Help me evaluate this contract, please!

[AmyAnne]

We have decided to purchase 100 SSR points. We decided on 100 points because that gets us close to a 1 BR for 3 nights in February, which is our preferred time to be at WDW, with borrowing or banking a few points if needed. We decided on SSR because we do not need to stay at a particular resort and SSR seems a good value for the annual fees.

So, now that that decision is made (although feel free to challenge my logic--better to find the flaws now than after we have purchased!), I am starting to try to figure out how to weigh the various pieces of a contract. I received an email from the Timeshare Store (I think I am allowed to disclose this) and this SSR contract caught my attention:

100 points. August use year. 169 points currently available (71 + 98 banked points from 2011, banked points need to be used by 8/1/13) and 100 points coming on 8/1/13. NO ANNUAL DUES UNTIL 2013. Closing Costs=$397 Priced at $68/pt ($6800).

The first thing I noticed is that the price per point is higher than most of the SSR contracts listed on the "Have You Passed ROFR" thread--$50 - $60 per point seems to be a more typical price range. But this contract has a lot of points available to use right away. Plus, there are no annual fees to pay on the 2011 and 2012 points.

I am not sure how to process these variables. Does anyone have anything like a formula to figure out how to weigh price per point vs. points avaliable vs. fees (vs. anything else I am not thinking of)!?

ETA: I have just started looking seriously for a resale, so while I wouldn't be opposed to actually purchasing this contract, I really am using it primarily as an example to get some help in figuring out how to recognize a good resale contract.

 

[gripp35]

As many people will tell you, a "good contract" is one that you will be happy with and that is all that will matter 2-3 years down the road!
I would suggest looking at the ROFR thread (as you've done) and decide what _you_ would be happy paying (there are lots of Aug and Dec UY contracts but not many Sept or Jun, so they might draw a premium, if that is what you want), then just contact the agency when a desirable contract comes up and see if the seller is willing to negotiate (or if the agent is willing to negotiate, apparently not all are). When looking at banked/borrowed points in the contract, if you are not going to be able to use banked points, they may not hold the value for you that the seller/agent believes they should command (although you could always probably rent them out if you wanted). I would personally add value for banked points I thought I could use.

The contract you mentioned might be a wash for me because the 2012 points stripped from the contract would negate the value of the 2011 points, since you will probably not even have 7-month home resort advantage with them by the time you take ownership of the contract.

The other thing to remember is that some sellers have financed their purchase and still have a loan they need to pay off so they may not be willing to go below a certain price so they can break even on the deal. So just because one seller/agent won't budge on a price doesn't mean others won't.

 

[htmlkid]

We have decided to purchase 100 SSR points. We decided on 100 points because that gets us close to a 1 BR for 3 nights in February, which is our preferred time to be at WDW, with borrowing or banking a few points if needed. We decided on SSR because we do not need to stay at a particular resort and SSR seems a good value for the annual fees.

So, now that that decision is made (although feel free to challenge my logic--better to find the flaws now than after we have purchased!), I am starting to try to figure out how to weigh the various pieces of a contract. I received an email from the Timeshare Store (I think I am allowed to disclose this) and this SSR contract caught my attention:

100 points. August use year. 169 points currently available (71 + 98 banked points from 2011, banked points need to be used by 8/1/13) and 100 points coming on 8/1/13. NO ANNUAL DUES UNTIL 2013. Closing Costs=$397 Priced at $68/pt ($6800).

The first thing I noticed is that the price per point is higher than most of the SSR contracts listed on the "Have You Passed ROFR" thread--$50 - $60 per point seems to be a more typical price range. But this contract has a lot of points available to use right away. Plus, there are no annual fees to pay on the 2011 and 2012 points.

I am not sure how to process these variables. Does anyone have anything like a formula to figure out how to weigh price per point vs. points avaliable vs. fees (vs. anything else I am not thinking of)!?

