Making low offers.

Discussion in 'Purchasing DVC' started by Dis4memom, Jan 3, 2014.

  1. Dis4memom

    Dis4memom Earning My Ears

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    So looking at the rofr data obviously some people are putting in very low offers and getting accepted by the seller' I want to be one of those people:thumbsup2


    Ok I know, so would everyone but I think I'm in a good position to try, we're looking for around 180 pts at akl but would be happy with. 160-200. We don't plan to go to disney until February 2015 but have the money to buy in now, so we don't need to buy in now but can, we can spend months making offers:surfweb: and apart from the hassle of it which to save money I certainly don't mind:confused3 seems like a fab idea. My mum already owns so realistically we could use all her points for 2015 an ours the year after so we don't have to have any for like 2 years! We don't mind a contract without points this year but will happily take them and rent or go mad in 2015:cloud9: if they come with it.
    So my question is how do we go about it, do we just put in low offers and when one gets refused move on to the next? Like literally I'm quite happy to have the listings of the main companies and just keep making offers but will they let me do that? I would never bid on more than one at a time but obviously I expect to get turned down a lot so is a broker going to be ok putting lots of offers in like that . ANyone done this before? I've read some try to dissuade saying won't pass rofr but even if it didn't it wouldn't matter to me, I'd just keep trying?
    Thoughts
     
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  3. Deb & Bill

    Deb & Bill DVC-Trivia Contest, Apr-2006: Honorable Mention

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    So you plan to waste both the agent's and the owner's time?
     
  4. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    I'd go ahead and make offers. Obviously don't make them ridiculous, and the agent may have authority to refuse a lot up front if you are going too low (i.e. if the seller says I won't consider offers below $70/pt, the broker doesn't even have to convey an offer below that). I'd come up with a price you think is reasonable based on what your research and start offering. Keep in mind that if it isn't at least partially reasonable, you are wasting your time, but don't be afraid to bid low. Some brokers will try to convince you there is no point to low offers but a legit broker conveys all offers that the seller said they will consider. When we bought our SSR earlier this year, we bid low on about 6-8 contracts before we snagged ours at $62.5/pt. I wasn't in a huge rush either. Be ready to negotiate as well. I know you say you aren't worried about ROFR but at least be mindful of it, or you really may be wasting your time. But don't be afraid to go low with your bids.
     
  5. Maverick

    Maverick Mouseketeer

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    I agree.

    There's nothing 'illegal' or technically immoral with the OP's approach. People look for the best possible deals all the time and real estate is no exception. But...

    In addition to Deb's (Bill's?) response, the reality is the few dollars you might save per point when finding that distressed seller really amounts to only 1 year worth of MF's. (Plus there is always the ROFR concern even at AKL if the price is completely low-balled.)

    Everyone attacks the resale market in their own way though. For us... Location, number of points and UY outweighed the small savings we might have achieved using a 'buy in at the cheapest cost possible' approach.

    The market may be softening slightly now, so your lower price point might be more achieveable than just a few months ago.

    Mav
     
  6. Kidanifan08

    Kidanifan08 DIS Veteran

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    You can certainly offer whatever you want. If you are $10-20 less than asking, you will get a lot of refusals, often without a counter. The brokers often know if a seller has a minimum threshold, although you have to take their word for it. To save some time, you should make your offer with a time limit -- such as a response within 48 hours. AKV contracts are widely available, but keep in mind that many of the sellers have mortgages, and they are not going to be able to drop their price very much without having to bring money (that they don't have) to the table. I doubt you would get a contract for less than $60-65/pt in the size range that you are looking at, even if it is stripped of 2014 points.

    Good luck hunting!
     
  7. Nabas

    Nabas Mouseketeer

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    Right now, AKV is probably the best resort to be making a lowball offer. Disney is still selling direct there after 7 years. It's never taken Disney that long to sell a WDW DVC.

    There are a few points to consider.

    First, some DVC brokers will not present low offers to the buyer.

    Second, all sellers are unique. One might jump at the offer while another won't bother to respond.

    Third, generally, keep within about $10/point of asking price in the current market. A year or two ago, it was a buyer's market and some really lowball offers were being accepted. However, 2013 was a seller's market and prices are up, a lot at some resorts. Things seem to be a bit more balanced right now.

    Fourth, some distressed sellers can't sell lower because they have financed their purchase.

    Fifth, stripped contracts are harder to sell. Contracts missing some or all of their current year's points are likely to have been sitting on the market for a while, making their sellers generally more willing to consider reasonable but low offers.

    Sixth, expect a lot of rejection. Take it in stride and move on to the next one.
     
  8. nd43

    nd43 Disney Fan

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    I would consider the following:

    - What can you afford?
    - What do you consider a "fair price"?
    - What does the market consider a "fair price"?

    Take the lowest answer and make an offer.

    That is me. Others might say "heck, you could get lucky and find someone that really needs to sell because of health, job loss, etc. and get a great price even lower"

    Frankly, I do not consider finding a desperate seller and giving them a low ball offer "lucky". There are two sides to every transaction. I would rather pay such a person a fair price I could afford regardless. If getting an extra $1,500 off such a seller (I really do not need - and in the end will not make a financial difference to owning DVC) makes me feel better about owning DVC, I have bigger problems. Again, just my perspective.
     
  9. bookwormde

    bookwormde <font color=darkorchid>Heading out now, another ad

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    Sure why not, I can tell you it is not a waist of time. back when sales were slow I put in a $45 offer for OKW thinking that it would not be accepted and if it did it would not pass. They are my points now. I was in no hurry.
     
