeshares. During this time, nearly 1100 deeds were sold every year through a Disney Vacation Club resale partner, Palm Financial Services. The average has been steadily increasing since 2013 because more people are taking chances on the Disney resale opportunities. Because of the appeal of Disney’s brand, third parties are looking to find ways to strategically rent, resell or use the intervals for themselves.
Instead of looking for ways to keep their owners happy, DVC has become committed to outbidding these risk-takers. It has gotten to a point where bidding wars are taking place. An attorney in Orlando, Justin Moorefield, shared that he and his wife attempted to buy a few dozen deeded Disney contracts but were “priced out.” In the past, entrepreneurs have been able to purchase DVC contracts for 20% less than the price of the resale market. Today, they’re lucky to find something for 10% under.
While it may be costing Disney and its partners a little bit more to buy back their timeshares, it still allows them to profit. It’s disheartening that they’re squashing the fact that (about) 10% of their owners have remorse. Moorefield went on to say, “There are three or four large-level buyers [and] there aren’t any good deals. Disney is trying to fight this basically by bidding more and more.”
How Is DVC Controlling Resale Opportunities?
Investors, Keith Dickerson and Bradley Schaffer have been able to get their skin in the game by partnering with a number of Disney-related operations like Monera Financial (DVC membership financing) and DVC Rental Store (timeshare points rental) to improve resale opportunities. “It looks like a lot more people have been bidding – not winning, but bidding,” Shaffer said. To date, the two have been able to enjoy and profit from buyer inconveniences by referring them to Disney affiliations.
Without the right connections, buying a foreclosed Disney timeshare can be very difficult. Fluctuating prices, inconsistencies and a resale market controlled by DVC makes it this way. While the opportunity to enjoy, rent or sell a Disney Vacation Club may be more appealing than most timeshare deeds, don’t let the prominence of the brand fool you. Even the retired CEO of ARDA, Howard Nusbaum, promotes caution here by saying, “The onus is on you to do your research.”
If you have any questions about the actualities of your agreement or you’re considering selling a Disney timeshare, don’t make an impulse decision. Think things through and map out potential outcomes. Sometimes, legally canceling the contract is your best option – even when Disney and their partnership programs claim you’ll never outgrow the purchase.