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Old 05-10-2013, 10:34 AM   #16
DougEMG
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Quote:
Originally Posted by Kidanifan08 View Post
It seems like now would be a good time for someone who is contemplating selling a contract or two to list them. The question is, how detrimental would it be to the final sale price to strip the contract before listing? Particularly for a 50-100 pointer.
If someone is looking to make the most amount of money possible selling and isn't in a hurry, then I think it make total sense to strip the contract of all points before selling it.

I would think that stripped contracts also have a better chance of passing ROFR.
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Old 05-10-2013, 10:36 AM   #17
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Originally Posted by MickeyFan612 View Post
There are more savvy, informed buyers here so probably not going to find many willing to consider severely stripped contracts, however there is a buyer out there for everything and it's just a matter of time before the right buyer comes along! As available contracts shrink daily that time is coming much sooner than expected!!
Totally agree. 1-2 years ago we were all looking how best to make a low-ball offer, it's now turned into sellers placing high-ball listing !
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Old 05-10-2013, 10:37 AM   #18
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I really think it depends on everyones personal situation and what they're looking for. We've been saving for years & weren't going to buy until next year but as soon as we found about Disney prices going up direct, we decided to jump in now. We were going anyway later this year and my parents wanted to go on this trip too, so we wanted something with banked points, so we needed to find something with banked for enough points to get 2 rooms. Our contract closed Monday
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Old 05-10-2013, 10:48 AM   #19
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Originally Posted by DougEMG View Post
If someone is looking to make the most amount of money possible selling and isn't in a hurry, then I think it make total sense to strip the contract of all points before selling it.

I would think that stripped contracts also have a better chance of passing ROFR.
Isn't it interesting that some of the agents also rent points?
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Old 05-10-2013, 11:26 AM   #20
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Originally Posted by MousekeTom View Post
Isn't it interesting that some of the agents also rent points?
Interesting, but I don't see anything devious about it. It's the broker's job to maximize return for their client. Even if brokers are advising sellers to rent points and then sell, are they somehow doing a disservice to any of the parties involved?

It's also worth nothing that all pending reservations are cancelled when a transfer of ownership occurs. In a true rental, the owner may be forced to hold onto a contract for up to 11 months until the rented stay has been completed. So renting before selling isn't going to work for all parties.
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Old 05-10-2013, 11:40 AM   #21
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Interesting, but I don't see anything devious about it. It's the broker's job to maximize return for their client. Even if brokers are advising sellers to rent points and then sell, are they somehow doing a disservice to any of the parties involved?

It's also worth nothing that all pending reservations are cancelled when a transfer of ownership occurs. In a true rental, the owner may be forced to hold onto a contract for up to 11 months until the rented stay has been completed. So renting before selling isn't going to work for all parties.
Good thing I didn't say devious. That would be slanderous.
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Old 05-10-2013, 11:41 AM   #22
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Originally Posted by DougEMG View Post


I would think that stripped contracts also have a better chance of passing ROFR.
If you look at the ROFR data, most was loaded or very low priced or both, so agree with the point.
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Old 05-10-2013, 01:53 PM   #23
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Originally Posted by z28wiz View Post
You wouldn't be paying membership fees on stripped contracts the seller is liable for them and at closing you receive a credit for all used points
Is this an industry standard or a clause to add into the offer? There are listings with no points until 2015, but advertised as "no dues until 2014".
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Old 05-10-2013, 04:20 PM   #24
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I have a March UY and was happy to buy a contract that had no 2013 points as it had all the 2014. I didn't want the hassle of renting my points out and didn't want to pay mfs for points that I wouldn't use. I was planning ahead for trips for the next few years and knew what I needed.

However if I had a later UY or no points until 2015 I wouldn't have been interested.
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Old 05-10-2013, 04:46 PM   #25
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small size

What has struck me lately is the number of contracts available with a small number of points. I've seen a bunch of BWV and BCV contracts with 100 points or less. I've been watching on and off since 2009, and I don't recall ever seeing as many small point contracts for those resorts as there are these days.

There may be people who really want to buy a 25 or a 40 point contract, and they don't need the points this year, so they don't care if it's stripped.
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Old 05-10-2013, 04:51 PM   #26
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No points for 2013. No MF is a plus. Cost pp would still have to be $5-10 less pp depending upon UY. Offered more than asking (premium) for small loaded contract recently. If it was stripped, I certainly would not have offered such or made an offer at all.
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Old 05-10-2013, 06:44 PM   #27
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Originally Posted by NoleFan View Post
Yes, I would factor in the cost of buying the missing # points (via transfer purchase) at around $12/pp. It would also have to be for a contract with a # points & resort that is very rarely available to go through the added work. Good news is those contracts probably have a better chance of passing ROFR.
So, if the contract is loaded, do you offer the owner about $12 a point more for the extra points?

