Comparing contracts

[Cajun28]

I am thinking about buying DVC for the first time and have a couple of resales I am looking at. Is there a formula out there that shows what is the value that a banked point adds to a contract. For instance if a contract has all of last years points banked and available, how does that contract compare value wise to a contract that has no banked points or has points stripped from it

TIA for any help

 

[RobDoc]

Some will assign a value (like $10 per point) to any banked points and use that as a comparison. At the least, you could assign the value of the annual fees on banked points (that were already paid).

Some will discount any used current or borrowed points in a contract they may not be able to use themselves for a year. In that case, borrowed points should be considered as a liability since annual fees must still be paid on them by the owner of record on January 1. Some will negotiate a credit to the buyer for those anticipated fees on the borrowed points.

I'm not aware of any "formula", but due diligence is probably the best course - and you are doing exactly that by asking questions. Be sure to compare any resale purchase costs/expenses with a purchase direct from DVC. All DVC purchases will have all points from the current Use Year and another full compliment of points when the Use Year begins again. In addition, annual fees will be prorated based on the date of purchase. Buy on October 1 and you will only owe dues for 3 months - 1/3 of the usual total of the annual fees. No direct purchases will have banked points, but if you can buy a direct contract with a Use Year in the near future you would get current points (and be allowed to bank them) and then get another full compliment of points when the new Use Year starts again. If you could buy a resort with an October Use Year, you'd get all points from the 2007 Use Year, bank those points and get another allotment of points next week.

Good luck! Enjoy the research and the planning!

 

[Cajun28]

Thanks for the info.

One of the contracts I am looking at has a list price higher than other contracts I've seen pass, but it has all 2007 points banked. If I use the $10/per point value(which is exactly the amt I was thinking), it brings the bottom line price closer to other contracts.

Thanks to everyone who has answered questions on this board, both ones I asked and also ones others have asked. I've learned more in the last 2 weeks about DVC than I think I learned in 4 years of college (Maybe, it's just I'm more interested in this subject than I was back then...LOL)

 

[Grandbuddy]

Thanks for the info.

One of the contracts I am looking at has a list price higher than other contracts I've seen pass, but it has all 2007 points banked. If I use the $10/per point value(which is exactly the amt I was thinking), it brings the bottom line price closer to other contracts.

Thanks to everyone who has answered questions on this board, both ones I asked and also ones others have asked. I've learned more in the last 2 weeks about DVC than I think I learned in 4 years of college (Maybe, it's just I'm more interested in this subject than I was back then...LOL)

Those points have value to you only if you can use them or rent them out; and some sellers will also ask you to reimburse them for mfs for banked points, as well as current year's points. Be certain you have a clear understanding with the agent as to any reimbursements you are expected to pay in addition to the sales price and closing costs.

 

[dudelydude]

Another great question and answer for us newbies. This information is absolutely crucial to consider when buying resale. We hear all too often about, "My agent didn't tell me this," or "My guide didn't tell me that." It is so important that we do our own research (as you have done here), so we aren't so dependant on guides and agents. I mean, we should rely on them, but it's almost as though we should blame ourselves if something goes wrong because of the outstanding resources we have right here at our fingertips. Thanks Doc and Grandbuddy.

 

[Dean]

Personally I ignore any banked or borrowed points that are in the current UY. I'd assign a value to any banked points in future UY of $10 per point but would subtract the related dues if you're having to pay them in any way. I'd also subtract $10 for any points not available in a future UY such as borrowed to this UY even if the points were still in the contract. The other issue that gets most people is that in almost all cases dues are overcharged on a resale. For example, say one were buying a contract with a Dec UY in jan, 2009 and the first points available were Dec, 2009. Given the dues are billed on a Calendar year basis, the dues paid in Jan would be for 11 months of the 2008 UY and 1 mo of the 2009 UY. Thus if you got all points in Dec, 2009 and paid the entire years points, you'd be overpaying by a 11/12 or almost $5 a point depending on the home resort.