Buying Resale - What Price to Offer

[JOC]

For those of you who have bought resale (and assuming you didn't pay asking price), what do you think would be a fair price to offer per point? I know there are factors that come into play like whether there are banked points or not, but I'd like to make sure I'm not "underbidding" or, on the other end of the spectrum, "overpaying."

 

[tiberius]

I, also, have been wondering this lately as I look for the right resale opportunity. I would be interested to gather any insight past resale buyers care to share about this.

 

[kem330]

It really depends on the contract- if the points are stripped i think its fair to make a low offer- you'll get a lot of opinions what that $ amount may be. I would say in the low 60's given Disney's right of first refusal. For a complete point available contract, $64- 66 is not unreasonable. You can also negotiate other aspects such as who will pay current years dues and closing costs to bring the overall price down. A lot also depends on when the seller purchased and how desparate they are.

 

[crisi]

It also depends on how quickly you are interested in getting your hands on a contract. Offering low may create a counter offer you are agreeable with, or it may not. The seller of the contract you are interested in may have a firm price - or may be willing to negotiate. The only thing offering lower than the asking price costs you is time - but sometimes we are too impatient to wait.

I even lost one contract offering the asking price! The seller decided not to sell after all.

 

[robinb]

It took me months to find just the right contract at just the right price. I had a couple of rejected offers along the way . No biggie. I really wanted a contract at BWV with a use year after April that had banked points. I was pretty flexible with the size of the contract. In April 2002, I ended up a 200 point contract with 100 banked points for $62 pp, $4 more than the Disney buy-back price and $6 less than what the contract was listed at. The day after the offer was accepted, Disney raised their buy-back to what I had offered!

What I know now that I didn't know then is that I could have told the the resale realtor to start at a certain price and to increase to another price if that offer was rejected. The realtor cannot (by law) tell the seller that the buyer would be willing to offer more, the same as they can't tell the buyer that the seller will accept less. So, you can really make 2 (or more) offers at the same time for the same contract.

You really need to take a lot into consideration when determining the "real" price of a resale. You need to add the value of banked points, subtract the value of borrowed points and subtract the cost of closing costs. Then, you can compare the price to that of buying from Disney.

 

[BuzzLightYear3]

We just bought a stripped (very few points available until 2004) 220 point contract for BWV w/April Use year. We paid $62/point which the TimeShare Store told us was the lowest Disney would allow before buying back a stripped contract. Since it was stripped though, we indicated the seller would have to pay all closing fees and 2003 maintenance. Offer was accepted. Deed was recorded Jan. 17.

Worked out great for us. We really wanted an April use year as we have other BWV points with an April Use year, and we didn't need the points until 2004 anyway. (We would have thought of something to do with the points if we had them of course, but we're happy to have the contract in hand.) Most important thing to us was to have it by July 2003 so that we could make Std View ressies for our June 2004 vacation.

 

[rae519]

Our resale contract had the deed recorded on January 17th also!

Now we have points at both H H and VWL!
Looking at VB right now!!!!!

Rae

 

[nevertez]

Good info exactly what I was looking for

 

[JimMIA]

I think people often get contract pricing backwards in their eagerness to get a "great deal."

The only important number in a resale is the price that will clear ROFR. If you don't get past ROFR, the price doesn't matter, because you lose the contract to Disney -- they got the "great deal," not you.

That price may be at the offering price, and it is often above the offering price. It is seldom below the offering price, because owners have a pretty good sense of what they can get from Disney. Robin's experience above is very unusual, and that owner had priced their contract $10 per point higher than it should have been.

Disney's ROFR levels don't seem to pay much attention to the number of points banked, available, or whether or not the contract is "stripped." For that reason, I'd look for a contract at the resort you want, with all current points available (banked points is a bonus), and ignore stripped contracts. Generally, a stripped contract at a great price just ends up being a great deal for Disney.

The only situation where I'd consider a stripped contract is if it was exactly what you were looking for and you aren't planning on visiting WDW within the period where you'd have no points. In that case, a stripped contract may be good for you over the long term, although you will not likely save any money buying it because the ROFR price will be the same as any other contract.

