How is this contract possible?

[AllieV]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead? It also can't close until much, much later this year.

This is an epcot resort DVC priced at 70 (average). I'm not even sure how to price this. If I had points from even '12 and '13, I could at least sell them at $10 a point and drop the price (my out of pocket anyway) by $20 per point. I'm not sure that offering $20 less per point (at $50) would pass ROFR at this resort, though.

Ideally, I was looking for a stripped contract (or ask the sellers to sell off the loaded points to put $ in their pocket). I truly can't be bothered to sell or rent off the points to reimburse myself. I'd rather get a stripped, cheap contract. This one is throwing me, though. With 100 points, I'd have to use two or three years to do anything. That means I couldn't vacation with this until 2015.

So what do you think? What's its deal?

 

[Dean]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead? It also can't close until much, much later this year.

This is an epcot resort DVC priced at 70 (average). I'm not even sure how to price this. If I had points from even '12 and '13, I could at least sell them at $10 a point and drop the price (my out of pocket anyway) by $20 per point. I'm not sure that offering $20 less per point (at $50) would pass ROFR at this resort, though.

Ideally, I was looking for a stripped contract (or ask the sellers to sell off the loaded points to put $ in their pocket). I truly can't be bothered to sell or rent off the points to reimburse myself. I'd rather get a stripped, cheap contract. This one is throwing me, though. With 100 points, I'd have to use two or three years to do anything. That means I couldn't vacation with this until 2015.

So what do you think? What's its deal?

I wonder if they used the points for a cruise. However, if they did, the cruise or other cash type exchange option, would be canceled if it occurred after closing. It is my opinion that a severely stripped contract is generally not cheap enough to make up the difference. With such a contract you'd need a reduction of around $30 a point between maint fee adjustments and lost points compared to one that had all points available. That might occur in the form of the seller not reimbursing for the current years points plus a price adjustment. Just fees alone would be a $17 a point difference without placing any value on the lost points themselves. I wouldn't touch it personally given that most sellers aren't realistic and most brokers (esp those that specialize in DVC) are reluctant to let things like this sell for the appropriate price. If you're looking at stripped assuming you'll get a better deal, often it's actually the other way. You might be better off getting a non stripped or loaded smaller contract even if not going for a year or more.

 

[Best Aunt]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead?

We just got back from a trip to Disney World. I used my 2011 points (banked), my 2012 points and my 2013 points (borrowed) to put my nieces and their parents in a 2-bedroom.

That's why I'm the Best Aunt in the world.

So if I were to sell my contract today, there wouldn't be any points available until 2014.

Not that I would sell my contract.

 

[ELMC]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead? It also can't close until much, much later this year.

This is an epcot resort DVC priced at 70 (average). I'm not even sure how to price this. If I had points from even '12 and '13, I could at least sell them at $10 a point and drop the price (my out of pocket anyway) by $20 per point. I'm not sure that offering $20 less per point (at $50) would pass ROFR at this resort, though.

Ideally, I was looking for a stripped contract (or ask the sellers to sell off the loaded points to put $ in their pocket). I truly can't be bothered to sell or rent off the points to reimburse myself. I'd rather get a stripped, cheap contract. This one is throwing me, though. With 100 points, I'd have to use two or three years to do anything. That means I couldn't vacation with this until 2015.

So what do you think? What's its deal?

You really can't value the contract, because no seller will accept what the contract is really worth. Someone will come along who already owns at that resort, who has that use year, who isn't planning a vacation for a few years anyway, and they will pay a bit of a premium to get a contract that meets their needs. It's a specialty contract, and it doesn't seem like it's right for you. But the good news is....you're not missing anything. It is what it is.

 

[Dean]

We just got back from a trip to Disney World. I used my 2011 points (banked), my 2012 points and my 2013 points (borrowed) to put my nieces and their parents in a 2-bedroom.

That's why I'm the Best Aunt in the world.

So if I were to sell my contract today, there wouldn't be any points available until 2014.

Not that I would sell my contract.

You must have a UY that is already in 2012 to do this. From my understanding of the OP, this contract is still in the 2011 UY. My understanding is that the only way to borrow this far ahead (more than 1 additional UY) is for a cash option that will book that far out, like DCL. Now it's possible that some of the info isn't correct and that the available points actually start a year earlier or the UY has already started, this would change the situation dramatically.

 

[MousekeTom]

Someone will come along who already owns at that resort, who has that use year, who isn't planning a vacation for a few years anyway, and they will pay a bit of a premium to get a contract that meets their needs. ... It is what it is.

