Negotiating a resale price

[mcap2004]

Ok, I don't know if this is the right thread but how does the whole negotiating on a resale work? I heard that going into ROFR with a low amount might raise a red flag for Disney. I found, what I think a good resale, so how do you know whether you should take what the seller is asking or should you offer something lower?? This is one that I like


Saratoga Springs-$78/pt. February 225 $17,550.00

 

[Msmithmd]

Some people really aggressively negotiate their resale contracts and are only satisfied with an absolute bottom of the market deal.

For me, the meaningful saving is versus direct pricing. And your example is a massive savings over direct.

If this is the exact contract you want, including UY, total points annually, and current banked/borrowed status, my input to you would be to simply offer full asking and move forward.

It's up to you to decide how hardball you want to play it if you decide to try to negotiate downward- just like buying a house. Only in this circumstance, the other bidder who may swoop in and take your "house" if your offer is too low is a Fortune 500 company...

 

[puakinikini]

Some people really aggressively negotiate their resale contracts and are only satisfied with an absolute bottom of the market deal.

For me, the meaningful saving is versus direct pricing. And your example is a massive savings over direct.

If this is the exact contract you want, including UY, total points annually, and current banked/borrowed status, my input to you would be to simply offer full asking and move forward.

It's up to you to decide how hardball you want to play it if you decide to try to negotiate downward- just like buying a house. Only in this circumstance, the other bidder who may swoop in and take your "house" if your offer is too low is a Fortune 500 company...

I completely agree with this, but I do think that most sellers have a little wiggle room built in. Of course, you run the risk of Disney buying the resale instead of allowing it to go low.

 

[rtobe]

I suspect that some sellers have between $1-3 per point to negotiate with others bought in at higher point values than they are selling for and just hoping to get some of their investment back. For the size contract you are looking at you might be able to offer a dollar less per point and be ok. The small contracts (less than 100 points) tend to go very fast especially if competitively priced so negotiating on those usually not a good idea. And of course as others have noted, you have to pass the right of first refusal by Disney. Good luck

 

[DVCMomBLT]

Ok, I don't know if this is the right thread but how does the whole negotiating on a resale work? I heard that going into ROFR with a low amount might raise a red flag for Disney. I found, what I think a good resale, so how do you know whether you should take what the seller is asking or should you offer something lower?? This is one that I like


Saratoga Springs-$78/pt. February 225 $17,550.00

Does it have any banked 2013 points?
Does it have full 2014 and 2015 points?

How loaded or stripped a contract is makes a big difference to me. If you are only getting 2015 points, then I say its too high.

 

[bmcd1998]

The best guidance I have seen on what to offer for a resale is this thread:

http://www.disboards.com/showthread.php?t=3297614

You can see what prices have passed ROFR and which have been "taken" by Disney. From what I can see, there are many prices below your listing and a few above that have passed.

We bought at BLT recently. We took the approach that there would ALWAYS be another similar contract if we were willing to wait. I say if it's meaningful dollars to you, negotiate. Just don't settle on a price that will almost definitely cause Disney to ROFR the contract.

Good luck! Hope to call you "neighbor" soon!

 

[skier_pete]

We paid what the seller was asking, but the price was pretty low. In hindsight, I think I would always offer $3- $5 lower than the asking price, and see if the seller is willing to negotiate. Each seller is different, it will depend on how badly they want to sell. If they are not willing, then you are right where you started with the contract as posted, and you can either accept that or turn it down.

For your example, you could offer $75 per point. The seller will either say:
(a) yes,
(b) give you some middle offer, or
(c) stick with the original $78.

In the worst case you are right where you started. They are not going to come back and say, no, and now it's $80 per point for you!

Edit: I would avoid giving insultingly low offers. Again for your example, if you offer $68 per point, the seller may just cut you off.

 

[Bullseye]

Something to consider is even if seller is willing to sell lower, how low can you go before the thing will not make through ROFR. One of the re-sellers told me yesterday that anything considerably below the mean and especially those with banked points are the most attractive to Disney. He told me that for the most part they really have no points right other Aulani to offer so they are gobbling up anything that is too low.

