Ah yes. The SUPER STRIPPED contract.

[Genie+]

You may have given the broker exactly what he expected, your honest opinion of the contract. That is valuable feedback for understanding how potential buyers are viewing resale contracts in this peculiar time.

 

[ehh]

I don't think we can answer AYTA without seeing how you replied back. It's one thing to have a logical counter-offer, but you can also totally be an ******* while delivering that logical counter-offer.

 

[RoseGold]

So tell the broker you are only interested in loaded contracts or whatever it is you actually want?

 

[WAstateDVCDaddy]

What is a "fair" offer, and why should it even matter? We are in a very complex economy right now. Your idea of a lowball offer might be next months market price. $3 below this months "lowball" offer and next months market price might be where ROFR kicks in on mass. A "fair" offer is abstract. Why should you concern yourself with it?

Are you asking the OP, or me? The OP wanted o know if they were being a “jerk”, so I think they’re concerned that the we’re presenting the broker with a ridiculously low offer, and wasting the brokers time. That seems to be a reasonable concern since they want to maintain a good relationship with their broker.

 

[Lumpy1106]

Who is paying the dues? Since you won't even be able to borrow points until December and it would be impossible to know how much you owe in Jan '24, I would say it is perfectly reasonable that you reduce the price/point by what you estimate the dues will be.
In the past you would just offer a higher $ just to pass ROFR, but in this case, what you offered seems fair to me. After all, the seller got to enjoy the vacation on all those borrowed points - that's how the contract got stripped after all.

 

[E2ME2]

Some brokers got into the flipping of contracts during the last couple of years, so they have a vested interest in keeping the prices high, especially if they stripped the contracts and rented the points. Zillow started doing this with real-estate and ended up firing the whole department because it ended up costing the company a lot of money since they were buying housing at inflated rates and then couldn't sell the properties.

I have always speculated that many brokers own/rent DVC contracts, and sell them when it's opportunistic.
I think this current market (economy) might be having an unanticipated impact on them.. ????

 

[GrumpyInPhilly]

I'm currently in the market for a stripped contract (just 2024 points and on) since I wouldn't be able to use the contract for a while. I've been offering $20 below the best deals people on here have reported for fully loaded contracts. My rationale is that I could sell the points for a net $10 pp (after 2023 maintenance fees) for each missing year if I wanted to go thru the hassle of doing so. I also don't want to get stuck with a contract that by the time I go to use it could then possibly be purchased for less. I've made several offers but no takers so as everyone has said the market definitely over-values stripped contracts.

 

[AnnaKristoff2013]

I'm currently in the market for a stripped contract (just 2024 points and on) since I wouldn't be able to use the contract for a while. I've been offering $20 below the best deals people on here have reported for fully loaded contracts. My rationale is that I could sell the points for a net $10 pp (after 2023 maintenance fees) for each missing year if I wanted to go thru the hassle of doing so. I also don't want to get stuck with a contract that by the time I go to use it could then possibly be purchased for less. I've made several offers but no takers so as everyone has said the market definitely over-values stripped contracts.

The market so overvalues stripped contracts that you are almost certainly better off buying a not-stripped contract, and then planning on renting/transferring the points (even at a steal) on disboards or at Davids.

 

[John Purcell]

This makes little sense to me. The points have a price but what interest rates are has zero connection to any of this from my view. You are seemingly treating this like an investment return instead of a consumable which DVC points essentially are.



I agree with this. Thing is while you get to the same answer I am not sure the math to get there was exactly in line with what I would be looking at.

I would view the loss of 250-500 points as $15/point. I would be offering $3750-$7500 less than what I would view as fair for a contract with points available.

I likely would pass just because points on the contract typically are so undervalued when sold. Not sure what it is today but I think I remember loaded contracts in the past were only like an extra $5-$10/point more which is a great deal to get a bunch more points.

I agree. I am thinking that the fair market value on a 250 point contract with current year points is $90ish. But being stripped $80. Being Dec use (basically 2 years), $72 sounds ok

 

[John Purcell]

So I get the email from my broker (who I adore!). We have a very healthy relationship and nice rapport. He offers me a pre offer (before it goes live): It is SSR (which is a dime/dozen these days, am I right?).

It’s a Dec use year, meh ok. But come December 2023 0 points coming. $85/pp

2024 250 (full use) coming. I told him that I would offer $3000 less because at an 8% interest rate to carry a dead weight contract it would cost me that much.

I did offer $73 on the contract as a fair market offer. If it were $100 and had a Feb use and current / banked points, I feel $85 would be fair, and I would not pay to carry an unused contract.

Between the risk of sitting for 18 months to use, and carry cost…. I want to ask if I am a jerk? Reddit AITA?

I told my broker, respectfully, that I regretted the low-ball offer. I would like to retract the offer - in due respect. I have twin 9 year old girls. Buying more points should surround my family needs, not a financial one. I’m interested in going sooner than later. I apologized for the hasty offer to try to monetize that asset, because we both, at the end of the day, want what’s best for our own life/ family. If he had well priced highly loaded contracts- I would be all ears.

All thanks for my DIS folks for chiming in!!!!!!!

 

[Doberge]

I would view the loss of 250-500 points as $15/point. I would be offering $3750-$7500 less than what I would view as fair for a contract with points available.

I likely would pass just because points on the contract typically are so undervalued when sold. Not sure what it is today but I think I remember loaded contracts in the past were only like an extra $5-$10/point more which is a great deal to get a bunch more points.

I agree with your logic and conclusions but I think you may be overinflating the value of stripped points, unless you actually value current points around $23-$24. I think of valuation of stripped points as what they'd cost to replace for one year, like if I had to rent or transfer-in. I'm conservative enough about it and value in the $17-$19 to range to replace. Considering MFs would be paid on regular points as part of the resale, I think subtracting MFs from replacement cost makes sense to me, leaving me in $7-$11 range for how much I'd reduce a stripped contract from one with current points (or thereabout). I think I would have ended up would save $73 as OP, but with a third different way of looking at it.

 

[vbflightmedic11]

I just signed on a stripped contract, nothing till 2025, but i own at two other DVC and have 3 vacations planned thru january 2024. The seller is paying for dues this year ( obviously) and giving me $ for the estimated dues for 2024. It sucks i won't be able to use points sooner, but im okay with it since ive got several trips planned. I also offered 9$ less per point than they were asking.... probably could have gone lower, but i think it turned out okay.

 

[The Jackal]

If the accepted offered price is too low. DVC will buy it back. Granted they might not be buying much back right now, but in general they try to keep resale prices at a certain point to make their product look better. Is the economy at a point which DVD can’t control the resale price? Time will tell. DVD did let some good contracts slip by in 2020.