Valuing DVC contracts

[keenercam]

Hi, everyone. I've looked at the posts about ROFR to get an idea, but I'm not sure that is the best place, considering there has to be room for commissions. So here's the question: how does one value DVC contracts for a valuation of personal assets?

 

[CanadaDisney05]

Since this is just an internal calculation with no real-world consequences, I would just look at some of the resale sights to get an idea of the going rates for your resort and point total. From there, subtract an estimate of commission and sales price (I think in general brokers charge about 10%).

You are never going to get a perfect answer, and it doesn't really matter until you are actually trying to sell anyways.

 

[ELMC]

Good question. I would use current listing price on resale sites minus a few dollars per point for negotiation and then take the 8-10% commission off of that as well. That would give you the current value of your contract for your personal asset balance sheet. HOWEVER...it is a bit of a conundrum because it is only worth that if you sell and if you sell it's no longer a personal asset. Additionally, the eventual value of your contract is zero. So if you're trying to predict future value then you can draw a graph with the current value what it is and the end value of $0 and connect it with whatever kind of line matches your long term view of DVC resale pricing.

Another way to look at it is that it is a timeshare and is inherently worth nothing. It's a sunk cost that allows you to save money on future vacations. The fact that you could sell it is irrelevant. It all depends on how you look at it I suppose.

 

[aoconnor]

On my personal balance sheet I carry the current resale value less 8.5% for commission/ closing costs. I like seeing it on there, though as @ELMC mentioned it's really a sunk cost as far as I'm concerned since I have no intention of selling it

 

[CanadaDisney05]

On my personal balance sheet I carry the current resale value less 8.5% for commission/ closing costs. I like seeing it on there, though as @ELMC mentioned it's really a sunk cost as far as I'm concerned since I have no intention of selling it

It's not really a sunk cost, because you can always change your mind and sell it. It is still a long-term asset that will provide future value (just like money does). I personally keep my vehicles on my personal balance sheet for this reason

 

[Jerry@dvcstore]

Great question...and please feel free to email (sales@dvcstore.com) or call (800)-550-6493) our office if you need a price valuation. If you prefer to can contact me directly, my email is jerry@dvcstore.com. A price valuation is based on recent sales for the location and size of contract you own (number of points). Normally it is giving within a price range. For example, if you own Old Key West (2042 Expiration), and it is a 150 point contact, recent sales have been between $93 to $98 per point. So the value of the package (currently) would be 150 pts X $93= $13950 to 150 pts X $98 =$14700. The package could sell for more or less than these numbers quoted, but these are the average sale prices.

So Old Key West would be selling between $13,950 to $14700. If you were to sell with our company (DVCstore.com) the commission would be 8.5% and Disney's fee would be $150. The buyer would be responsible for annual dues on points they receive for the current year, and the buyer would pay the closing cost (unless you agree to something different).

The net value of the package after commission and Disney fee would be $13,300 (at $98 pp) to $12,614 (at $93pp). These amounts don't included any annual dues.

Again this is just an example, but if you need a valuation for any reason and you would like a licensed agent to provide you a written statement, please let us know and we will be happy to help you.

 

[keenercam]

Great question...and please feel free to email (sales@dvcstore.com) or call (800)-550-6493) our office if you need a price valuation. If you prefer to can contact me directly, my email is jerry@dvcstore.com. A price valuation is based on recent sales for the location and size of contract you own (number of points). Normally it is giving within a price range. For example, if you own Old Key West (2042 Expiration), and it is a 150 point contact, recent sales have been between $93 to $98 per point. So the value of the package (currently) would be 150 pts X $93= $13950 to 150 pts X $98 =$14700. The package could sell for more or less than these numbers quoted, but these are the average sale prices.

So Old Key West would be selling between $13,950 to $14700. If you were to sell with our company (DVCstore.com) the commission would be 8.5% and Disney's fee would be $150. The buyer would be responsible for annual dues on points they receive for the current year, and the buyer would pay the closing cost (unless you agree to something different).

The net value of the package after commission and Disney fee would be $13,300 (at $98 pp) to $12,614 (at $93pp). These amounts don't included any annual dues.

Again this is just an example, but if you need a valuation for any reason and you would like a licensed agent to provide you a written statement, please let us know and we will be happy to help you.

This is extremely helpful, Jerry. Thank you so much. I will be emailing you in the next week or two with some concrete questions.