ETA: I have just started looking seriously for a resale, so while I wouldn't be opposed to actually purchasing this contract, I really am using it primarily as an example to get some help in figuring out how to recognize a good resale contract.

I've purchased 2 fully loaded contracts in the past 8 months. I just passed ROFR on 190 points @50 all of 2011 points, all of 2012 and there after... with the seller paying closing and MF's. Sounds amazing right... well it took 10 offers on 10 different contracts before I got that one accepted. My feeling is that you need to decide on what price your comfortable at, and then make an offer. I wasn't willing to go any higher then $50 a point on a fully loaded contract and $40 on a stripped contract and I was willing to wait as long as it took. If you chum the water long enough, you will find a fish to bite.

I hope this helps, and best of luck!!!

 

[bighoo93]

I've purchased 2 fully loaded contracts in the past 8 months. I just passed ROFR on 190 points @50 all of 2011 points, all of 2012 and there after... with the seller paying closing and MF's. Sounds amazing right... well it took 10 offers on 10 different contracts before I got that one accepted. My feeling is that you need to decide on what price your comfortable at, and then make an offer. I wasn't willing to go any higher then $50 a point on a fully loaded contract and $40 on a stripped contract and I was willing to wait as long as it took. If you chum the water long enough, you will find a fish to bite.

I hope this helps, and best of luck!!!

I really agree with this advice. You don't have to hold out for the lowest possible cost if it isn't worth your time ($1 per point difference is only $100), but don't just take whatever asking price is. I would pretty much ignore asking price and look at the prices others have been getting. One thing to consider for a proper comparison is the contract size. Smaller contracts generally draw a higher price per point. $50 may be tough to get for just 100 points. I would not expect to pay more than $60 though.

 

[zeferjen]

I would figure out what the 'average' 100 point contact went for over the last few years. then you can value the additional points at roughly $10/pt and see what the average price you would be willing to pay here.

 

[DougEMG]

100 points. August use year. 169 points currently available (71 + 98 banked points from 2011, banked points need to be used by 8/1/13) and 100 points coming on 8/1/13. NO ANNUAL DUES UNTIL 2013. Closing Costs=$397 Priced at $68/pt ($6800).

I am not sure how to process these variables. Does anyone have anything like a formula to figure out how to weigh price per point vs. points avaliable vs. fees (vs. anything else I am not thinking of)!?

The most important thing is to buy a contract that makes you happy.

To compare different contracts I use the following formula to come up with what each point is costing me.

(Price per Point Costs + Closing Costs + MF Costs - Value of Current & Bank Points) / Number of Points

So in your case
Price per Point Costs = $68 * 100 = $6800
Closing Costs = $397
MF Costs = $0

For the Value of Current & Banked Points I would use either the MF cost for those points if you plan to use them yourself, or the amount you could rent them for if you don't plan on using them yourself. So in your case assuming you use those points

Value of Current & Banked Points = 169 * $4.73 = $799

Plugging all those numbers in gives us

($6800 + $397 + $0 - $799) / 100 = $63.98 per point

Now comparing that to a SSR contract for 200 points at $50/point with all 2011 & 2012 points and you using those points, no closing and no MF gives (this SSR contract would be a very good deal).

($10000 + $0 + $0 - $1892) / 200 = $40.54 per point

 

[DannysMom]

I'm not currently in the market for more points, but still peruse the current listings online. For myself, if I were looking for SSR points, I would not want to pay more than about $60/pt for a loaded contract, my initial offer for such a contract would probably be in the mid 50's. For a contract that was moderately stripped (I would not not interested in a completely stripped contract) I would be looking for mid 50's per point or less, so my initial offer would be less as well.

Sent from my iPad using DISBoards App, please excuse any typos.

 

[MickeyFan612]

We have decided to purchase 100 SSR points. We decided on 100 points because that gets us close to a 1 BR for 3 nights in February, which is our preferred time to be at WDW, with borrowing or banking a few points if needed. We decided on SSR because we do not need to stay at a particular resort and SSR seems a good value for the annual fees.