And the extra years still available (like 40 more years) are also worth $12 a point more?

Bad logic on your part.
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Old 05-10-2013, 06:56 PM   #28
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Originally Posted by cvjw View Post
I am selling a stripped 150 point SSR contract right now. We purposely used our 2013 points before listing it. We bought the contract loaded a few years back for $65 and are selling it stripped for $58. We actually listed right before the price increase was announced by Disney, so we could possibly have sold for a little more if we had waited a few weeks. Oh, and we had a buyer within days of listing the contract - it does seem to be a seller's market right now.
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Originally Posted by jcf View Post
I have sold several small BLT contracts < 100 points for $100-104 with no points until 2014 in the last 3 months...Disney passed on all of them.
This is very interesting insight from recent sellers. I would think that the seller who is not in a hurry could price it big and then see what comes along. If there is no hurry, or real need to get rid of the points, the seller can definitely hold out for maximum return.

Quote:
Originally Posted by brertoad View Post
I personally wouldn't buy a stripped contract. I wouldn't want to pay MF for 1-2 years before it is usable. If I were to consider it, I would deduct at least $8-9 per point off the normal asking price per year of it being stripped, i.e. 2013 and 2014. Plus seller would have to pay MF for those years as well. I've read that DVD doesn't like when the seller pays the MF, so if I was worried about that, I'd want to change the price to compensate for the MF.
Once you start taking away $$ for the used up points and the MF, you may be bringing the contract into ROFR territory.

Right now, there are a lot less contracts for sale. The market is different now than it was last year, and the resale prices have ticked up at least $10 pp. I guess this is a seller's market.
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Originally Posted by z28wiz View Post
You wouldn't be paying membership fees on stripped contracts the seller is liable for them and at closing you receive a credit for all used points
Quote:
Originally Posted by nalajms View Post
Is this an industry standard or a clause to add into the offer? There are listings with no points until 2015, but advertised as "no dues until 2014".
I think the terms of the sale are negotiable, but I agree, if there were no 2014 points, I would make the seller pay the MF's based on 2013 fees (at least) or negotiate a lower price. They could even pay closing costs as a surrogate to 2014 fees, depending on the size of the contract. I am not so sure that sellers of small contracts are going to be willing to go very low, as I suspect most of the small contracts are being sold by owners who have time to wait for something close to their asking price. The 160+ point contracts are a different beast --- there are probably still a large number of people who need to sell and may be more willing to go a little lower just to get out from their commitment.

Quote:
Originally Posted by dbs1228 View Post
Stripped contracts have not been being taken back - it is not in Disney's best interest to buy back a contract even at a low price and have to have it sit for a year or two and hope they have a buyer. They cannot resell a contract until the points are there.
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Originally Posted by lovin'fl View Post
I am currently in ROFR on a 50 points HH contract that has no points until 2014. I am paying full asking price, $60. It has my UY and I did not want to go direct and pay the mouse $115/point. The sellers are paying 2013 mf and 1/2 of closing (and being HH, closing is $650...so it's like I am paying $53.50). We only wanted 25-75 points at HH with our UY...so that's why I jumped on this stripped contract. And we aren't going to HH until Aug 2014, so couldn't use 2012 points anyway (could have used 2013 points, but will have just enough with my current HH points and these new 2014 points).
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Originally Posted by Kwaschitz View Post
I don't know that it would *hurt* since almost everything is stripped right now. That said, the stripped contracts are the primary reason that I'm not arguing for resale with my husband who only wants to buy direct.
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Originally Posted by bakerworld View Post
Plus aren't stripped contracts more likely to make it past ROFR?
Quote:
Originally Posted by kkolbusz1 View Post
I really think it depends on everyones personal situation and what they're looking for. We've been saving for years & weren't going to buy until next year but as soon as we found about Disney prices going up direct, we decided to jump in now. We were going anyway later this year and my parents wanted to go on this trip too, so we wanted something with banked points, so we needed to find something with banked for enough points to get 2 rooms. Our contract closed Monday
Quote:
Originally Posted by Meggysmum View Post
I have a March UY and was happy to buy a contract that had no 2013 points as it had all the 2014. I didn't want the hassle of renting my points out and didn't want to pay mfs for points that I wouldn't use. I was planning ahead for trips for the next few years and knew what I needed.

