How do you evaluate resale contracts and what to offer?

[3littlecuties]

I've seen the ROFR listings that show the pending contracts so that gives me an idea of what points are selling for right now at each of the resorts. But of course it varies and it also depends on how many points are currently available. How do you evaluate contracts in order to determine which one to make an offer on? Also, how much below asking is acceptable to offer? I know when buying a house, a realtor can give you an idea of how much homes are going for in the area (i.e., contract price as a % of asking price). Does that apply here?

We've seen a few contracts for sale that have been sitting there for a long time. Are they just overpriced? What makes one contract sell and another not?

 

[Dean]

I've seen the ROFR listings that show the pending contracts so that gives me an idea of what points are selling for right now at each of the resorts. But of course it varies and it also depends on how many points are currently available. How do you evaluate contracts in order to determine which one to make an offer on? Also, how much below asking is acceptable to offer? I know when buying a house, a realtor can give you an idea of how much homes are going for in the area (i.e., contract price as a % of asking price). Does that apply here?

We've seen a few contracts for sale that have been sitting there for a long time. Are they just overpriced? What makes one contract sell and another not?

Adjusting between different contracts of a given home resort isn't difficult. Adjusting for extra or missing points isn't that difficult once you get a grasp on the underlying issues. To keep it simple, here's the way I look at it.

• I'd deduct $10 per point for each current or future UY point that's not present
• I'd add in $5 pp for any dues you aren't paying because the $10 per point includes dues.
• I'd consider an adjustment for any banked points that one isn't paying dues on depending on specifics.
• I'd consider reducing the value of the current UY points by a factor related to how soon they expire and whether you'll be able to use them. Say 1/12 for each month that's likely to have passed by the time you have control of the account, esp if it's later in the UY.

Let's take a 100 point SSR contract that's loaded and has a Dec UY with all 2015 & 2016 points plus all 2014 points banked into 2015 done now. The total cost will be roughly $90 per point plus closing ($500) and likely reimbursed dues ($500) or $10000 roughly in this example. We'll assume the banked points balances out for the lost 5 months of the UY. We'll compare to a contract with no points until 2017 but the same size, home resort and UY. Using the same cost pp of $90 but adjusting downward for the points not present should yield a comparative value of $8500. That's a reduction of $500 for the 2015 points not present and $500 for the $2016 points not present but it does assume no fees reimbursement at closing and the seller pays the 2016 dues as part of the closing the other $500 per UY. All assume buyer pays closing.

You can vary the numbers as you wish but this will give you an idea of how each contract compares to others at the same resort. As a rule stripped contracts are not discounted as much as this formula suggests they should be thus a loaded contract (all points plus banked points) is usually the best value all else equal. Of course there are other considerations including time and how difficult a specific option is going to be to find. Another approach is to think if you rented out all points from the current and next UY subtracted from your total costs over that time which is in effect the same thing.

 

[aymekae]

On the flip side, we recently listed our contract for sale, and I chose the list price based on the broker's recommendation. I'd like to sell sooner than later, so I listed it below the bottom of the market. I would accept an offer for lower, but I didn't want to instantly devalue everyone else's contract on the market, and it gives the buyer some room to negotiate and get a good deal.

 

[pinklotusflower]

I looked at the rofr thread at which contracts passed and decided what contract I was willing to go for, in the end decided against stripped contracts, once I found a contract I offered less than I was willing to pay and the counter offer was what I was happy to pay.

http://www.disboards.com/threads/rofr-thread-september-december-2015-please-use-new-thread.3448024/

 

[pmaurer74]

When we were looking there were very few contracts on the market for the resort we wanted... now there are dozens. I am glad we did not wait because the price is also higher. I was watching daily for listing updates so when a contract appeared for the resort, u/y and points I wanted I offered $5 less than asking and we settles for $2 less than asking. 2015 Mfs were already paid so that meant a lot to us. By the time the contract closed we were 1 month from getting the current year's points.

the smaller contracts tend to sell faster and the larger ones can sit. Stripped contracts can also sit for awhile.

