Looking for help with resale pricing as the Buyer

[Kid_@_50]

First, let me start by saying that in the last 30 years, I have bought 8 and sold 7 primary residences, secondary residences and investment properties. I believe I have a basic grasp of real estate fundamentals. (A perhaps unrelated thought is I am not sure real estate fundamentals apply to the DVC timeshare market.)

Maybe it is just lag as the resale prices continue a downward trend. There seems to be a growing delta between recent postings on what has passed ROFR with new listings offered for sale.

If I was going to buy a new primary residence that 2 years ago might have sold for $400,000 but currently is listed for sale at $280,000. I would not think gee I must be getting a deal. I would look at the current comparable resales and see that they all sold for less than $280,000 and make my offer much lower on the assumption that prices will continue to fall.

There seems to be a $15 to $20 or more difference in current asking prices for sale and the most recent sales that passed ROFR. Some of this might be differences in stipped vs loaded contracts.

I don't feel like wasting my time, the real estate broker's time (who is serving in a dual agent's role) and the seller's time by offering $15 or $20 less per point than I think the contract is worth (based on the most recently posted listings that passed ROFR)

I would appreciate any thoughts either as a response to this post or in a pm.

Thanks.

John

 

[Raising Disney Princesses]

I am not sure I understand what you are saying. If you can make an offer for $15 to $20 less than you think the contract is worth then that would be a great deal for you....right? The difference between asking and selling is the negotiation. You can negotiate a lower price if there are no banked or few current points than if all the currrent points are there and there are banked points.

 

[DVC Dude]

What resorts are you interested in?

You can get good deals on SSR, OKW, HHI, adn VB, but not as great on the other resorts.

A loaded contract is usually worth $20pp more than a stripped contract.

 

[JimMIA]

I agree with your analysis, as far as it goes, but I think you have to understand that reports on the ROFR thread are only a small subset of actual sales. I also think low ROFR clearances are much more likely to show up on the ROFR thread, and actual ROFR's are less likely to be reported.

Wdrl has a thread that shows monthly sales and ROFR's in the aggregate, but I'm not sure you would be able to determine ROFR levels for an individual resort from that thread. What you can determine is which resorts are more, or less, likely to be ROFR'd. Currently, I don't think there has been much ROFR activity except for BCV.

To me, the best publically-available information without a lot of research is the "Sale Pending" listings on the Timeshare Store site.

The most accurate source of info on actual sales would be looking at recent deed recordings on the Orange County Controller site and doing the math, if those deeds show the full price. (that's the source of wdrl's info)

Filings on the tax collector's website might show actual prices. That info is public record in Florida. The other thing to be wary of with any public record filing is the currency of the posting. Some counties run 2-3 months behind in entering filed deeds into their databases.

The most straightforward method of arriving at a realistic offer price, IMHO, would be to just ask the resale broker. They see offers and sales every day, and should be able to give you an idea, although they may have no idea whether an individual seller will accept any particular offer. Some sellers are eager to sell and others don't care if they wait an extended period, or never sell a contract.

I think your concern about your offer price is well-founded. I recently sold one contract and I had a number of offers from people who I thought were bottom-fishing. I didn't even counter-offer, and wouldn't have responded to some of the offers at all except for respect for the resale broker's position. I had one offer about $10 lower than my asking price, and I declined with no counter. That same seller came back at about 50 cents under my asking price and I again declined because I thought they were either not a serious buyer or they didn't really have the money to buy. I thought they would be more trouble than they were worth as a buyer and I refused to deal with them.

Good luck with your search!

 

[nolanboys]

We worked with **** **** at ***************. They have a good grasp of what contracts are going for and what will pass - although it seems everything is passing now. On their website, they also have an rofr section that lists what contracts have passed and what haven't. You may want to give that a look. We bought a 200 point SSR contract in April that was loaded - 184 2009 pts, all 200 for 2010 for $68/pt. Prices have gone down, so you could probably save $5-$8 on similar contracts. Take your time and research and you could get a great deal on a contract.

 

[Anthony1971]

As Jim said if you make somone a low ball offer or what you think it is worth they may not respond at all... Just as you may have done in the past.

With that said you should not look at DVC as Real Estate it is a prepaid vaction and should be treated as such. If you are planning on buying and using it for a few years or even 5 or so years you may get burned when you try to sell.. you may also make money... No one can predict future value on a timeshare as with a house. A house is a need a timeshare is a luxury.
Disney has some great deals on vacation pacakages that should make anyone but those in it for the long haul think twice about buying DVC.
The point is DVC is better bought if you intend to keep for its remaing years.

