Need Advice about Making a Resale Offer

[JoyBelle724]

Hello everyone,
This forum has been so helpful! My husband and I have cash in hand and are ready to start making offers on Resale contracts, but I could really use some advice.

Is it standard to ask sellers to cover the closing costs and annual dues? What about price per point? Is it expected that people will not offer full asking?

I don't want to insult sellers but I also don't want to pay more than what is normal. Some threads here make it seem that negotiation is standard, like buying a house.

I really appreciate hearing peoples' experiences. Thank you!!!

 

[kristenrice]

It's been a while since we bought our resale (in 2008), but as I recall, we were getting a loaded contract. We made our offer in August on a 100 point contract with a Feb UY. The 2008 points had not been banked yet so that was part of our deal. In return, we offered to pay the dues on those points and asked to split the closing costs, which were only $425 total. Looking back, we probably overpaid, but I have no regrets. We bought AKV (Jambo) for $92/point. At the time, DVC was selling AKV direct for $96/point...BUT...they were sold out of points that were "attached" to Jambo house units. At the time we were ready to buy, the points were only selling from Kidani Village units...and Kidani wasn't going to be opening until 2009. That meant that we wouldn't get any 2008 points AND our points couldn't be used until our unit was declared.

In the end, we actually ended up paying a little under $100 MORE by buying resale...but since we got 100 banked points, I was able to rent them to a co-worker for $1000 which made our net savings about $900.

The most important thing is that YOU are comfortable with your transaction. If something doesn't feel right, walk away and look elsewhere. If you find a contract that fits your needs (home resort, UY, price), do not worry about haggling over a few hundred dollars. If that perfect resale becomes available, I would grab it and don't look back. I think paying dues on points that you are getting is fair and closing costs can be negotiated, depending on how much they are charging. Remember that the seller has to pay a commission (usually around 10%) to the broker and I believe that comes off of the sale price of the points, excluding the dues and closing costs. If you ask the seller to cover too much, they may walk away.

Other folks here are far more experienced than me and I'm sure that you will get better advice. I just figured I'd share my thoughts.

 

[Dean]

Hello everyone,
This forum has been so helpful! My husband and I have cash in hand and are ready to start making offers on Resale contracts, but I could really use some advice.

Is it standard to ask sellers to cover the closing costs and annual dues? What about price per point? Is it expected that people will not offer full asking?

I don't want to insult sellers but I also don't want to pay more than what is normal. Some threads here make it seem that negotiation is standard, like buying a house.

I really appreciate hearing peoples' experiences. Thank you!!!

Don't worry about insulting anyone, that's their problem. What you should do is decide what a reasonable price to expect is based on your parameters. The ROFR threads should help you with that. The more restrictive you want/need the more difficult it is to get a good price. Small contracts, smaller in demand resorts and newer resorts will be more difficult and you may want to take less chances. VB, OKW, SSR & AKV will be easier to negotiate if not too small. While you never know I'd includes dues in your offer based on the points availability and either offer a split closing division or reserve closing adjustments for counter offers. If you're within the ballpark, anyone who'd be offended you wouldn't want to work with anyway.

 

[jekjones1558]

Everything is negotiable when it comes to resale. Smaller contracts (150 points or less) are more popular and command higher prices. Contracts that have all current and/or maybe banked points are more desirable. Smaller resorts are harder to get so command higher prices. If you can't book more than 7 months ahead or if you are not fussy about which DVC resort you reserve then you can find some bargains at places like OKW. Regarding closing costs, divide the closing cost $$ by the number of points and understand that if you ask the seller to cover closing costs you are, in effect, offering that amount less/point. Personally I think it is better to pay closing costs as the buyer because offering more per point makes the contract less attractive to Disney for ROFR. JMHO. Good luck! And be sure to check out this thread: http://www.disboards.com/threads/ro...ost-for-instructions-formatting-tool.3551378/

 

[Disney Dad ADL]

What about price per point? Is it expected that people will not offer full asking?

Overall, I would approach it like this:
1. Decide what kind of contract you're looking for and find an appropriate contract
2. Decide how much you think it's worth
3. Make an offer close to what you think it's worth, or maybe a couple bucks lower.

It makes no difference what the seller lists it for IMO. If I think it's worth $80 and they are listing at $100, I would offer $80. If they are listing at $85, I would offer $80. If the seller gets offended, doesn't matter. You probably would never even know about it. There are plenty of contracts out there that are basically the same.

Is it standard to ask sellers to cover the closing costs and annual dues?