 

[icc2515]

Hi,

What to offer really depends on what you can afford to pay. I really think that there are some desperate or delusional people out there selling. Look carefully at the contracts. Make sure that anything you want to buy have points banked and all the points for the current or next UY avail. I see contracts right now for BLT with all points used tilll 2018. They are asking $2 per point less than contracts with full banked points and all future points. That is like leasing a car and the dealer telling you that you cannot drive it for the first 2 years.

If the contract is in line price wise with the other contracts listed I will offer $10-$15 less per point and see where it less from there. I would not expect to get it for that price. You can usually get it for about $7 less per point.

The important thing to remember is; you do not want to get it for too good a deal or Disney will take it. I have read about people on here having 3 or 4 contracts in a row taken by Disney. If you want to get the contract look at the ROFR thread and see what is passing ROFR.

Good luck.

 

[lorenni]

A contract may also look good if you want a specific use year at a specific resort. I made lower offers for a few contracts over the last 6 months and the sellers turned them down. But eventually I saw a contract listed for my use year and the right number of points, and not stripped and not loaded (I can't use the points this year, so a loaded contract does me no good - I have no interest in renting), so I made a full price offer and it was accepted and went to ROFR that same day. Offering a few bucks less than the asking price was going to potentially save me all of a few hundred bucks. Not much in the grand scheme of things, and I just wanted the contract bought and done. So it was worth those few hundred dollars to me.

Frankly, if you get hung up on a few hundred bucks, DVC may not be for you. You'll find that DVC will cost you a few extra hundred bucks here and there in so many ways.

 

[crisi]

A contract may also look good if you want a specific use year at a specific resort. I made lower offers for a few contracts over the last 6 months and the sellers turned them down. But eventually I saw a contract listed for my use year and the right number of points, and not stripped and not loaded (I can't use the points this year, so a loaded contract does me no good - I have no interest in renting), so I made a full price offer and it was accepted and went to ROFR that same day. Offering a few bucks less than the asking price was going to potentially save me all of a few hundred bucks. Not much in the grand scheme of things, and I just wanted the contract bought and done. So it was worth those few hundred dollars to me.

Frankly, if you get hung up on a few hundred bucks, DVC may not be for you. You'll find that DVC will cost you a few extra hundred bucks here and there in so many ways.

This.

Remember that a contract may get several offers on it. If you are picky about resort, use year, and number of points, and want the process to go fast, you don't want to make a rock bottom offer. If you have plenty of time and are flexible, you can save yourself a few hundred dollars. But a few hundred dollars isn't huge in the whole scheme of DVC or Disney vacations.

 

[hayesdvc]

In keeping with what crisi stated, one thing I learned on my initial contract when I thought I negotiated a great deal to save a few hundred dollars in the short term, all I did was negotiated a great deal for Disney as they took the contract that I wanted (ROFR).

 

[ldo]

I valued current points that I did not have to pay maintenance fees on at $5. I also offered full price ($81) b/c it was the perfect size and UY and if I subtracted out $5, $75 was slightly lower than other contracts that were stripped ($76-78). I wanted points soon to book before 7 mths and I was at 10.5 mths out. DVC was also exercising ROFR and so I knew that $81 with current would likely fly vs. $75 stripped.

 

[luvdisneyland]

A contract may also look good if you want a specific use year at a specific resort. I made lower offers for a few contracts over the last 6 months and the sellers turned them down. But eventually I saw a contract listed for my use year and the right number of points, and not stripped and not loaded (I can't use the points this year, so a loaded contract does me no good - I have no interest in renting), so I made a full price offer and it was accepted and went to ROFR that same day. Offering a few bucks less than the asking price was going to potentially save me all of a few hundred bucks. Not much in the grand scheme of things, and I just wanted the contract bought and done. So it was worth those few hundred dollars to me.

Frankly, if you get hung up on a few hundred bucks, DVC may not be for you. You'll find that DVC will cost you a few extra hundred bucks here and there in so many ways.

Totally agree! I was selling a small 50 point contract and the buyer wanted to go back and forth over $1.. really? Either they are just playing games and need to win, or $50 is a big deal to them, in which case they probably shouldn't be purchasing DVC. In any case, I sold it the same day to a different buyer...