Contracts drying up??

[ChipTheRescueRanger]

I just got a notification from DVCforless that a broker on a stripped contract that has sold for 200+ days has just put the price per point up.

thats a bold move

 

[VGCgroupie]

I just got a notification from DVCforless that a broker on a stripped contract that has sold for 200+ days has just put the price per point up.

thats a bold move

Just about everything listed currently is overpriced, I think it’s due to the thread title, contracts drying up. There has been a handful of good prices but those go in like an hour. They may have raised price to bump it up in aggregators in hopes to get original asking. My realtor did this on my home sale and it didn’t work

 

[CastAStone]

I think the “Commercial Contract Stripper” Boogeyman is significantly overblown.

I agree; I’m sure it happens but also why would *anyone* sell a contract without stripping it first, unless they were desperate?

 

[WinterSolider]

I wonder if the big dump of contacts from one broker is the same seller. Most of them have same use year and similar amount of points.

I'm seeing like 30 contracts from the same broker dumped in two batches that are all over the place. AKV, SSR, CCV, PVB, tons of AUL. Every Use Year, with points ranging from 50 to 400.

 

[CastAStone]

I agree; I’m sure it happens but also why would *anyone* sell a contract without stripping it first, unless they were desperate?

And to that end, I don’t know if this happens, but if I were DVC Resale Market or the DVC Store and I had both a rental business and a sale business, and someone came to me with a loaded contract, I’d advise them that I could make them more money if they rent the points (with me!) first and THEN sell the contract (also with me!).

If they are doing that, not only do I think that’s perfectly okay to do, I think it’s the right thing for them to do for that seller.

 

[VGCgroupie]

And to that end, I don’t know if this happens, but if I were DVC Resale Market or the DVC Store and I had both a rental business and a sale business, and someone came to me with a loaded contract, I’d advise them that I could make them more money if they rent the points (with me!) first and THEN sell the contract (also with me!).

If they are doing that, not only do I think that’s perfectly okay to do, I think it’s the right thing for them to do for that seller.

I agree with this. I assume that a majority of people don't even realize they can rent, so it does provide a better service to the seller if a broker presents them with this option prior to selling.

 

[MISCdisney21]

I think a lot of new buyers look at price per point, not realizing the contract is stripped. The price looks better initially.

But as a buyer, I’m looking for a loaded contract. It can more than make up for higher the price per point.

 

[VGCgroupie]

I think a lot of new buyers look at price per point, not realizing the contract is stripped. The price looks better initially.

But as a buyer, I’m looking for a loaded contract. It can more than make up for higher the price per point.

Loaded 1st time contracts are dangerous. I had extra points so I wanted more more more.

 

[disneylandtour]

And to that end, I don’t know if this happens, but if I were DVC Resale Market or the DVC Store and I had both a rental business and a sale business, and someone came to me with a loaded contract, I’d advise them that I could make them more money if they rent the points (with me!) first and THEN sell the contract (also with me!).

If they are doing that, not only do I think that’s perfectly okay to do, I think it’s the right thing for them to do for that seller.

Some brokers look after their clients, others look out for themselves. One of those two brokers you list, I'm pretty sure, would first try to buy the loaded contract outright and then strip it themselves.

 

[Mikey15]

Then it’s notated as delayed close. I’m too impatient for those so I’d not buy.

Kinda curious how it works for a delayed close. Do they just hold your deposit for the delay period? Or do you as the buyer pay for the whole thing and the funds live in trust/escrow for up to 11 months?

 

[WinterSolider]

Kinda curious how it works for a delayed close. Do they just hold your deposit for the delay period? Or do you as the buyer pay for the whole thing and the funds live in trust/escrow for up to 11 months?

Contract, deposit, and ROFR happen right away. Then you sit around for however many months and final payment is made closer to the closing date.

 

[Mikey15]

Contract, deposit, and ROFR happen right away. Then you sit around for however many months and final payment is made closer to the closing date.

Thanks!

I could see it being attractive to some to buy at an agreed price now, but then have a couple months before they have to write the final check!

 

[CastAStone]

Some brokers look after their clients, others look out for themselves. One of those two brokers you list, I'm pretty sure, would first try to buy the loaded contract outright and then strip it themselves.

Maybe! Why not try.

But there’s a pretty big gap between “would first try to” and “would regularly be successful at”, probably $10-$15/point or more in their offer to sellers on most contracts, and that would eliminate the benefit of doing that for the broker.

 

[disneylandtour]

Kinda curious how it works for a delayed close. Do they just hold your deposit for the delay period? Or do you as the buyer pay for the whole thing and the funds live in trust/escrow for up to 11 months?