 

[Deb & Bill]

When we sold a few of our contracts, most of the time we had offers close to what we were asking and we usually met in the middle. We did have a few lowball offers that we countered with our asking price. We didn't knock anything off the asking price.

The member who is selling knows what they want and how low they will go. To offer $15 to $20 under what they are selling it for is lowballing it. I'd tell you to take your offer and find another seller.

 

[Plutofan]

Having bought several DVC contracts I personally am not as concerned about the price I pay for the points as much as getting contracts with extra banked points. I would rather pay a higher price and get a resale contract with a lot of bank points than paying a lower price for a contract with a small amount of points. Typically the rental value of banked points is not factored fully into the asking price.

 

[Sandisw]

My feeling on this is that you should offer a price for a contract that you feel is the right price for you.

If that is quite a bit lower than the asking price, so be it. You may get lucky and get an owner who is in a position to sell it to you at that price.

I know that if I was selling a contract, I would price it at what the broker felt the going price was and go from there. I think having a seller accept a such a low offer really depends on the particular situation.

For example, if the contract had been for sale for 6 months and no bites whatsoever, I might end up taking the lowball offer just to be done with it. However, if I was selling and in no hurry, I would not.

By the same token, put yourself in the shoe of a seller. How would you feel if you had a contract listed and someone offered you much less? Would you even entertain it? I know people who have sold houses who became insulted when someone offered them a lowball figure. I personally don't understand why. Everyone wants to get the best deal they can and my feeling is it never hurts to try.


Wtih the way negotiations go with resales, at least in my experience, things are done via the phone or email and then once a deal is struck, the paperwork is done so I don't see it being a complete waste of anyone's time.

Good luck!

 

[Jason@dvcstore]

First, let me start by saying that in the last 30 years, I have bought 8 and sold 7 primary residences, secondary residences and investment properties. I believe I have a basic grasp of real estate fundamentals. (A perhaps unrelated thought is I am not sure real estate fundamentals apply to the DVC timeshare market.)

Maybe it is just lag as the resale prices continue a downward trend. There seems to be a growing delta between recent postings on what has passed ROFR with new listings offered for sale.

If I was going to buy a new primary residence that 2 years ago might have sold for $400,000 but currently is listed for sale at $280,000. I would not think gee I must be getting a deal. I would look at the current comparable resales and see that they all sold for less than $280,000 and make my offer much lower on the assumption that prices will continue to fall.

There seems to be a $15 to $20 or more difference in current asking prices for sale and the most recent sales that passed ROFR. Some of this might be differences in stipped vs loaded contracts.

I don't feel like wasting my time, the real estate broker's time (who is serving in a dual agent's role) and the seller's time by offering $15 or $20 less per point than I think the contract is worth (based on the most recently posted listings that passed ROFR)

I would appreciate any thoughts either as a response to this post or in a pm.

Thanks.

John

Questions

1) Which resort do you want to own?
2) How many points do you want to own?
3) How quickly are you looking to use your membership?

Thanks,
Jason

 

[taaren]

If someone is low-balling you, they may be serious but just offering what they can. Here's our story as an example:
My husband and I received some cash gifts for our wedding a month ago, and decided we wanted to use some of it on an add on contract at our home resort. Last year we wanted 260 points could only afford 200. So 15 months later we went shopping for an additional 60 point contract, saw one that was close (75) though it was stripped. Made an offer about $10/below asking, they countered, we told them we only had "x" amount of cash to spend including closing. And they accepted for whatever reason, everybody walked away happy. End result it was about $15/pt lower than most sales at our home resort.
If the sellers had refused we would have waited for a contract with 10-15 fewer points that fit our budget better. People don't have unlimited means, so yes, we're all trying to get a good deal. But try not to be insulted. Disney people, particularly DVC people, tend to be a nice lot. =)

 

[mlayton14]

The real question in this equation isnt what is a fair price, its how long you are willing to wait to get the price you want. Given your experience you know "Fair" has nothing to do with anything .. How much time waiting would saving $1000 be worth to you, $2000, $5000?

If you lowball someone and they dont respond, or dont counteroffer, who cares? Just try again until you get what you want or dont want to wait any longer.

With this being said, there are obvious situations where your leverage is greater than sellers and vice versa .. resort choice, number of points, points included, etc.

Generally speaking the large resorts are ripe for negotiation, while BCV and strict use year/points inclusions, etc will reduce your negotiating power.