How much of a premium does a small contract warrant?

[Salf777]

So I was hopefully waiting on buying additional points at VGF when the new building starts being sold. Just wanted like 50 extra points. But addonitis hit hard after a trip last week. I found a small BLT contract with 50 points and my same use year. In addition 2021 points were banked so it has 100 points for 2022. I made an offer and it was accepted it was accepted at quite a bit less than I see other small contracts listed for (many say full price offer only) but a bit more expensive than 200 plus point contracts.
Here’s my thought process (I know I will get a bunch of differing opinions).
we go to Disney during the week at slower times and only do studios. Just 2 of us
with the new VGF going up and 200 more studios MAYBE it will be possible to get a studio at the 7 month mark
If we can’t get VGF, BLT is a great property and a monorail resort.
plus we can always book BLT at 11 months and waitlist VGF
its really, in my opinion a good contract and I’m very happy with it (if it passes ROFR) so I am not have any regrets or second thoughts just was curious as to what a small contract premium you think is fair.
Also, it’s from an international seller and the broker claims that Disney usually doesn’t buy back contracts from foreign sellers? Has anyone ever heard of this? I don’t understand the logic behind that statement

 

[Sandisw]

They pretty much do not buy from international sellers, so you are probably safe there,

I do think VGF studios in the new buildings will be there at 7 months, outside of fall frenzy. I also think BLT is a great back up.

I am not sure that smaller contracts will always be that much higher but the big piece is that it doesn’t take a lot of extra to pay more,

For example, $10 more a point on a 50 point contract is only $500 extra total. Not enough to bulk at paying more, especially if it fits your needs.

I keep going back and forth but most likely will buy 50 points for VGF for trips every other December so I can book at 11 months. BLT is a great second choice and I’d consider that too, but don’t want resale and BLT direct price makes no sense…even though I will be paying similar for VGF! Lol

 

[kandlsutton]

When I asked the about the premium for small contract, my broker at DVCResaleMarket responded with 10%. Consider the source - IMO the number of points available in each UY plays a big part. You aren’t really getting those banked points for ”free”…

 

[Salf777]

When I asked the about the premium for small contract, my broker at DVCResaleMarket responded with 10%. Consider the source - IMO the number of points available in each UY plays a big part. You aren’t really getting those banked points for ”free”…

I don’t understand your response “getting those banked points for free”. I never mentioned I thought they were “free”. I actually said I thought it was a good contract and was happy. I was happy with the price for a 50 point contract. Explain please I feel I’m missing a valid point you may be making

 

[BWV Dreamin]

They pretty much do not buy from international sellers, so you are probably safe there,

I do think VGF studios in the new buildings will be there at 7 months, outside of fall frenzy. I also think BLT is a great back up.

I am not sure that smaller contracts will always be that much higher but the big piece is that it doesn’t take a lot of extra to pay more,

For example, $10 more a point on a 50 point contract is only $500 extra total. Not enough to bulk at paying more, especially if it fits your needs.

I keep going back and forth but most likely will buy 50 points for VGF for trips every other December so I can book at 11 months. BLT is a great second choice and I’d consider that too, but don’t want resale and BLT direct price makes no sense…even though I will be paying similar for VGF! Lol

Well we want what we want……LOL.

 

[kandlsutton]

I don’t understand your response “getting those banked points for free”. I never mentioned I thought they were “free”. I actually said I thought it was a good contract and was happy. I was happy with the price for a 50 point contract. Explain please I feel I’m missing a valid point you may be making

All I meant by the statement is that contracts with banked points are typically listed much higher than those without banked points and, depending on the contract and how its marketed, can be misleading. I always compare contracts by determining the cost per point over the entire contract length (cost/total points on contract) and usually the stripped contracts come out with a lower $/pt.

I like the smaller contracts so I can get home resort booking windows and DH and I do like split stays. I have a 75 pointer at PVB (was loaded with 2020 points) and a 55 pointer at VGF (only 7 points for 2021) and got both for $175pp in the last 3 months. Thought I paid too much for Poly, but both are looking like pretty good now.

Apologies if my response implied anything negative about your post. It was a general comment about how some brokers market the loaded contracts. You won’t have to pay maintenance fees on the banked points but the $/pt comes at a premium. Wishing you luck on ROFR!

 

[Salf777]

All I meant by the statement is that contracts with banked points are typically listed much higher than those without banked points and, depending on the contract and how its marketed, can be misleading. I always compare contracts by determining the cost per point over the entire contract length (cost/total points on contract) and usually the stripped contracts come out with a lower $/pt.

I like the smaller contracts so I can get home resort booking windows and DH and I do like split stays. I have a 75 pointer at PVB (was loaded with 2020 points) and a 55 pointer at VGF (only 7 points for 2021) and got both for $175pp in the last 3 months. Thought I paid too much for Poly, but both are looking like pretty good now.

Apologies if my response implied anything negative about your post. It was a general comment about how some brokers market the loaded contracts. You won’t have to pay maintenance fees on the banked points but the $/pt comes at a premium. Wishing you luck on ROFR!