  10. MiramarQE

    MiramarQE Mouseketeer

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    Don't worry about wasting agents/sellers time and offer as low as you feel is appropriate. From some of the asking prices currently being advertised, certainly the sellers are not worried about ASKING unreasonably high prices and wasting the brokers' and YOUR time.

    We have a spreadsheet model to compare various listings - as the value to YOU changes with the number of points current and in the coming year, you need some method of comparing the value to you of the various listings so you can make informed offers. $72/point for one 175 point listing may be just as valuable to you as $68/point for another depending on the number of current points and any banking/borrowing the seller may have done.

    We just went to ROFR yesterday on BWV - made offers on 5 total different listings, sometimes sellers countered, sometimes not, some times we counter-countered. We're happy with the value we're receiving relative to the ROFR data we found on this board and our model.

    Be patient - time is on you side as the market is softening a little - this may not last long, but it should last long enough for you to get a relatively good deal.
     
  11. JimMIA

    JimMIA A little Miami humor...

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    I think it's wise to keep in mind that $1 per point on a 200 point contract = $200. That's pennies in the context of what DVC will cost you over several years. You're talking about purchasing a resort that has MFs more than $1 per point EVERY YEAR higher than other resorts. I think prospective buyers should keep some perspective on what's important and what's not.

    It is possible to get a great deal by offering low. It's also possible to get shut out of a contract that would have been perfect for you. When we sold, we received one offer well below what we considered reasonable. We did not counter. That same buyer then offered $1 pp below our asking price, which was quite reasonable. We turned the offer down because we didn't think the buyer was serious. We sold it that same day to another buyer for the same price.
     
  12. a742246

    a742246 And, and, and I caught a fish this big!

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    Keep in mind if you buy a fully loaded contract you can rent the point out. That willl reduce the true costs.
    Ask the resale brokers about bankrupties they may take 6 months to resolve but they should have a much lower price.

    Good luck!
     
  13. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    Getting that kind of deal through takes work, effort and the willingness to offend some people. To me there's an art to getting the best/cheapest deal but still having a chance to get through ROFR. You want to be at the edge of possibility but not so far off that you're not taken seriously or that ROFR is a total certainty. Finding that range takes a lot of effort, time and stamina. It also means you either find someone who is desperate or target the most available difficult to sell resorts. Personally I'd go back to before VGF to get target prices for what is a "good deal". However, you have to consider your own time/effort as well as the potential savings/loss if you end up missing a given trip or two. You're likely better off putting your efforts into finding a loaded contract that's a good UY and size for you at a fair price than being the one that gets the best deal unless you're one that won't buy otherwise. IF you can find someone privately, you may be able to save some and the seller may get a better deal because you've eliminated the broker commission from the deal. Look at ebay, redweeks.com, tug2.net and craigslist as ways to hook up directly. Realize that there is a little more risk and aggravation going that route.
     
  14. Nabas

    Nabas Mouseketeer

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    I looked at sales data for November 2013. (Because of the time it takes to close on contracts, sales data typically reflects market activity from a couple of months before.)

    Median AKV sales were $78/point.

    The second lowest sale at AKV was $67/point for a 200 point contract. (The lowest seems to be an outlier.)
     
  15. bakerworld

    bakerworld DIS Veteran

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    When I first started reading these forums there was a poster who always offered $20 below asking. Admitted these offers were routinely refused but occasionally he was successful. IMO I think his 'occasionally' was overstated as he owned thousands of points - like over 8K.
     
  16. LorieDisneyLover

    LorieDisneyLover DIS Veteran

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    I don't think you are wasting anyone's time if your offer is within the price point of not being ROFR'd.

    I mean, what's the point of offering (and having accepted) a bid of $80 on BLT when that is pretty sure of being taken by Disney.

    If you have plenty of time (and it seems you do) I'd bargain away … you never know what the market has been like for any particular seller until you try.
     
  17. Splashboat

    Splashboat Always looking for cheap airfare

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    That's what we did. We bought our second contract last spring. I had a price per point I thought was fair but the resales were on the rise.
    I found one that was $10 more per point then I wanted to spend but when we rented/transferred off all the banked and current points (we already were staying at a different resort last year) we ended up getting it for about $12 less per point then I planned. (Not looking up the exact amount but that was about what it came out)
    So you really have to consider whether you are getting a loaded or stripped contract when you factor price per point.
     
  18. nabi

    nabi Home at Disney often!

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    ^^^This is an example of how loaded or stripped can help with cost. We bought a stripped (no current points, but the following year), as we weren't ready to use that contract yet. The points are there, this year, and the price for similar contracts (not stripped, though) is $20 more pp recently.
     
  19. itutorfortravel

    itutorfortravel I tutor high school math to pay for my travel addi

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    So how do you think a contract with current points should compare price wise to one that is fully loaded with all of 2013 points? Because I see two very similar contracts at the same resort and both are asking the same PPP...I'd be interested in the one with current points only, but not at the same PPP as the loaded one, yet I'm not sure how much of a PPP difference that should be?
     
  20. Dean

    Dean DIS Veteran<br><a href="http://www.wdwinfo.com/dis

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    All else equal (UY, points per year, home resort), you can figure about $10-11 per point for any point you pay maint few on or $5 plus the maint fee. For the rest it depends on how likely you are to be able to use the points. For free points you can use but not pay fees on, I'd value them at $4-5 pp. For points you likely can't use (too short notice to count on), I'd put a zero value on them. My definition of neutral on number of points would be if you bought that contract from Disney what points would you get. As a rule loaded contracts are a better value than stripped ones because owners are prepared to take what they are really worth comparatively. That means that there can easily be a $1-2K difference in value or more just on this component alone. UY also matters for many if not most and can be worth close to a years worth of points for some.
     

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