 

[calypso*a*go-go]

Oh boy...I better start looking at post dates a little better as I was reading this thread thinking I had lost my mind for a minute!

 

[nevertez]

oops I read this from 2003.... I hope it stayed the same!

 

[WDW LifeLong Fan]

Oh boy...I better start looking at post dates a little better as I was reading this thread thinking I had lost my mind for a minute!

Me too! I read Robin's numbers and I was ready to start making offers again!

 

[robinb]

Me too! I read Robin's numbers and I was ready to start making offers again!

It makes me look brilliant, doesn't it ?

 

[JimMIA]

The concepts have not changed, but the prices certainly have.

Even Robin's example, unusual though it is, is a good one to keep in mind. Instead of looking at the $6 discount they got off an inflated price, realize that they paid $4 more than the ROFR level at that time.

But also realize that it turned out to be a great long-term purchase for them. BWV ROFR levels are now in the high 80's, and they only paid $62.

 

[robinb]

The concepts have not changed, but the prices certainly have.

Even Robin's example, unusual though it is, is a good one to keep in mind. Instead of looking at the $6 discount they got off an inflated price, realize that they paid $4 more than the ROFR level at that time.

But also realize that it turned out to be a great long-term purchase for them. BWV ROFR levels are now in the high 80's, and they only paid $62.

At the time I considered the $4 over ROFR a "wash" since the contract included 100 2001 points which were banked into 2002 which I promptly rented for $10 per point. I had a specific need for the BWV points: New Year's Eve, so I booked my trip out of the 2002 points. I'll be using that same contract this December .

FWIW, I bought 230 OKW points for $55 per point with banked points in 1997 which included free park passes through the end of 1999. It's scary to think that I'll spend twice as much when (and if) the Contemporary and/or AKL Villas go on sale.

 

[WDW LifeLong Fan]

It makes me look brilliant, doesn't it ?

Yes it does.

Or as the commercial would say:Brilliant!

 

[Delaware Mike]

I think people often get contract pricing backwards in their eagerness to get a "great deal."

The only important number in a resale is the price that will clear ROFR. If you don't get past ROFR, the price doesn't matter, because you lose the contract to Disney -- they got the "great deal," not you.

That price may be at the offering price, and it is often above the offering price. It is seldom below the offering price, because owners have a pretty good sense of what they can get from Disney. Robin's experience above is very unusual, and that owner had priced their contract $10 per point higher than it should have been.

Disney's ROFR levels don't seem to pay much attention to the number of points banked, available, or whether or not the contract is "stripped." For that reason, I'd look for a contract at the resort you want, with all current points available (banked points is a bonus), and ignore stripped contracts. Generally, a stripped contract at a great price just ends up being a great deal for Disney.

The only situation where I'd consider a stripped contract is if it was exactly what you were looking for and you aren't planning on visiting WDW within the period where you'd have no points. In that case, a stripped contract may be good for you over the long term, although you will not likely save any money buying it because the ROFR price will be the same as any other contract.

Jim makes incredibly good points in his post, with which I wholeheartedly agree.

When we offered our price for a 120 point SSR resale, we took into consideration the going rate for a member wishing an add-on (I believe to be at $86.00 per point..someone please check me on this point).

Thinking Disney's approach to ROFR (and who knows for sure, right?!?!) is to obtain points for add-on contracts, and knowing their member price I thought in terms of "return on investment". If I were to offer around $85.00 per point on the resale market, Disney probably won't interest themselves in my contract. There would be only a dollar margin in the deal if they ROFR my contract to provide points to a member at $86.00, and various expenses would still need to be deducted from that dollar. Is there enough margin in the deal to keep it above water after deducting expenses? Who knows.... but it seemed to work for me.

We passed ROFR at $85 and change... and this amount was above the asking price. However, it was still within the price range I thought I'd pay all along, and it was for the resort and UY I wanted.

I hope this helps.