First off no offense taken from your post, I was unclear and felt you were trying to say something important and I wanted to understand, Yes I completely agrees with you, the brokers list the contracts as "double points" making it seem like your getting a better deal. I was happy with the price per point and even made the same offer to a different broker on a contract with the same amount of points that didnt have the 2021 points banked and the same use year and the broker told me no. So in getting this one I was happy with the contact and price even if it didnt have the banked points, so Im glad the other broker said no. I am nicely below what one broker has several small BLT contract listed with a "full price offer only" on them. In the end to me, if I end up paying minimally more than someone else paid I dont care as long as I enjoy the use.
So thank you and no offense taken at all! Appreciate your input

 

[Bjaiken77]

To me, a small contract doesn’t demand much of a premium. A lot of them get so close to direct that it’s hardly worth it. Plus, saving a few bucks on a 50 point contract doesn’t mean that much to me. Those savings matter more on a 300 point contract because they add up. For me, I’ll just go direct. No hassle or headaches.

 

[kandlsutton]

To me, a small contract doesn’t demand much of a premium. A lot of them get so close to direct that it’s hardly worth it. Plus, saving a few bucks on a 50 point contract doesn’t mean that much to me. Those savings matter more on a 300 point contract because they add up. For me, I’ll just go direct. No hassle or headaches.

Depends on the resort. I saved over $10k vs. direct on my 75 points at PVB and 55 points at VGF. Worth the wait for me…

 

[Deb & Bill]

We are considering selling our DVC points and contacted a reseller. He told us our larger OKW contract (175 points) could be listed for about $126 per point with a possibility of selling it for about 95% of the asking price. He said our 50 point OKW contract could be listed for full price only at $142 per point.

 

[sethschroeder]

usually the stripped contracts come out with a lower $/pt.

Actually always found it opposite but I value it based on the true value of the points.

Stripping a contract is always the best way to make the most money before selling it IMO.

You might see a $4-$7 point swing in cost but the points are worth $13-$17/point.

So by "overpaying" by $5 possibly for the two years points and covering a $7-$8 MF yearly you essentially bought the previous years points for $9.50-$11.50\point which you could easily turn around and rent if you wanted for a profit.

 

[sethschroeder]

I would worry less about the premium and more about all up math. What about buying more points or does just going direct make more sense.

The cost per point premium has no real relevance since you could compare pricing to large 1000 point contracts but it's a useless exercise unless you plan on eventually buying 1000 points in the next couple years.

 

[The Jackal]

To me, a small contract doesn’t demand much of a premium. A lot of them get so close to direct that it’s hardly worth it. Plus, saving a few bucks on a 50 point contract doesn’t mean that much to me. Those savings matter more on a 300 point contract because they add up. For me, I’ll just go direct. No hassle or headaches.

There are some people who want to just own less than 150 points. In order to do this right now it has to be purchased resale. If you are not already a DVC member you cannot purchase less than 150 points. This causes contracts under 150 points value to go up. There is strong demand for these and not much supply. Someone who is planning to go for 3-5 days a year, does not need the blue card benefits for AP. It probably won’t be long you’ll see tiny 25-35 point contracts going for over direct pricing if DVC keeps raising minimums.

 

[Sandisw]

There are some people who want to just own less than 150 points. In order to do this right now it has to be purchased resale. If you are not already a DVC member you cannot purchase less than 150 points. This causes contracts under 150 points value to go up. There is strong demand for these and not much supply. Someone who is planning to go for 3-5 days a year, does not need the blue card benefits for AP. It probably won’t be long you’ll see tiny 25-35 point contracts going for over direct pricing if DVC keeps raising minimums.

And, unless DVD steps in, ticketing is giving the Sorcerer pass to all DVC so right now, even that is not a reason to go direct.

 

[RobDoc]

Supply and Demand.

There are LOT of buyers looking for contracts <50pts. By pricing them a little higher (10%) with the "Full Price Only" warning, the seller benefits by not having to deal with lowball offers and will get the higher amount. The demand is high whether they are stripped contracts or fully loaded - although the loaded contacts will commend a higher price.

As noted above by @sethschroeder, stripped contracts have already added value either by using the points personally or by renting/transferring the points to others. The difference between the rent/transfer price and the resale price should make the resale profit better for the seller than waiting until the contract is fully loaded.

$0.02

 

[kanerf]

Working on a 51 pointer at BWV for $165/pt and a 25 pointer at BLT for $175/pt. Both a bit more than I wanted to spend, but not bad at today's going rates.

 

[Salf777]

There are some people who want to just own less than 150 points. In order to do this right now it has to be purchased resale. If you are not already a DVC member you cannot purchase less than 150 points. This causes contracts under 150 points value to go up. There is strong demand for these and not much supply. Someone who is planning to go for 3-5 days a year, does not need the blue card benefits for AP. It probably won’t be long you’ll see tiny 25-35 point contracts going for over direct pricing if DVC keeps raising minimums.

Thanks this is probably the best explanation of why small points tend to trade for more. I just couldn’t understand why and this makes sense. I am a Florida resident so I can buy any annual pass and bought a small contract as we drive up from south Florida and go during the week at slow times so a small point contract gets us the nights we want to stay. I ask because we just had an offer accepted on a small BLT contract that we figure we could get a decent number of nights in a studio once a year. With our other small VGF we go twice a year and stay in 2 great resorts so we are happy just never understood the small point premium

 

[Ruttangel]

Once you add in closing costs some small contracts can be cheaper to rent than buy.

 

[CanadaDisney05]

I just bought a 50 point add on direct. When i looked at the resale sites, the cost savings on 50 points just didn't seem worth the hassle, and the inability to use the points at Riviera/new disneyland tower. Plus between lower closing costs, and prorated current yesr annual dues, the difference was pretty small

 

[mustinjourney]

Once you add in closing costs some small contracts can be cheaper to rent than buy.

Renting is a hassle though every year. Having control over the reservation is worth quite a bit to many.