I think you are half way there. "Everything has a price." The buyer just has to figure out what that price is for him/her. The seller and realtor are probably hoping somebody doesn't spend time thinking about it. There is no reason to pay a "premium".

 

[permavac]

You must have a UY that is already in 2012 to do this. From my understanding of the OP, this contract is still in the 2011 UY. My understanding is that the only way to borrow this far ahead (more than 1 additional UY) is for a cash option that will book that far out, like DCL. Now it's possible that some of the info isn't correct and that the available points actually start a year earlier or the UY has already started, this would change the situation dramatically.

You might have missed that the OP also said "It also can't close until much, much later this year." My assumption is that the current owner has a reservation after the beginning of their 2012 use year start. If that were the case then the points could all be used.

Terri

 

[ELMC]

I think you are half way there. "Everything has a price." The buyer just has to figure out what that price is for him/her. The seller and realtor are probably hoping somebody doesn't spend time thinking about it. There is no reason to pay a "premium".

True. To clarify, when I say "premium" I mean the amount that is more than what the actual contract is worth (even if it sells for less than what other, loaded contracts are selling for).

 

[Dean]

You might have missed that the OP also said "It also can't close until much, much later this year." My assumption is that the current owner has a reservation after the beginning of their 2012 use year start. If that were the case then the points could all be used.

Terri

You are correct, did not see that portion. If the trip is in 2012 UY it would also be able to use 2013 points. However, that means the points aren't currently gone, only tied up at present.

 

[AllieV]

OP here. It's a fall UY, so I can't figure out how they took the 2013 points when the 2012 UY hasn't yet arrived. And the close is a month later than the UY arrives. Right now they can only borrow 2012 and use 2011 (maybe even banked 2010). The only thing I can figure is that they booked something at the end of the UY with one reservation (using 2011 and borrowed 2012) then booked another back-to-back reservation in the new 2012 UY by borrowing 2013 right then.

But I think you are all right. What it should truly sell for would never be considered. They are looking for someone that doesn't own a calculator.

 

[ELMC]

OP here. It's a fall UY, so I can't figure out how they took the 2013 points when the 2012 UY hasn't yet arrived. And the close is a month later than the UY arrives. Right now they can only borrow 2012 and use 2011 (maybe even banked 2010). The only thing I can figure is that they booked something at the end of the UY with one reservation (using 2011 and borrowed 2012) then booked another back-to-back reservation in the new 2012 UY by borrowing 2013 right then.

But I think you are all right. What it should truly sell for would never be considered. They are looking for someone that doesn't own a calculator.

Is there a possibility that it is a typo?

 

[Missyrose]

OP here. It's a fall UY, so I can't figure out how they took the 2013 points when the 2012 UY hasn't yet arrived. And the close is a month later than the UY arrives. Right now they can only borrow 2012 and use 2011 (maybe even banked 2010). The only thing I can figure is that they booked something at the end of the UY with one reservation (using 2011 and borrowed 2012) then booked another back-to-back reservation in the new 2012 UY by borrowing 2013 right then.

But I think you are all right. What it should truly sell for would never be considered. They are looking for someone that doesn't own a calculator.

It just means that they have a trip booked in their 2012 UY. For instance, if it is a September UY and they're taking an October trip, then they could use banked points from 2011, current points from 2012 and borrowed points from 2013.

You don't have to wait for the UY to begin to make a reservation for a trip like that.

 

[cc_nike]

It just means that they have a trip booked in their 2012 UY. For instance, if it is a September UY and they're taking an October trip, then they could use banked points from 2011, current points from 2012 and borrowed points from 2013.

You don't have to wait for the UY to begin to make a reservation for a trip like that.

That is it exactly!

 

[KAT4DISNEY]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead? It also can't close until much, much later this year.

This is an epcot resort DVC priced at 70 (average). I'm not even sure how to price this. If I had points from even '12 and '13, I could at least sell them at $10 a point and drop the price (my out of pocket anyway) by $20 per point. I'm not sure that offering $20 less per point (at $50) would pass ROFR at this resort, though.

That's easy. I've borrowed into my 2013 points in my Oct UY - and could of course borrow all of them. The closing late this year is the key in that they have a trip booked that is using the borrowed 2013 points.