So, now that that decision is made (although feel free to challenge my logic--better to find the flaws now than after we have purchased!), I am starting to try to figure out how to weigh the various pieces of a contract. I received an email from the Timeshare Store (I think I am allowed to disclose this) and this SSR contract caught my attention:

100 points. August use year. 169 points currently available (71 + 98 banked points from 2011, banked points need to be used by 8/1/13) and 100 points coming on 8/1/13. NO ANNUAL DUES UNTIL 2013. Closing Costs=$397 Priced at $68/pt ($6800).

The first thing I noticed is that the price per point is higher than most of the SSR contracts listed on the "Have You Passed ROFR" thread--$50 - $60 per point seems to be a more typical price range. But this contract has a lot of points available to use right away. Plus, there are no annual fees to pay on the 2011 and 2012 points.

I am not sure how to process these variables. Does anyone have anything like a formula to figure out how to weigh price per point vs. points avaliable vs. fees (vs. anything else I am not thinking of)!?

ETA: I have just started looking seriously for a resale, so while I wouldn't be opposed to actually purchasing this contract, I really am using it primarily as an example to get some help in figuring out how to recognize a good resale contract.

Hi Amy-

I noticed a 100 point SSR listing a Fidelity today that was only missing 12 of the 2011 points if you are looking for one that is less stripped! It is listed for $65/ point and is a Dec use year. August may be a more desirable use year thus fetching a premium price. If use year isn't very important, this may be one you can snag for mid-fifties Good Luck to you!

 

[AmyAnne]

Hi Amy-

I noticed a 100 point SSR listing a Fidelity today that was only missing 12 of the 2011 points if you are looking for one that is less stripped! It is listed for $65/ point and is a Dec use year. August may be a more desirable use year thus fetching a premium price. If use year isn't very important, this may be one you can snag for mid-fifties Good Luck to you!

Thanks for pointing this out. But if the use year is December, when would those 2011 points need to be used by?

 

[333disneymom]

Thanks for pointing this out. But if the use year is December, when would those 2011 points need to be used by?

If they were banked into 2012, you could use them up to November 30, 2013, I think. If not, you would have to use them by November 30, 2012.

Also, I just got information about a listing emailed to me today. It's 150 points SSR $60 September UY, with all 2012 points. It's from a company called DVC by Resale. I have never used them, but thought I'd let you know.

 

[DVCanadian]

I've purchased 2 fully loaded contracts in the past 8 months. I just passed ROFR on 190 points @50 all of 2011 points, all of 2012 and there after... with the seller paying closing and MF's. Sounds amazing right... well it took 10 offers on 10 different contracts before I got that one accepted. My feeling is that you need to decide on what price your comfortable at, and then make an offer. I wasn't willing to go any higher then $50 a point on a fully loaded contract and $40 on a stripped contract and I was willing to wait as long as it took. If you chum the water long enough, you will find a fish to bite.

This post nails how to get the best price.
Since you asked...
$69 per point is very high. I wouldn't pay more than $55 for SSR given the reports in the ROFR thread, if paying more than other people would bother you (it would drive me crazy). Be comfortable with the amount you pay and it will all work out.

 

[Lizard Valley]

Hi AmyAnne,

Congratulations on getting to the point where you're getting ready to make offers on contracts! It's a huge learning curve, and interpreting the listings can get pretty daunting.

I used the ROFR thread to determine what I'd be comfortable paying. In my case, it was 55/pt, fully loaded (meaning all 2011 and 2012 points, available and paid for by the seller). That's a pretty average price for people who visit the DVC forums and know what they can get. There are many out there who simply look at the listings, and think they have to pay the asking price. And then there are others who are willing to pay asking price simply to get exactly what they want (right # of points, right resort, perfect UY).

If the listed contract only has current year (2012) points, I'd aim at paying 5$-10$ less per point. I'd stay away from a stripped contract (no points until 2013 or even 2014), as the slightly lower price difference can't come close to the value of banked or current points. As Doug mentioned, you can consider the value of every years' worth of "paid" points at 10$.

