Calculating the cost of a resale contract

[tom1944]

When you purchase a resale contract it appears to me that the cost of points are actually lower than reported

So on the ROFR thread there is an OKW sale at $90 a point for 190 points. But the contract carries points from 2022, 2023 and 2024. The total points you initially get are 780. So while you are getting 190 point contract how do you decide the valuation of the total points you get.

Obviously 190 point contract with 780 points for 2022-2024 is more valuable than one that only has 380 points

 

[Epcot Forever Forever]

When you purchase a resale contract it appears to me that the cost of points are actually lower than reported

So on the ROFR thread there is an OKW sale at $90 a point for 190 points. But the contract carries points from 2022, 2023 and 2024. The total points you initially get are 780. So while you are getting 190 point contract how do you decide the valuation of the total points you get.

Obviously 190 point contract with 780 points for 2022-2024 is more valuable than one that only has 380 points

A contract you buy has all the points until it expires; for old key west that’s usually in 2042 (so last year you’d get points is 2041)

The reason they list out specifically the next few years on a contract on a resale site is because it’s possible the current owner has spent the next few years points already. So you could get anywhere from 17 to 19 years of points, depending what they’ve done. Obviously 19 years is worth more than 17 years and that’s reflected in the price you’ll wind up paying, but it’s not double or triple because it’s still only 10-15% of the total term of the contract.

 

[FrannyFrogs]

When we're in the market to buy resale, I make a spreadsheet to calculate the $/point.

Total points: points per year times remaining years, plus or minus those banked or missing (borrowed) points that you're referring to.

Total cost: purchase price including closing costs, plus dues/pt times pts/year times years remaining. I think some people try and account for the yearly inflation of dues but I find that too complicated!

Total cost divided by total points gives you $/point. It's a good way to compare the different contracts. Also I like knowing my points are worth, for example, about $11 each. Then it's easy to compare DVC booking to cash prices to DVC rental prices.

 

[Sandisw]

We never attributed more than an extra $10/point we would be willing to pay over what we wanted if we found the perfect contract that has the extra points.

When I bought my RiV resale in 2021, I paid $152 which was probably about $10 more than I could have gotten other ones out there but none fit what I wanted like this one did.

ETA. Which was still down from initial price of $160 they were asking.

 

[Her Dotness]

We’re probably the reckless ones on this thread because we cared only about an affordable price-per on the resort we wanted, VGF. We owned 125 VGF points already so knew what dues would add overall.

We also didn’t care that the 2022 points had been used. Because we couldn’t return this year, grabbing a workable resale at an acceptable price was good enough for us.

Virtually everybody here on the boards said not to buy VGF before it went on sale for VGF2. The bottom would drop out on VGF resales after the direct price was public.

We closed two weeks before member-only sales opened and got $16pp less. The rumored bottom of $135-45 as soon as the direct price was known never materialized. Still hadn’t a month or so later.

Sometimes, you can be quite happy not detailing endlessly but instead simply buying a resort that feels most like home. Unless spreadsheets and ironing out the details are essential for you, I suppose.

 

[sndral]

You need to consider MFs - does the seller expect to be reimbursed for them?
Also, use year, if you buy a Feb. use year contract w/ banked points right now you likely won’t have much time to use them after the 60-90 days it takes to close & get access to them & most everything is already booked, so those banked points may have no value to you. Likewise w/ buying a contract w/ current use year points after the banking window has closed.

 

[DVCanadian]

When you purchase a resale contract it appears to me that the cost of points are actually lower than reported

So on the ROFR thread there is an OKW sale at $90 a point for 190 points. But the contract carries points from 2022, 2023 and 2024. The total points you initially get are 780. So while you are getting 190 point contract how do you decide the valuation of the total points you get.

Obviously 190 point contract with 780 points for 2022-2024 is more valuable than one that only has 380 points

You may want to calculate the points you get with the contract over the life of the contract. Price per point works well for direct from Disney when each contract has close to 50 years. Resale is different.

What you are buying isn’t 150 points, it is the rights to 150 points for 19-50 years. 34 years x 150 points is 4,800 points (using an estimate of the length of an SSR contract as an example).

Price per point is a short hand and doesn’t really cover the difference between SSR and BCV contract length, for example. The current points a contract comes with is only one thing to think about (buy a fully loaded contract and rent points to reduce your buy in!).

Multiple years on the contact and the points you get each year, divide that by the cost. Dues aren’t part of the buy in (cost of the contract/membership), they are the ongoing cost.

 

[sethschroeder]

there is a 3 year span which points could have been banked from last year, still on there from this year, and not borrowed from next year.

Those 3 years could have all, some, none of the points left. Typically most contracts run about the same price but if you can find a loaded contract and will use the points it can be a good move.

 

[Iahmom]

Well right now you have to calculate the cost of the dues for closing as well. I can’t remember the exact date in Dec but you have to pay 2023 in full at closing, that is if you pass. Last time I bought a stripped out contract so this time I looked for a contract that wasn’t stripped.
Are you looking at buying resale? I made some offers and some are willing to negotiate and some are NOT. So those super low price points are fabulous but not always easy to find to match your UY.

 

[Jack Kerouac]

Well right now you have to calculate the cost of the dues for closing as well. I can’t remember the exact date in Dec but you have to pay 2023 in full at closing, that is if you pass. Last time I bought a stripped out contract so this time I looked for a contract that wasn’t stripped.
Are you looking at buying resale? I made some offers and some are willing to negotiate and some are NOT. So those super low price points are fabulous but not always easy to find to match your UY.

We are supposed to close on 12/05 and dues have to be paid at closing.