However if I had a later UY or no points until 2015 I wouldn't have been interested.
The appeal of a contract definitely seems to depend on the stage of the buyer. People who do not already own are almost certainly looking for a loaded contract, or at least something with current points. On the other hand, those who are already in the game may just be looking to enhance their DVC portfolio and UY and point amounts become a more important variable in what they are looking for. As evidenced above, those buyers may be fine with a contract that does not have past or current points, as long as it lines up with their portfolio. In fact, it may be desirable, if they can escape paying current (2013) UY MF's. Some buyers may see a stripped contract as a sure thing to owning those points and may be more willing to take it on if they know they will be "in"

Quote:
Originally Posted by tjkraz View Post
Stripping a contract before resale has always been the best approach for maximizing return.

Even if we use a lowball figure like $10 per point, you could get $30 per point by transferring banked, current and borrowed points.

Never has the price gap between identical "loaded" and "stripped" resale contracts equaled that $30 rental return. It's not just a function of today's resale marketplace. Historically sellers could always make out better renting as many points as possible and then dumping the contract.

That said, I'm sure a loaded contract is much easier to sell. Given the way things are selling today, it wouldn't surprise me if a larger percentage of contracts still unsold are stripped.

If $70 is the going rate for a loaded SSR contract, the seller of a stripped contract simply will not have to discount to $40pp.
Quote:
Originally Posted by DougEMG View Post
If someone is looking to make the most amount of money possible selling and isn't in a hurry, then I think it make total sense to strip the contract of all points before selling it.

I would think that stripped contracts also have a better chance of passing ROFR.
This is what I was thinking. For the seller who does not really need to sell, why not use up the available value of the contract and then sell. Although, I didn't think banked or borrowed points were eligible for transfer. I guess you could transfer next UY points to another contract with then next UY. But I cannot figure out how banked points could be used up before selling, other than with a short-term reservation. I am sure that stripped contracts more easily pass ROFR. Although, I am not sure how that is any advantage to the seller.

Quote:
Originally Posted by Best Aunt View Post
What has struck me lately is the number of contracts available with a small number of points. I've seen a bunch of BWV and BCV contracts with 100 points or less. I've been watching on and off since 2009, and I don't recall ever seeing as many small point contracts for those resorts as there are these days.

There may be people who really want to buy a 25 or a 40 point contract, and they don't need the points this year, so they don't care if it's stripped.
Quote:
Originally Posted by NoleFan View Post
No points for 2013. No MF is a plus. Cost pp would still have to be $5-10 less pp depending upon UY. Offered more than asking (premium) for small loaded contract recently. If it was stripped, I certainly would not have offered such or made an offer at all.
You wonder if some folks with a lot of points across multiple contracts are coming out of the woodwork to sell while it is a sellers market. And again, I agree, that no current year MF's is a plus for reducing the overall cash layout.

I am enjoying hearing the opinions of the experts here on the boards. I do think there are less sophisticated resale buyers out there who don't think about all of these permutations and are just looking for the right-sized contract to add to their portfolio and see any resale price as a better option than adding on direct.
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Old 05-10-2013, 06:59 PM   #29
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Originally Posted by NoleFan View Post
No points for 2013. No MF is a plus. Cost pp would still have to be $5-10 less pp depending upon UY. Offered more than asking (premium) for small loaded contract recently. If it was stripped, I certainly would not have offered such or made an offer at all.
Quote:
Originally Posted by Deb & Bill View Post
So, if the contract is loaded, do you offer the owner about $12 a point more for the extra points?

And the extra years still available (like 40 more years) are also worth $12 a point more?

Bad logic on your part.
Great point, Deb. The buyer never considers added compensation for the "loaded" or later expiration date contract; only reduction for the stripped one. In this sellers market, there probably needs to be some new math.
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Old 05-10-2013, 07:10 PM   #30
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So, if the contract is loaded, do you offer the owner about $12 a point more for the extra points?

And the extra years still available (like 40 more years) are also worth $12 a point more?

Bad logic on your part.
I would not offer $12 more pp. factor in about $5-$6 pp MF & $5 pp differential between stripped vs. loaded. I would not pay the same price pp for a stripped vs. loaded contract. If I had to buy 100 points via transfer, it would cost around $10-$12 pp ($5-$6 mf + $5 discount for stripped contract). That's the math on the approx. $12

Same resort, same contract size
ie. stripped $70pp NO MF
loaded $75pp +MF

Last edited by NoleFan; 05-10-2013 at 07:32 PM.
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