Low resale contracts

[sethschroeder]

For whole family vacations, we drive to FL. The below ground parking at Kidani is wonderful when you have a car! Plus that extra bathroom in the 1/2 bedrooms can be a life saver with four kids.

Yup we sold off some BWV and added 300 at RIV and like the idea of the extra bathroom and extra large rooms that are there. Location was part of the main driver though for me.

 

[RoseGold]

Would you bid on these?

I mean, depends on the broker. I've used three, and there are even more than that who are good. But there are also some I wouldn't touch.

 

[Ginamarie]

U have 4 kids as well?? We don't drive normally because the three girls and the wife then hate me. It actually costs about the same as flying between the rental, food and gas to do drive there and obviously it's better to fly then drive for 24 hours straight. We only do that for Christmas when flights cost too much. We actually stay at AKV in 2 weeks for the 1st time so we will get to see what it is like. Jambo value studio

Yup- one girl and three boys here. It’s 16-18 hours to drive for us, so driving usually saves us some money and we like having our car so that we can get groceries and stop at the outlet mall (and after stopping at the outlet I need more space than my luggage may allow- lol).
I will just miss you at AKL! We are staying at Jambo 1/6 and then Kidani from 1/7-1/11.

 

[disisit]

I recently saw some resale contracts that almost seem too low. BWV 100 pts for $118 pp and AKV 100 pts for $108 pp. Is it possible that they would sell that low? It almost seems like it would be a waist of time beginning the process just for them to be taken by Disney. Would you bid on these?

You can look at rofr reports and always offer a few dollars more. On a 100 pt contract if you offer 2 or 3 dollars more its only 200 or 300 dollars
It is a one time expenditure to guarantee getting what you want. Seems worth it to me

 

[havoc315]

Ultimately, it's free market at work. Disney is only going to grab a contract if they can turn around and sell it, and/or it's going "below market value."
So sure, Disney would exercise refusal if there was 1 AKV contract for $102 per point, and all the others going through the system were $125...
But when you have a flood of low cost contracts, most will get through.

I have to imagine that there is increased re-sale supply and decreased demand. International owners have no idea when they will actually be able to use their points again, it could still be a couple more years. And even domestically, you have plenty of people who aren't ready to go to Disney right now, so they may be looking to sell. Meanwhile, the buying market has to be soft.... buying something that you don't really know when you will be able to use.

It's basically a great time for current owners to add extra points with a re-sale contract... Or even for an educated new buyer, who can be patient and think long term.

 

[Bing Showei]

Ultimately, it's free market at work. Disney is only going to grab a contract if they can turn around and sell it, and/or it's going "below market value."
So sure, Disney would exercise refusal if there was 1 AKV contract for $102 per point, and all the others going through the system were $125...
But when you have a flood of low cost contracts, most will get through.

I have to imagine that there is increased re-sale supply and decreased demand. International owners have no idea when they will actually be able to use their points again, it could still be a couple more years. And even domestically, you have plenty of people who aren't ready to go to Disney right now, so they may be looking to sell. Meanwhile, the buying market has to be soft.... buying something that you don't really know when you will be able to use.

It's basically a great time for current owners to add extra points with a re-sale contract... Or even for an educated new buyer, who can be patient and think long term.

Negative.

With Disney taking contracts that are “below market value,” brokers setting prices based on this data then pointing this out and telling buyers they won’t pass ROFR, and buyers paying “a little more than I want to” because they hope the Mouse passes on their contract, it’s the exact opposite of a “free market at work.”

It’s Disney saying “this is what the contract is worth.”

A free market will determine prices based on what the market will bear. Looking at the ROFR thread, BWV was worth $95 dollars to one seller and buyer. That’s what the market would bear. BCV was worth $110 to one seller and buyer. Again, that’s what the market would bear.

But that’s not market value because Disney says it’s not. This past year it suddenly became known that nothing below $100 was passing at SSR. So SSR started going up. AKV was suddenly worth a lot more than where the market had priced it when Disney started grabbing more and more of it.