I think it's difficult to have a 1 to 1 ratio in calculating what you could rent points for in a contract that had all it's current points to what a seller will be willing to accept. If they feel that the would get $20 less per point in another year or two then they might agree but if they feel the resale market won't adjust that much then they won't. A very general way most people value when purchasing would be dividing the cost by the remaining years. Ignoring a few other factors the avg yearly cost of buying BLT direct right now would be slightly over $3/year/pt ($145/48 years remaining). Most of the 2042 resorts are more in the range of $2.17/year/pt ($65/30 years remaining), or less.

Then it's finding a point that the buyer and seller can agree upon based on their wants/needs. If a seller thinks the resale market will hold up ok they might just be feeling the waters but ready to hold until they have points available and still sell for $60-$65 in another year or two. Or they may just be done and would accept lower. Then you need to decide what it's worth to you. If you don't need points might you might be better off waiting and seeing if resale prices drop a significant amount? Or try and work a great deal with the seller and recognize that if they accept you might run into a problem with ROFR since DVC has picked up the activity with it.

 

[DougEMG]

I saw a contract for sale with a late-in-the-year UY. There are no 2011 points, no 2012 points, and no 2013 points. It says there are no points until late 2014. How is it possible to borrow that far ahead? It also can't close until much, much later this year.

This is an epcot resort DVC priced at 70 (average). I'm not even sure how to price this. If I had points from even '12 and '13, I could at least sell them at $10 a point and drop the price (my out of pocket anyway) by $20 per point. I'm not sure that offering $20 less per point (at $50) would pass ROFR at this resort, though.

Ideally, I was looking for a stripped contract (or ask the sellers to sell off the loaded points to put $ in their pocket). I truly can't be bothered to sell or rent off the points to reimburse myself. I'd rather get a stripped, cheap contract. This one is throwing me, though. With 100 points, I'd have to use two or three years to do anything. That means I couldn't vacation with this until 2015.

So what do you think? What's its deal?

This is a great deal for the seller...anyone buying this ( I'll assume this is for BCV) has to be pretty desperate to buy this and is getting a crappy deal. $50/point is the most I would offer. Other than the time with making the offer and waiting for ROFR it isn't going to cost you anything. Besides Disney couldn't sell this contract to 2014, so why would they want it.

Just read on a seperate thread here that Disney ROFR'd a stripped BWV contract

 

[MousekeTom]

...Or try and work a great deal with the seller and recognize that if they accept you might run into a problem with ROFR since DVC has picked up the activity with it.

What would really interest me is to see what value a contract like this might have to Disney. Assuming you could negotiate a great price for this contract, would they ROFR a bargain price if they don't have access to the points for two years?

I took this approach on a couple stripped contracts but never got the price I was looking for.

 

[KAT4DISNEY]

What would really interest me is to see what value a contract like this might have to Disney. Assuming you could negotiate a great price for this contract, would they ROFR a bargain price if they don't have access to the points for two years?

I took this approach on a couple stripped contracts but never got the price I was looking for.

I've never thought that DVC gets held to specific points with a specific contract. With their own inventory and ability to break up contracts I just think it's different although I have no inside knowledge to back that up - it's just a supposition. When we were first buying DVC was ROFRing just as many stripped contracts as others.

 

[pmaurer74]

I wonder if they used the points for a cruise. However, if they did, the cruise or other cash type exchange option, would be canceled if it occurred after closing. It is my opinion that a severely stripped contract is generally not cheap enough to make up the difference. With such a contract you'd need a reduction of around $30 a point between maint fee adjustments and lost points compared to one that had all points available. That might occur in the form of the seller not reimbursing for the current years points plus a price adjustment. Just fees alone would be a $17 a point difference without placing any value on the lost points themselves. I wouldn't touch it personally given that most sellers aren't realistic and most brokers (esp those that specialize in DVC) are reluctant to let things like this sell for the appropriate price. If you're looking at stripped assuming you'll get a better deal, often it's actually the other way. You might be better off getting a non stripped or loaded smaller contract even if not going for a year or more.

I once saw a loaded contract that I could have rented the banked points and current points and paid for half of the initial price... I was so tempted but it disappeared within a few hours of posting so I am assuming someone else thought it was a good deal too!

 

[AllieV]

$50/point is the most I would offer.

That's exactly where my head was. But if the person is putting it up for sale six months prior to a trip they're taking with those points, I'm guessing they dont' care when it sells. They're willing to wait all year.

 

[DougEMG]

I once saw a loaded contract that I could have rented the banked points and current points and paid for half of the initial price... I was so tempted but it disappeared within a few hours of posting so I am assuming someone else thought it was a good deal too!

I only look for these types of contracts