How a loaded contract should play into price....

[PrincessDuck]

I am looking at AKV contracts. The one that I am looking at has 2016 points banked into the 2017 use year with full 2017 and 2018 points. December Use Year, so I would have time to use or rent the 2016 points and might ask that the 2017 points be banked into 2018.

I have looked at what is being paid, but just not sure how to factor in these variables.

Any insight?

 

[LYSE]

We just bought a loaded contract and I took the value of banked points on the rental market and basically subtracted it from our total cost and made sure my cost per point per year was where I wanted it to be (ran the numbers for a few different offer prices

I also just added the extra points to the Grand total of points received over the lifetime of the contract and saw what the cost per point per year was without renting them out.

 

[gharter]

It depends. If the points can be used or rented, they have value. If the points will be expiring before anything can be done with them, they have no value. With a December UY, it may be difficult to use the banked points before they expire. In the fall, DVC tends to be very full between Food and Wine and Christmas.
I would compare the price per point the loaded contract is asking vs other contracts with similar points but missing the banked points and expect to pay slightly more for the loaded contract. But, everything is negotiable, expecially price.

 

[Deb & Bill]

It depends. If the points can be used or rented, they have value. If the points will be expiring before anything can be done with them, they have no value. With a December UY, it may be difficult to use the banked points before they expire. In the fall, DVC tends to be very full between Food and Wine and Christmas.
I would compare the price per point the loaded contract is asking vs other contracts with similar points but missing the banked points and expect to pay slightly more for the loaded contract. But, everything is negotiable, expecially price.

Exactly. While you have points that expire on Dec 1, 2018 (the banked 2016 points), you aren't going to find lots of availability between now and then. You might just wind up losing them totally and, thus, they are worthless to you.

 

[JETSDAD]

When we bought last year I paid around $10-12 more per point for a similar contract than I could have gotten a contract with only current year points available. We bought an August UY in 2017 with 2015 pts banked into 2016 and 2016 banked into 2017. We closed in April and were able to use the 2015 pts for a trip 3 weeks later but, as others have pointed out, fall is a whole different ball game.

 

[pineapplepalms]

One of our SSR resale contracts we bought earlier this year had 2016 banked points plus 2017 full points going forward (October UY). We paid probably around $10-$15 more per point than other contracts that weren't fully loaded, and paid for 2018 dues. It was worth it for us to get all those points in the size and UY we wanted, and we got them early enough to book stays at BWV and VGC (spring/summer stays). I agree that it depends on if they can be used/rented. We prefer to use them rather than rent them so we just factored the points into our calculations and decided that the price made sense.

 

[DianeW]

I purchased a loaded contract (300 points banked) for OKW on the resale market in 2017, and I didn't pay any more than non-loaded contracts were going for. I guess the sellers were motivated.

 

[kniquy]

The one that I am looking at has 2106 points banked into the 2017 use year with full 2017 and 2018 points. December Use Year, so I would have time to use or rent the 2016 points and might ask that the 2017 points be banked into 2018.

You are entering dicey territory as to whether or not those 2016 points will be of any use to you- even if you put in an offer today, you would not have the contract until Sept so that would mean the 2016 though banked into 2017 would need to be used by Nov 30 2017 (If I am looking at things correctly). The banking deadline for a Dec UY is August - so those 2017 points would need to be banked into 2018 in order for you to be able to use them until Nov 30 2018. Make that a stipulation on the offer.

So essentially consider the 2016 points useless as unlikely you would be able to acquire the contract by Sept and find a reservation before the end of November -- not impossible to find a day here or there but very unlikely you will find anything worth the trip.

 

[Dean]

I am looking at AKV contracts. The one that I am looking at has 2106 points banked into the 2017 use year with full 2017 and 2018 points. December Use Year, so I would have time to use or rent the 2016 points and might ask that the 2017 points be banked into 2018.

I have looked at what is being paid, but just not sure how to factor in these variables.

Any insight?

It's really very simple once you get down to it. Simply assign a value to each point of roughly $13 per point for each non banked borrowed point and $5-6 pp for any banked/borrowed points. Then subtract the dues you'd have to pay. A 3 year swing between fully loaded or stripped contract then is roughly $31 pp minus dues or roughly $23-24 per point. Remember you'll still have to pay most of the dues on the points you don't have in the future so you don't adjust for 2 full years of dues. Of course the usability of the banked points comes into play. Realistically stripped contracts don't sell at such a discount so a more loaded contract is almost always a better deal even if more expensive. A good UY vs a bad one is at least a years worth of points in value as well.

 

[PrincessDuck]

Thanks for all of the replies and help! I let that contract go because they would not come off the price as much as I wanted. It is such a balancing act it seems to get a price that I am willing to pay and that Disney might not take back. We already own at a different resort, so we are in no hurry to buy. I have an offer accepted on some other points. Now the wait starts to see if it will pass or not.

 

[NewbieMom]

A good UY vs a bad one is at least a years worth of points in value as well.

@Dean curious to what you consider a "good" vs a "bad" UY? I've always thought there are no price differentials to UY, and it is just a matter of each individual's travel pattern.

 

[Dean]

@Dean curious to what you consider a "good" vs a "bad" UY? I've always thought there are no price differentials to UY, and it is just a matter of each individual's travel pattern.

A good UY is one where most of your travel is early in the UY, a bad one is where most or much is in the last 4 months of your UY. As for price, there isn't likely to be much difference in price overall but there may be a difference for a given UY depending on when you buy. More importantly, if one is getting a fully loaded contract one needs enough time to close and use the banked points. Or for a stripped contract that is a later in the year UY, that will be the more points you could potentially be paying dues were you would be paying double or for points you didn't have use of. Given the nature of ROFR it's unlikely one would get enough of a deal to make buying a bad UY a reasonable option just on price alone but there are some exceptions like for the resorts that finding anything is an issue (BCV, VGF, VGC) or for VB/Aulani subsidized. Still given that where a good UY can be predicted, I'd lay that a $10 or more PP swing, less so when one will travel fairly evenly throughout the entire year. Again, when there isn't a good UY, DVC is inherently more risky and at times, an unreasonable purchase with otherwise similar parameters. The other issue is to have enough points where one isn't working with a boatload of banked/borrowed points routinely. Trying to do so also increases risk and is compounded by a less than good UY. Put another way, a bad UY AND working with a lot of banked/borrowed points likely increases risk as much as 2-3 years worth of points or more depending on one's personal situation.

 

[wings91]

I just purchased 250pts SSR with 2017 banked and all 2018 point available June UY. I paid $95/pt, less than what DVD was buying unloaded contracts back for. I think 95/pt was average to slightly lower than was DVD was allowing to pass at this time.

 

[mustinjourney]

I'd value the 2016 points at about $5-$6 a point and the 2017 points at $10 a point.

If you plan on using the 2016 points, keep in mind you'll likely have to use them on 1BRs and most likely have to do some type of split stay. This happened to me 2 years ago (and I started the process in May of that year). By the time August rolled around and the points were in my control, I was forced into booking one day at a time and pieced together a 4 night stay. It was just me and DW, so it wasn't too bad moving around so much...but it's certainly not ideal. Being homeless everyday until 4 pm is not great.

One thing you might be able to do with those points is get a bungalow for a night or two depending on how big the contract is. Those are usually available.