 

[Splashboat]

In the worst case you are right where you started. They are not going to come back and say, no, and now it's $80 per point for you!

Edit: I would avoid giving insultingly low offers. Again for your example, if you offer $68 per point, the seller may just cut you off.

It struck me funny you wrote that because I was just on the selling end and did that myself.
I had a contract I knew would sell easily so I wasn't concerned about losing a buyer. Someone offered such a ridiculous price PP it really irritated me and I said no negotiating with them.
I sold the contract within 36 hours of listing to someone else (had 4 offers during that time).
I know I wrote a post a couple of years ago inquiring about trying to negotiate without insulting the seller (which I never did).
The reason I am responding to your post is because I hadn't realized how I would react until it happened to me.
If you are offering something absurdly below market value you do take a chance the seller is going to hold firm with you but negotiate with someone else.

 

[skier_pete]

It struck me funny you wrote that because I was just on the selling end and did that myself.
I had a contract I knew would sell easily so I wasn't concerned about losing a buyer. Someone offered such a ridiculous price PP it really irritated me and I said no negotiating with them.
I sold the contract within 36 hours of listing to someone else (had 4 offers during that time).
I know I wrote a post a couple of years ago inquiring about trying to negotiate without insulting the seller (which I never did).
The reason I am responding to your post is because I hadn't realized how I would react until it happened to me.
If you are offering something absurdly below market value you do take a chance the seller is going to hold firm with you but negotiate with someone else.

Well, and that makes for another good point - if it's a good contract with a good price, it's possible trying to talk the person down at all will only lose you the contract. However, if it's at an average or above average price - then best to try and bargain.

A PP mention the ROFR thread on here, and that is a very very useful resource to see about where contracts are selling for over the last 6 months. If the contract you are offering on is already on the low side, there's a good chance you won't get anywhere trying to negotiate.

 

[supersnoop]

Edit: I would avoid giving insultingly low offers. Again for your example, if you offer $68 per point, the seller may just cut you off.

I don't think that's insultingly low. I purchased a 160 point SSR that was fully loaded (and then some) for $68/point.

To the OP, I'd question why you're so interested in this one contract. It looks like it's missing all of this years and half of next years points, and has been listed for two months. If it's perfect for you, I'd start low. If it's not perfect, I'd evaluate the other contracts available.

 

[sndral]

To really take a look at what is a reasonable offer you need to know what's out there, a simple Google search or two yields all the listings offered by the major DVC brokers - 95 Saratoga Springs contracts on the market right now w/ asking prices ranging from $70 per point to $115.63 per point.
Of those 95 contracts there are 29 in size between 200-230 points.
There are 5 for 225 points, including the one OP is looking at.
So how do those 5 rank against each other? I find it helpful to monetize the status of the contract to get a real sense of the value of the contract - is it stripped or loaded? So to compare the 5 contracts I've assigned the going price that David's will pay to rent points - $11, as the fair market value of the 'extra' (banked) points or the 'missing' (stripped) points to compare loaded v. stripped contracts:

$80 March w/ 190 banked 2013 points x $11 = $2090/225 = $9.28 per point more valuable. $80 - $9.28 = $70.72 true value/cost

$78 August w/ 45 banked 2013 points x $11 = $495/225 = $2.20 per point more valuable. $78 - $2.20 = $75.80 true value/cost

$78 March no banked points but all 2014 points going forward - neutral thus $78 true value/cost

$78 February no 2014 points and only 99 - 2015 points. Seller has used 351 points (all of 2014 and 126 of 2015) x $11 = $3861/225 = -$17.16 per point + $78 = $95.16 true value/cost

$85 September no points until 2015 - but has all 225 points from 2015 thus add to the true cost of the contract by the points the seller has stripped from the contract @ $11 per point = $96 true value/cost

Just another way to try and compare apples to apples.

 

[mcap2004]

Does it have any banked 2013 points?
Does it have full 2014 and 2015 points?

How loaded or stripped a contract is makes a big difference to me. If you are only getting 2015 points, then I say its too high.