The one delayed I bought - it was deposit, contracts, and then a lot of waiting. I would expect to negotiate a meaningful discount on this. Also, we're moving into the period where some sellers are going to be a little extra motivated to sell their contracts before MFs come due. So it might make sense to buy a delayed closing contract in spring, it makes little sense to buy one now, unless the price was unbelievable.

 

[VGCgroupie]

Kinda curious how it works for a delayed close. Do they just hold your deposit for the delay period? Or do you as the buyer pay for the whole thing and the funds live in trust/escrow for up to 11 months?

Ive learned that even for non delayed close I dont give final payment until sellers closing docs are returned and title is ready to close. Ive made a lot interest in the bank by holding on to my money when resales take a really long time.

Ive not bought a delayed contract but Ive been told it can continue through the ROFR process at least which is nice.

 

[VGCgroupie]

Thanks!

I could see it being attractive to some to buy at an agreed price now, but then have a couple months before they have to write the final check!

The potential downside to this is if prices fall before a long delayed close you have to move forward and buy or lose your deposit.

 

[HyperspaceMountainPilot]

That's true now.

It's not necessarily going to be true forever. DVC has a bit of a habit of following in the footsteps of other timeshare developers--for example, the path of various resale restrictions. And there are other timeshare developers that have taken a much firmer stance towards this.

If I were a Serious Renter, I would have an exit strategy in mind. I might not ever need it, but I'd want to know what it is.

I agree, but the problem is that if all "serious renters" have the same exit strategy in mind, they (and we) need to be prepared for a serious drop in resale prices while the people who own thousands of points to rent unwind their holdings.

Hasn't this come up a few times before and general consensus is Disney A) doesn't give a hoot as they just want a room filled and B) trying to implement a rule to stop renting would be near enough impossible

There are (seemingly credible?) rumors that Disney already has entire blocks of rooms offline because they have excess hotel capacity, meanwhile even more new rooms are about to open at Poly Tower and there isn't too much new (except the night parade?) to entice people to WDW much of next year. While I'm not vouching for the alleged insiders claiming Disney has way too much hotel capacity, the fact that they are bringing back lots of aggressive discounts suggests the environment has deteriorated-- my theory has always been that if Disney has a hard enough time selling it's own hotel inventory, it's going to start to squeeze commercial renters (who are its only competition for on site hotels with perks).

I'm seeing like 30 contracts from the same broker dumped in two batches that are all over the place. AKV, SSR, CCV, PVB, tons of AUL. Every Use Year, with points ranging from 50 to 400.

Perhaps what we are seeing is a serious renter's exit strategy.
Seriously though, the other thing that just occured to me is that at least a few major commercial renters may get a heads-up about a policy change before it trickles out through the official channels, bloggers, or DISboards... so if you are an individual without close contacts at DVC corporate, your exit strategy should account for the fact that others will have the opportunity to dump first.

 

[Brian Noble]

the problem is that if all "serious renters" have the same exit strategy in mind

Only if they execute it at the same time. For example, one time is "the market appears to be softening"

Perhaps what we are seeing is a serious renter's exit strategy.

...and maybe this is one such example. After all, if this is true:

There are (seemingly credible?) rumors that Disney already has entire blocks of rooms offline because they have excess hotel capacity,

(I have no reason to believe it or disbelieve it) then D*C rentals should also be seeing a slowdown in traffic. I have heard similar things from some of the larger (not-necessarily-D*C) renters on TUG. A large-scale renter would see that slowdown faster than someone who rents onesies-twosies.

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Edited to add: I moved to using D*C because I'm annoyed at the DISboards Advertisinator.)

 

[HyperspaceMountainPilot]

Only if they execute it at the same time. For example, one time is "the market appears to be softening"


...and maybe this is one such example. After all, if this is true:


(I have no reason to believe it or disbelieve it) then D*C rentals should also be seeing a slowdown in traffic. I have heard similar things from some of the larger (not-necessarily-D*C) renters on TUG. A large-scale renter would see that slowdown faster than someone who rents onesies-twosies.

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Edited to add: I moved to using D*C because I'm annoyed at the DISboards Advertisinator.)

I generally agree with everything you said, but if people are getting squeezed on pricing, I would think Disney hotels would see demand fall off more aggressively and perhaps at least some people who used to stay at BWI or BC or RIV might now be renting at BWV or people who used to stay at WL are now staying at CCV/BRV.

 

[Brian Noble]

I don't think the D*C rental market is that fluid. Some people simply won't do it, and many others don't know it is possible. Plus, it may not be a slowdown in people willing to pay top-shelf TWDC hotel rates. It may be a slowdown in travel to WDW, or Orlando, or even generally.