It’s a Disney effected system where both direct pricing and ROFR, which Disney controls, intended or otherwise, effects pricing. This nothing like a free market.

 

[sethschroeder]

A free market will determine prices based on what the market will bear. Looking at the ROFR thread, BWV was worth $95 dollars to one seller and buyer. That’s what the market would bear. BCV was worth $110 to one seller and buyer. Again, that’s what the market would bear.

To clarify though it's worth more the seller was just not informed.

If someone sold a new Lambo for $10k that's not the actual market just a dumb seller.

Disney being able to ROFR and then add benefits back to the points does muddy the water though. We really didn't see a huge shift though when Disney was not doing ROFR at all over the summer it seemed.

 

[Bing Showei]

To clarify though it's worth more the seller was just not informed.

If someone sold a new Lambo for $10k that's not the actual market just a dumb seller.

Disney being able to ROFR and then add benefits back to the points does muddy the water though. We really didn't see a huge shift though when Disney was not doing ROFR at all over the summer it seemed.

I don’t know if you’ve bought or sold resale recently, but the broker plays a big role in how a buyer/seller enters the marketplace. And a lot of how they position both parties are based on ROFR.

Some brokers are more willing to allow buyers and sellers come to an agreement, others are less so. Of the contracts listed above the BCV has a unique enough point distribution that I tracked it down to one of the bigger resale operations. Asking was $142. Clearly the broker informed them what the value of the contract was, but as the seller, they decided $110 is what they’ll settle on.

Accepted prices sent for ROFR is where the free, open market ends and where the Disney effected market begins. The process of buying a Disney contract may start in the former, but lives squarely in the latter. It’s not all that muddy.

ETA correction for resale price asking.

 

[havoc315]

Negative.

With Disney taking contracts that are “below market value,” brokers setting prices based on this data then pointing this out and telling buyers they won’t pass ROFR, and buyers paying “a little more than I want to” because they hope the Mouse passes on their contract, it’s the exact opposite of a “free market at work.”

It’s Disney saying “this is what the contract is worth.”

A free market will determine prices based on what the market will bear. Looking at the ROFR thread, BWV was worth $95 dollars to one seller and buyer. That’s what the market would bear. BCV was worth $110 to one seller and buyer. Again, that’s what the market would bear.

But that’s not market value because Disney says it’s not. This past year it suddenly became known that nothing below $100 was passing at SSR. So SSR started going up. AKV was suddenly worth a lot more than where the market had priced it when Disney started grabbing more and more of it.

It’s a Disney effected system where both direct pricing and ROFR, which Disney controls, intended or otherwise, effects pricing. This nothing like a free market.

You've over-estimated Disney's influence. Yes, it's not 100% free market, because they do help to set the floor. But they refuse only about 1% of contracts.
They simply go buy the absolute cheapest, which is being set by the market.

If they really wanted to prop up the market and override the free market, they would have to currently refuse half the proposed contracts. Would prices drop even more in an absolutely free market? Yes, certainly. But for example, not long ago, the cheapest prices you could get AKV points for was about $120 per point.. cheapest BLT was $145+ per point...
BLT is now passing ROFR in the 130's, AKV right around the $100 mark.

So chicken or egg, which came first? Did Disney "decide" to lower the resale price, and THEN the resale prices dropped?
OR... what actually happened -- prices kept dropping and dropping, so Disney kept dropping their ROFR price.

 

[Sandisw]

To clarify though it's worth more the seller was just not informed.

If someone sold a new Lambo for $10k that's not the actual market just a dumb seller.

Disney being able to ROFR and then add benefits back to the points does muddy the water though. We really didn't see a huge shift though when Disney was not doing ROFR at all over the summer it seemed.

I have to disagree with your assessment because if a seller and buyer agreed, the seller felt it was a fair price.

It’s not up to anyone else to decide what makes sense and to be honest, not nice to call them a dumb seller because what they got worked for them.

ROFR and Disney direct plays a huge role in the market value IMO, and contracts like SSR have crept up recently because of it.

