Stripping . . . everyone's doin' it!

Discussion in 'Purchasing DVC' started by Kidanifan08, May 9, 2013.

  1. Kidanifan08

    Kidanifan08 DIS Veteran

    Joined:
    Feb 22, 2011
    Messages:
    1,757
    Looking at the currently available contracts on the popular resale websites, it appears that few have a full compliment of current year points or any at all in many cases. There is even a smattering of contracts that don't have any points until 2015! And yet, the listing prices are not much lower than a year ago when there were more "loaded" contracts, and in many cases the list prices are higher.

    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.

    For example, if someone had more than one UY, they could transfer the current UY points of the contract they are thinking of selling to their other contract and turn around and sell the newly stripped contract. Or one could even sell the points for a transfer before listing the contract. In the current market, it seems like that would do very little to the planned list price. This seems particularly true for contracts of 100 points or less, which usually command a premium. It probably depends on the home resort, but for small contracts, it may not matter. I'm thinking maybe $4-8 per point less than before stripping.

    How do you DIS'ers think that purposely stripping a contract would impact the price per point?

    ETA: I am interested in responses about stripping 2013 points, primarily. Also the impact it would have on small vs. large contracts.
     
  2. Avatar

    DIS Sponsor The Official Ticket Center is Orlando’s #1 discount attraction ticket agency, selling millions of Walt Disney tickets around the world.



    to hide this adverts.
  3. NoleFan

    NoleFan DIS Veteran

    Joined:
    Mar 30, 2013
    Messages:
    726
    No points until 2015, no thank you. I don't care what the price point, resort, etc. is.
     
  4. Kidanifan08

    Kidanifan08 DIS Veteran

    Joined:
    Feb 22, 2011
    Messages:
    1,757
    I have to agree with this. Let's just say that the seller strips the 2013 points, but 2014 forward are available. Would having no 2013 points have much impact on the asking price of a contract in the current market - particularly a small contract?
     
  5. MickeyFan612

    MickeyFan612 Mouseketeer DVC Gold

    Joined:
    Jun 27, 2011
    Messages:
    438
    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!!
     
  6. dbs1228

    dbs1228 DIS Veteran

    Joined:
    Feb 24, 2010
    Messages:
    2,159
    For me the asking price would be effected (as a buyer) if no 2013 were available - others it would not. Of course I may not end up with a contract anytime soon :rotfl2: Two months ago I had a contract taken 222 all 2013 points forward BWV 55.00PP right now I have a 200 point BWV all 2011 points forward in ROFR 65.00PP which I consider a better deal then the 222 point contract since it is coming with 200 points and 400 in Oct. - not sure it will pass but that is my comfort zone.

    The contracts that do not have points until late 2014 or 2015 I would rather wait and see what the market does since there are no points anyway, also better contracts could come along in the mean time (even if its a higher price if it comes with banked points I can rent them out and lower my price by 12.00PP - why lay out funds for something you cannot use or rent out for a year to year and a half!
     
  7. NoleFan

    NoleFan DIS Veteran

    Joined:
    Mar 30, 2013
    Messages:
    726
    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.
     
  8. cvjw

    cvjw DIS Veteran

    Joined:
    Dec 22, 2005
    Messages:
    3,330
    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.
     
  9. Kwaschitz

    Kwaschitz Mouseketeer

    Joined:
    Jul 7, 2011
    Messages:
    341
    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.
     
  10. brertoad

    brertoad DIS Veteran

    Joined:
    Mar 22, 2012
    Messages:
    850
    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.
     
  11. z28wiz

    z28wiz DIS Veteran DVC Gold

    Joined:
    Feb 6, 2003
    Messages:
    747
    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
     
  12. bakerworld

    bakerworld DIS Veteran

    Joined:
    May 24, 2010
    Messages:
    748
    Plus aren't stripped contracts more likely to make it past ROFR?
     
  13. lovin'fl

    lovin'fl DIS Veteran

    Joined:
    Jun 7, 2011
    Messages:
    4,188
    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).
     
  14. dbs1228

    dbs1228 DIS Veteran

    Joined:
    Feb 24, 2010
    Messages:
    2,159
    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.
     
  15. jcf

    jcf DIS Veteran

    Joined:
    Jun 11, 2005
    Messages:
    770
    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.

    I may add-on a small contract from GF :)
     
  16. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

    Joined:
    Feb 4, 2002
    Messages:
    13,309
    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.
     
  17. DougEMG

    DougEMG DIS Veteran

    Joined:
    Aug 14, 2008
    Messages:
    1,832
    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.
     
  18. DougEMG

    DougEMG DIS Veteran

    Joined:
    Aug 14, 2008
    Messages:
    1,832
    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 !
     
  19. kkolbusz1

    kkolbusz1 Mouseketeer

    Joined:
    Mar 10, 2013
    Messages:
    194
    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 :)
     
  20. MousekeTom

    MousekeTom Earning My Ears

    Joined:
    Feb 23, 2012
    Messages:
    55
    Isn't it interesting that some of the agents also rent points? :scratchin
     
  21. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

    Joined:
    Feb 4, 2002
    Messages:
    13,309
    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.
     

Share This Page