I would "standard" is buyer covering closing costs. Typically, seller will cover dues if they've already used up the points for the year, and the buyer will cover the dues if the points are still there. However, for various reasons, it's not actually clear whether this is actually "correct" (which has been a discussion on other threads), but I would say it is typical.

Ultimately it doesn't really matter. As mentioned, everything is negotiable. If you pay $5000 for the points and $500 for closing, or pay $5500 for the points and they pay closing, it's exactly the same from your end.

It is actually slightly better for the seller if they sell for a lower $/point and pay for closing costs and annual dues, since the commission would be slightly lower I believe, but I don't think anyone actually takes that into account.

 

[miTnosnhoJ]

The ROFR thread is a small sample of the transactions, but you can get a feel for actual deals including available points, closing costs maintenance fees, price per point, etc. You can also look on the Orange County Controller's site and see ALL the deals. You can easily calculate price per point, but you will not have visibility to how many points are available in each use year (i.e. Full or stripped). But is is a useful way to see the full range of pricing for a resort. If you need it, I can probably find a link for how to get this.

You want to find a price you are comfortable with, but ultimately, you need to look at actual cash. For example, If you think a 100 point contract is worth $130 per point, and they are insisting on $132 per point, you are only $200 apart, which in the scheme of things is nothing. Also, If someone is holding out for a high price per point, you could make an offer close to their demand, but ask them to pay MF and closing costs.

 

[com_op_2000]

OP, Offer what you think is reasonable after looking at what is on the ROFR/Sell listing here on the DIS.
Everything is on the table just like any other real estate sale.

 

[kniquy]

All prices are negotiable -- occasionally you will find a contract that states the price is not. You can put in offers and then the resale company will review your offer with the sellers they can accept, counter or just decline all together. I had recently put in an offer on a HHI contract (glad it didn't go through with the recent MF increase ) -- It was listed at $65 I offered $55 with splitting closing costs, they countered with $60pp and me paying closing. I dropped that and just watched it and with in a week or so they dropped their asking price to $59.

My contract i did buy was listed for $85 and i offered $81 with getting 2016 MF reimbursed (because it was stripped) that was accepted.

I think many listing prices are a starting point. If it truly is the contract UY and points that you want sometimes it is not worth trying to save a few hundred bucks. Do pay attention to the point status on the contract -- that can have a big impact on price.

Definitely look at the ROFR for the past 6 months -- that should give you a good reasonable idea on price.

 

[Brian Noble]

One caveat about the ROFR thread: I suspect it shows the low end of the market, as (a) it is populated by very savvy buyers and (b) I suspect there are some people who decided not to post to the ROFR thread because they paid a little more to be sure of getting the deal, and don't want to disclose that fact to others.

 

[jekjones1558]

We added on 6 times. I was one who tried to get the BEST deal. In retrospect I was really dumb. The few hundred dollars between a super deal and an okay deal is NOTHING compared to the long term enjoyment of DVC. Live and learn.

 

[luvdisneyland]

Everything is negotiable when it comes to resale. Smaller contracts (150 points or less) are more popular and command higher prices. Contracts that have all current and/or maybe banked points are more desirable. Smaller resorts are harder to get so command higher prices. If you can't book more than 7 months ahead or if you are not fussy about which DVC resort you reserve then you can find some bargains at places like OKW. Regarding closing costs, divide the closing cost $$ by the number of points and understand that if you ask the seller to cover closing costs you are, in effect, offering that amount less/point. Personally I think it is better to pay closing costs as the buyer because offering more per point makes the contract less attractive to Disney for ROFR. JMHO. Good luck! And be sure to check out this thread: http://www.disboards.com/threads/ro...ost-for-instructions-formatting-tool.3551378/

Exactly! Well said.

 

[luvdisneyland]

One caveat about the ROFR thread: I suspect it shows the low end of the market, as (a) it is populated by very savvy buyers and (b) I suspect there are some people who decided not to post to the ROFR thread because they paid a little more to be sure of getting the deal, and don't want to disclose that fact to others.

Very true!

 

[gharter]

i would agree that everything is negotiable. Its a matter of deciding how much you want to pay, and how creative you can be at structuring the deal. Some sellers are willing to do that and some will not. My feeling is there is always another contract out there that meets my needs. We went through several offers on each contract we have. In the end, both sides were happy and I believe got a good deal from it.

 

[mustinjourney]

My advice is to think of each contract as a commodity instead of real estate. It's not like a normal real estate transaction where each house is unique. It's almost like buying stock.

Figure out what price YOU want to pay and then just start making offers and see which seller is interested. Don't worry about offending anyone. If they get offended, move onto the next contract.