Finally, if you're ready to make some offers, the broker you use makes a difference. The Timesharestore has fair listing prices, but they don't encourage much negotiation. You will find fully loaded SSR contracts for 65$, missing 2011 points for 63-64$, and stripped contracts for 60-62$. You will likely not get very far with them by offering 50-55/pt. At best, you might get away with 1$ or 2$ below asking. If the broker doesn't like your offer, they will not encourage the seller to accept, as they know someone else will come along in 5 minutes and pay full price. Simply put, you will not get a $55/pt contract through them.

I have found Fidelity (Rachel or Sharon) to be the best when it comes to making low offers. It is completely acceptable to offer what you are willing to pay, and they've seen all sorts of crazy offers get through. I just missed an SSR 100 Sept with all 2011/2012 points that was listed at 80$/pt. I hesitated because I figured the seller would never go down to 55. I found out later that it went for 53!

Once you get a feel for what the listings mean, keep an eye on all 4 of the major dvc resale websites and be ready to jump on anything new. For timeshare store, it's pretty easy, because the last 4 digits of the listing number are the date. So if the last numbers are 1005, it means it was listed yesterday. If the last numbers are 1017, then it was listed on Oct 17th of last year. You will be able to learn what is unfavorable about the listing (banked points in holding about to expire, stripped until 2014, etc).

Fidelity listings are more complicated to interpret. Firstly, the asking prices are all over the place, but they really don't mean anything. The listing number shows what's oldest and newest. Numbers starting with 135 are newer than 134, which are newer than 133, etc. We are about at 1352668 right now. I would expect new listings next week to be at 1352700, then 1352800, etc. You'll have better luck making low offers with brand new listings. The older ones are probably non-negotiable, and the sellers have a loan to pay off and need their asking price, and that's the reason they're still there.

I hope this helps. I spent weeks gathering up all this information before I felt comfortable enough to make offers. There's still much more to know, but this is a first step

Good luck!

 

[333disneymom]

Hi AmyAnne,

Finally, if you're ready to make some offers, the broker you use makes a difference. The Timesharestore has fair listing prices, but they don't encourage much negotiation. You will find fully loaded SSR contracts for 65$, missing 2011 points for 63-64$, and stripped contracts for 60-62$. You will likely not get very far with them by offering 50-55/pt. At best, you might get away with 1$ or 2$ below asking. If the broker doesn't like your offer, they will not encourage the seller to accept, as they know someone else will come along in 5 minutes and pay full price. Simply put, you will not get a $55/pt contract through them.

I have found Fidelity (Rachel or Sharon) to be the best when it comes to making low offers. It is completely acceptable to offer what you are willing to pay, and they've seen all sorts of crazy offers get through. I just missed an SSR 100 Sept with all 2011/2012 points that was listed at 80$/pt. I hesitated because I figured the seller would never go down to 55. I found out later that it went for 53!

Once you get a feel for what the listings mean, keep an eye on all 4 of the major dvc resale websites and be ready to jump on anything new. For timeshare store, it's pretty easy, because the last 4 digits of the listing number are the date. So if the last numbers are 1005, it means it was listed yesterday. If the last numbers are 1017, then it was listed on Oct 17th of last year. You will be able to learn what is unfavorable about the listing (banked points in holding about to expire, stripped until 2014, etc).

Fidelity listings are more complicated to interpret. Firstly, the asking prices are all over the place, but they really don't mean anything. The listing number shows what's oldest and newest. Numbers starting with 135 are newer than 134, which are newer than 133, etc. We are about at 1352668 right now. I would expect new listings next week to be at 1352700, then 1352800, etc. You'll have better luck making low offers with brand new listings. The older ones are probably non-negotiable, and the sellers have a loan to pay off and need their asking price, and that's the reason they're still there.

Good luck!