Boo. I wouldn't even be getting the full 225 points for 2015. This is what it said in the notes: Notes: 99 points coming on 2/1/15 and 225 points coming on 2/1/16. Priced at $78 per point.

 

[mcap2004]

I don't think that's insultingly low. I purchased a 160 point SSR that was fully loaded (and then some) for $68/point.

To the OP, I'd question why you're so interested in this one contract. It looks like it's missing all of this years and half of next years points, and has been listed for two months. If it's perfect for you, I'd start low. If it's not perfect, I'd evaluate the other contracts available.

I did notice that...boo! But I'm still keeping my options open. I just wanted to know how it works because I don't want to offer something too low and lose the sellers interest

 

[mcap2004]

The best guidance I have seen on what to offer for a resale is this thread:

http://www.disboards.com/showthread.php?t=3297614

You can see what prices have passed ROFR and which have been "taken" by Disney. From what I can see, there are many prices below your listing and a few above that have passed.

We bought at BLT recently. We took the approach that there would ALWAYS be another similar contract if we were willing to wait. I say if it's meaningful dollars to you, negotiate. Just don't settle on a price that will almost definitely cause Disney to ROFR the contract.

Good luck! Hope to call you "neighbor" soon!

Thank you very much for the link. Yes, hope to make SSR our home very soon

 

[mcap2004]

Something to consider is even if seller is willing to sell lower, how low can you go before the thing will not make through ROFR. One of the re-sellers told me yesterday that anything considerably below the mean and especially those with banked points are the most attractive to Disney. He told me that for the most part they really have no points right other Aulani to offer so they are gobbling up anything that is too low.

So how does that work? Disney exercises their ROFR, buys it from under you and they sell it for their direct prices to someone who is looking for that specific sale and willing to pay the higher price??

 

[mcap2004]

It struck me funny you wrote that because I was just on the selling end and did that myself.
I had a contract I knew would sell easily so I wasn't concerned about losing a buyer. Someone offered such a ridiculous price PP it really irritated me and I said no negotiating with them.
I sold the contract within 36 hours of listing to someone else (had 4 offers during that time).
I know I wrote a post a couple of years ago inquiring about trying to negotiate without insulting the seller (which I never did).
The reason I am responding to your post is because I hadn't realized how I would react until it happened to me.
If you are offering something absurdly below market value you do take a chance the seller is going to hold firm with you but negotiate with someone else.

Oh no, I completely agree with you. Resale is already saving us a TON of money so I'm not about to go and low ball someone on their sale. I just wanted to know the ins and outs of negotiating on a resale. =) you as a previous seller, I would appreciate some tips for when we do consider buying.

 

[supersnoop]

So how does that work? Disney exercises their ROFR, buys it from under you and they sell it for their direct prices to someone who is looking for that specific sale and willing to pay the higher price??

Pretty much. Disney does have the ability to split the contract into smaller chucks, but they can't change the use year or add current points. So, they seem to like large contracts with full points, and have exercised ROFR for $10-$15 more than some contracts that pass. Personally, I wouldn't be worried about going too low, because if they want the contract at $65, they'll take it at $70, too. It's more luck than anything else.

 

[skier_pete]

So how does that work? Disney exercises their ROFR, buys it from under you and they sell it for their direct prices to someone who is looking for that specific sale and willing to pay the higher price??

Yeah, that's pretty much how it works. Surprisingly it doesn't seem like they do it a lot, though they are more likely to do it with a fully loaded contract (one that would have all the 2014 & 2015 UY points).

 

[pirate33]

I'm trying to figure out how to quantify the difference in reasonable sales price for a large (250 or 300 points) contract versus a medium sized one (100 to 160 or so). Using VGC as an example if it matters, if one were looking at otherwise equivalent contracts how much less per point would the large contract be fairly valued at compared to the medium sized one? $5? $10?

I also noticed the VGC contracts seem to be listed for much more than they are actually going for according to the ROFR thread. The reported recent sales are around $107 but the asking prices seem to hover in the $125 to $135 (or even higher) range.