Buyers who get rejected a few times, and want to own, are willing to spend an extra $$ to make it through.

 

[E2ME2]

Possible yes but sure hoping not, lol. 3 kids getting braces in 2021 on top of another one who already has them on from this year. Don't want to have to get a mortgage on the house for braces and dvc

Too many kids, not enough DVC !!
I remember those years, all to well

 

[gskywalker]

I have 2 contracts pending ROFR right now. I don't expect either to pass but I can hope and eventually when one does I will be happy. 270 pts AKV for $92 a point, full points. 250 BLT $130 a point with fully banked points. Of course if both pass.....gulp

Another one bites the dust. Disney took 250 point BLT contract

 

[sethschroeder]

seller felt it was a fair price.

Feelings do not dictate the market price. Again a seller could feel good about selling a new Lambo for $10k that does not make it the market price.

not nice to call them a dumb seller because what they got worked for them.

What do you call someone who threw away 5/10/15% of value? Its not even a tradeoff on how long the contract is going to sit in many cases. Also if the reason was because the seller needed money in 90 days vs 110 days that would be more of a situation of a distressed sale below market value that market value. I would say the actual market value would be the price of a contract that will sell within 30 days after everyone trying to buy looks at it. Not basically instasales on the first morning at 4:01 am.

ROFR and Disney direct plays a huge role in the market value IMO, and contracts like SSR have crept up recently because of it.

Completely agree as all the lower end price point contracts are getting bought. SSR and others though didn't really drop substantially that I could remember even when ROFR was not happening we just had a couple more stories of these extremely underpriced contracts sneaking through.

I would also say some of the drop in market price from April/May was partly due to short sales by sellers (I was one of them that took slightly less on two contracts, still made a profit from when I had bought them both in Oct/Nov 2019 though).

 

[sethschroeder]

I don’t know if you’ve bought or sold resale recently, but the broker plays a big role in how a buyer/seller enters the marketplace. And a lot of how they position both parties are based on ROFR.

That is because the broker is a sales person trying to make money in lots of cases. I had a broker in early July talking about pricing on one of my offers I made and how Disney would not let it through (when they hadn't done an ROFR in months). Its a simple scare tactic to up the price a little and get some more money out of the contract with no extra work.

Clearly the broker informed them what the value of the contract was, but as the seller, they decided $110 is what they’ll settle on.

Well some of the Brokers do instant sales as well though and don't inform people the true value if they are willing to just sell it to them cheap instead. Then the broker can use it to rent out or flip for a larger profit.

Accepted prices sent for ROFR is where the free, open market ends and where the Disney effected market begins. The process of buying a Disney contract may start in the former, but lives squarely in the latter. It’s not all that muddy.

Disney is simply getting a shot to buy each contract at the valuation the seller is willing to do. Disney is not dictating what people sell for. Disney will absolutely take back super cheap deals though because they keep selling the points direct and need to refill the coffers.

 

[Sandisw]

Feelings do not dictate the market price. Again a seller could feel good about selling a new Lambo for $10k that does not make it the market price.



What do you call someone who threw away 5/10/15% of value? Its not even a tradeoff on how long the contract is going to sit in many cases. Also if the reason was because the seller needed money in 90 days vs 110 days that would be more of a situation of a distressed sale below market value that market value. I would say the actual market value would be the price of a contract that will sell within 30 days after everyone trying to buy looks at it. Not basically instasales on the first morning at 4:01 am.



Completely agree as all the lower end price point contracts are getting bought. SSR and others though didn't really drop substantially that I could remember even when ROFR was not happening we just had a couple more stories of these extremely underpriced contracts sneaking through.

I would also say some of the drop in market price from April/May was partly due to short sales by sellers (I was one of them that took slightly less on two contracts, still made a profit from when I had bought them both in Oct/Nov 2019 though).

I call someone who sells something at a price that makes them happy or in a timeline that fits their needs an informed seller. Not everyone cares to get the highest price possible.