I totally agree with the information here about the two major resale companies. Rachel and Sharon are very helpful and don't try to talk you out of a low bid.

Great information concerning the listing numbers at both companies.

 

[DannysMom]

I'd also add, don't be afraid to make a lowball offer on an older listing. As time wears on, sellers can get more anxious to sell, especially if the offers have been few and far between. They do eventually come to recognize that they may have over-valued their contract and if they truly want to sell will negotiate.

Sent from my iPhone using DISBoards App please excuse any typos.

 

[AmyAnne]

If they were banked into 2012, you could use them up to November 30, 2013, I think. If not, you would have to use them by November 30, 2012.

I definitely will need to master the banking rules, since points we could use would be worth around $10 but points that will expire (is that the right term?) before we could use them would be a hassle at best, if we could rent them.

And thanks to everyone who has posted here. I really don't know how people buy DVC without the disboards!

 

[cz4ever]

I definitely will need to master the banking rules, since points we could use would be worth around $10 but points that will expire (is that the right term?) before we could use them would be a hassle at best, if we could rent them.

And thanks to everyone who has posted here. I really don't know how people buy DVC without the disboards!

Expire is as good a term as any. And, yes, you will want to become familiar with the banking rules. They're actually straightforward, but when combined with the frequent confusion about Use Years in general, its one more thing to get mixed up.

And, yes, points that are nearing expiration are a hassle at best. I recently closed on two contracts with a total of over 600 points expiring at the end of November, and it's been a royal pain (but a real learning experience) to rent 400+ of them in the last two weeks. Availability is so limited when you get under 60 days that even if you find eager renters, it's hard to find any inventory to satisfy them! ("What, BLT standard is gone 15 days from now? How can that be? I see inventory in the Disney website!" ).

As for buying, I think PPs have covered all the key points.

• In a negotiation, everything is negotiable. Asking price is nothing more than that, although you'll quickly learn which sellers will budge and which consider it firm.
• It all comes down to a cash amount. You can convert banked (or missing) points into cash equivalents, e.g., with Doug's formula. Higher/lower per-point costs are equivalent to higher-lower MF or closing costs. All you really care about is how much cash you will have to shovel out for how many points (ignoring issues like UY).
• Small contracts cost more and disappear fast. Larger ones can languish, which you can use to your advantage if you don't mind a larger contract.
• Loaded rules. Stripped drools.

Good luck!

 

[buttrflyksses]

Hi Amy-

I noticed a 100 point SSR listing a Fidelity today that was only missing 12 of the 2011 points if you are looking for one that is less stripped! It is listed for $65/ point and is a Dec use year. August may be a more desirable use year thus fetching a premium price. If use year isn't very important, this may be one you can snag for mid-fifties Good Luck to you!

I had actually already put in an offer on this listing last week when I saw this thread. The seller countered and I accepted. Fidelity sent the contract to Disney today for ROFR. I had been looking for around a 100 pt contract at SSR with DEC use year. Sharon at Fidelity was great in helping me navigate through this since it was my first resale experience. I agreed to pay a few more dollars per point than I originally wanted but decided it was well worth it since the listing was exactly what I was looking for. If I use the above formula to factor in the banked points then I am even happier.

 

[MickeyFan612]

I had actually already put in an offer on this listing last week when I saw this thread. The seller countered and I accepted. Fidelity sent the contract to Disney today for ROFR. I had been looking for around a 100 pt contract at SSR with DEC use year. Sharon at Fidelity was great in helping me navigate through this since it was my first resale experience. I agreed to pay a few more dollars per point than I originally wanted but decided it was well worth it since the listing was exactly what I was looking for. If I use the above formula to factor in the banked points then I am even happier.

This was a good one...I new it wouldn't last long!! Congrats to you!!!

 

[buttrflyksses]

This was a good one...I new it wouldn't last long!! Congrats to you!!!

Thanks!!

And to the OP good luck and I hope you are able to find a contract that is a good match for you.