DVC Closing Process – Disney Vacation Club

Closing a resale DVC contract…

One of the differences in between buying resale and buying directly from Disney is the time it takes to close on a contract. When you buy directly you can expect to take delivery of the points within a couple of closing.

However, when you buy resale points the timeline until delivery is typically between 2-4 months.  Regardless of which broker or title company you are using, there is no way to expedite it.

The process….

I’m going to use the terms “title company”, “closing company”, and “escrow company” interchangeably going forward. There is a technical difference, but for our purposes they are one in the same.

Step 1.)

Buyer and seller sign a sales agreement. This stipulates the conditions of the sale including price, membership specifics, reimbursement/non-reimbursement of current dues or next year’s dues, closing costs assignment, security deposit, etc. Essentially all the terms of the deal.

The signed contract gets sent to the closing company, and they forward it on to Disney for a Right of First Refusal (ROFR) review.  Disney has 30 days to review the contract terms and decide if it would like to step in as the buyer. This is true for every DVC resale, no exceptions. During this review, if they find that any of the contract terms are unclear or incorrect the contract will be sent back to be amended. This offers the buyer a free layer of protection.

If Disney decides to pass on the contract, they will send a waiver of their ROFR to the closing company to be recorded.

Step 2.)

The closing company requests an estoppel certificate from Disney. Estoppel is when Disney reviews the membership and checks to see if there are any outstanding debts against the contract, if the points match, if there are any reservations pending, if there are any dues owed, that the seller has the right to sell the property, etc.  This can take up to 30 days.

Step 3.)

Assuming you opted in for a title insurance policy (they are optional and generally make up about $150 of the total closing costs), your closing company runs a title search on the property. This can take 1-4 days.

Step 4.)

Once the closing company receives the estoppel certificate, it is time for the buyer to send in the remaining balance, and the seller to send in a notarized signed deed. The transaction will then be recorded, and the final documents sent to Disney. This can be done ahead of time while waiting for estoppel, and would shave some time off the process. This can involve a foreign seller which typically have a more difficult time scheduling a Notary Public to stamp their deed and take weeks.

Step 5.)

Disney processes the signed, notarized, and recorded deed and then transfers the membership. If you are already a DVC member you can expect to receive your points within 5-7 business days. If you are new to DVC, it generally will take 2-3 weeks.

Odds, ends, tips…

  • Manage your expectations. You’re excited to have finally made a decision on a contract to buy. Maybe you’re having nightmares that Disney is going to swoop in and snatch your deal on the 30th day (it happens) leaving you empty handed after all that waiting. Relax and anticipate the process taking 2-3 months. It’s pretty straightforward, and your closing company does all the work for you.
  • Send in your security deposit ASAP. The sooner the closing company receives it, the sooner they can send your contract for ROFR review.
  • If the seller is foreign, expect the closing to take at least 3 weeks longer. First, post has a longer travel time. Second, documents have to be notarized, and Notary Publics are not available at every bank in foreign countries like they are in the US. Generally, the foreign seller will need to schedule an appointment to meet with one, and that can take a couple days or a couple weeks.
  • If you are the buyer, make sure that there is a penalty in your contract for missing points. There is a few week window where the seller will have access to the contract after the recording but before Disney makes the official membership transfer (Step 5). In this window, technically the seller of the points could transfer points to RCI or another member… i.e., effectively, steal them. Disney will not be able to get them back, and you will not be refunded. That said, your closing company should hold the funds in escrow until the buyer has taken possession of the membership. In this case, the closing company would simply deduct the penalty for missing points from the sales proceeds, and refund the buyer.