Just because you would be willing to hold out for a higher price because that is what is important to you, doesn’t mean someone who doesn’t is any less informed. It means that their goals are different.

I still define market value for what buyer and sellers are willing to pay each other. So sure, there are general ranges and of course, there will be outliers, but outliers for me still play a role in that market value.

 

[sethschroeder]

I think we are talking about different things. I am talking about market value and the outlier contracts that sell within 24 hours of listing.

Not everyone cares to get the highest price possible

I guess but seems foolish again unless its for a very specific reason (its a friend as an example) at which point its not really "market price" since there is caveats to it. Market Price is what we are talking about and not distressed or other type of sales.

Just because you would be willing to hold out for a higher price

So waiting from 4am to 1pm to sell it is holding out? We are not talking about months or even weeks of waiting in most cases (like 98% sell in 30 days with the board sponsor I think it is?). We are talking about some of these contracts that had 15 people inquire and miss out on or contracts that never even hit a website and were already sold.

I still define market value for what buyer and sellers are willing to pay each other.

You can but its not accurate. Market Value is based on what something would sell for in an auction setting not a random sale. Which I also think is missed in the discussion because in an auction setting (if everyone was a level playing field) Disney would also drive up pricing as well as they buy a bunch of points.

 

[Sandisw]

I think we are talking about different things. I am talking about market value and the outlier contracts that sell within 24 hours of listing.



I guess but seems foolish again unless its for a very specific reason (its a friend as an example) at which point its not really "market price" since there is caveats to it. Market Price is what we are talking about and not distressed or other type of sales.



So waiting from 4am to 1pm to sell it is holding out? We are not talking about months or even weeks of waiting in most cases (like 98% sell in 30 days with the board sponsor I think it is?). We are talking about some of these contracts that had 15 people inquire and miss out on or contracts that never even hit a website and were already sold.



You can but its not accurate. Market Value is based on what something would sell for in an auction setting not a random sale. Which I also think is missed in the discussion because in an auction setting (if everyone was a level playing field) Disney would also drive up pricing as well as they buy a bunch of points.

My issue is you said anyone who accepts a lower offer than whatever other have defined as market value is dumb and now called them foolish for doing so. I have sold contracts a good $10 to $15 below what others went for at the time because it met my needs and it wasn’t because I needed to. Bought some that way too.

I simply disagree with that assumption and your definition of auction being what makes things in this case market value. Good thing is we don’t need to agree on that.

IMO, if people have bought BCV from $110 to $150, then that to me is market value...low to high. Again, you don’t need to agree.

 

[E2ME2]

Well some of the Brokers do instant sales as well though and don't inform people the true value if they are willing to just sell it to them cheap instead. Then the broker can use it to rent out or flip for a larger profit.
.

I'm still puzzled about how this happens...doesn't the sale to the broker also have to go through ROFR ??
Please explain how a broker can "flip" a DVC Contract.

 

[sethschroeder]

I'm still puzzled about how this happens...doesn't the sale to the broker also have to go through ROFR ??
Please explain how a broker can "flip" a DVC Contract.

If gets through ROFR then they can flip it for more. If it gets taken by Disney they still make the commission anyways plus the inventory doesn't sit on their site.

 

[sethschroeder]

IMO, if people have bought BCV from $110 to $150, then that to me is market value...low to high. Again, you don’t need to agree.

You are describing the sales price not market value. The point of market value is to describe if the property/product were to be posted for a reasonable number of buyers what is the optimal price you could charge to have said product still be purchased.

Many of these contracts that I would say sell under market value you see in the ROFR thread how the buyer was basically the first to ask to buy it. It was simply under priced so obviously a buyer would buy it. Also to truly get an idea of market value you would need the seller not to be under pressure, examples being foreclosure, bankruptcy, or cash shortage cloud lead to a seller choosing to sell below market value.

By your definition the statement "below market value" could never be a thing because the lowest sales price is just added to the range.

dumb and now called them foolish

Sorry there is legitimate reasons why people sell for less money or purchase for more money. I was aggressive in tone.