question about selling with banked points

[mjc2003]

I'll try to be as vague as possible!
We have our contract listed for sale. We have an April UY. We banked our 2013 points, so they are not available until April 2014, but obviously the dues are already paid for by us during the last calendar year. We have received multiple offers, but each time the offer is for us to "eat" the dues on the 2013 points. Even our listing agent is telling us this is "normal". My contention is that whoever buys our contract will have full 12 months usage of the points (assuming we close within the next 2+ months), and full home booking advantage. I don't quite understand why we should cover dues on points that the buyer is getting? Our reseller keeps referring to them as "distressed", but other than not being able to bank them, how are they "distressed"?
Anybody have any experience with situations like this? Am I missing something? Obviously buyers have a right to ask for whatever they want, just as I have the right to take or reject the offers, but I don't want to stand on principle if my principle is misguided. To me, if I have to eat that $1100, then that's basically like taking $5 off the list price.

Thanks!

 

[PacoDF]

The points are distressed because they must be used by March 31, 2015 and can't be banked. If someone buy that contract now, he will not be able to book a reservation for at least 60 more days: lets say he can login with that contract on April 1st. The points will be already there but must be used within exactly 12 months, so in fact he will only have 11 months home priority ONLY for travel dates during march 2015. All the previous months (april 2014 to feb 2015) will have less than 11 months for booking.

So, those points would be used most certainly in a hurry by the new owner, and that's why everybody considers them "distressed".

Anyways, you can keep rejecting the offers you don't like. If your contract is loaded, eventually someone will be interested at your price (or closer to it) because he thinks he can actually use those extra points without too much problem.

Another thing you can do, is just adjust the pricing. Raise $5pp and not ask for 2013 dues. It's the same money, but maybe the buyers will bite more easily.

Good luck!!

 

[MagicJourney]

It's normal in resale market. You can always raise your price by $5 to offset the MFs you paid. On the other hand, a reasonable buyer normally take banked points into consideration when making an offer. Good luck with your sell.

 

[lovin'fl]

I would just expect to get a good $$/point price on this loaded contract but would not expect buyers to pay 2013 dues...2014 dues, yes. As a buyer I would not pay the 2013 dues. Good luck! It's a slow market right now. I just e-mailed our broker to take our OKW contract, we were trying to sell, off the market. It was listed for a month and not a single offer...but mine is kind of stripped.

 

[Msmithmd]

I have never heard of, or seen posted here, any buyer paying for previous year dues as a line item in a resale contract.

Agree with the previous posters that you can try to get more money per point for a loaded contract. The key concept being "try." As a basically open market, you can ask whatever you want and see if you can find a buyer.

I believe historically by following the ROFR thread, that for DVC resales the market tends to over-value stripped contracts and under-value loaded ones.

Perhaps you could pull your listing, rent out the points you currently have banked plus your coming 2014 points, and try again to sell in spring of '15 with a more "neutral" contract offering? This would give you the advantage of getting at least $11pp for last year's and this year's points- but of course also the disadvantage of having to hold on to the contract for another year.

 

[mjc2003]

The points are distressed because they must be used by March 31, 2015 and can't be banked. If someone buy that contract now, he will not be able to book a reservation for at least 60 more days: lets say he can login with that contract on April 1st. The points will be already there but must be used within exactly 12 months, so in fact he will only have 11 months home priority ONLY for travel dates during march 2015. All the previous months (april 2014 to feb 2015) will have less than 11 months for booking.

So, those points would be used most certainly in a hurry by the new owner, and that's why everybody considers them "distressed".

Anyways, you can keep rejecting the offers you don't like. If your contract is loaded, eventually someone will be interested at your price (or closer to it) because he thinks he can actually use those extra points without too much problem.

Another thing you can do, is just adjust the pricing. Raise $5pp and not ask for 2013 dues. It's the same money, but maybe the buyers will bite more easily.

Good luck!!

Thanks. I understand that they are limited to use within a certain timeframe, but my interpretation of distressed has always been points that are without any home booking advantage, and can only be used in an abbreviated timeframe so as to inhibit most options. Like, say, expiring THIS fall, so by the time I close the buyer would be looking at a 5-6 month window. I don't look at my points as distressed from one year to the next just because I've banked them. But it sounds like my definition of distressed is not quite applicable!

As for raising the price, we actually lowered it quite a bit after our initial listing didn't get much response and, IMO, it's priced aggressively. It's basically one of the 3 lowest priced contracts for that resort, when all factors are considered. The other two are actually larger, so that's a factor too.
Ironically, on the last offer we were offered $5 less than asking and we cover the 2013 dues. I offered to cover the dues if they merely met our asking price (which is already low). They didn't even counter.

I think I'll take the issue of getting money back for those 2013 dues off the table. Sounds like things are done a certain way, and I'll list it accordingly. I also am getting the feeling that the market has slowed down a lot.
Thanks for the feedback!

It's normal in resale market. You can always raise your price by $5 to offset the MFs you paid. On the other hand, a reasonable buyer normally take banked points into consideration when making an offer. Good luck with your sell.

Thanks! As I said above, I think I'll just accept that those 2013 dues are gone, and stick to my asking price.

I would just expect to get a good $$/point price on this loaded contract but would not expect buyers to pay 2013 dues...2014 dues, yes. As a buyer I would not pay the 2013 dues. Good luck! It's a slow market right now. I just e-mailed our broker to take our OKW contract, we were trying to sell, off the market. It was listed for a month and not a single offer...but mine is kind of stripped.

It does seem slow. We lowered our initial price after a month of no response. Since then, we've gotten 3 offers including 2 in the last week. So we're going to stick it out. I have it currently listed to cover those dues, so I'll have that changed and I think that drop in the listing should help.

I have never heard of, or seen posted here, any buyer paying for previous year dues as a line item in a resale contract.

Agree with the previous posters that you can try to get more money per point for a loaded contract. The key concept being "try." As a basically open market, you can ask whatever you want and see if you can find a buyer.

I believe historically by following the ROFR thread, that for DVC resales the market tends to over-value stripped contracts and under-value loaded ones.

Perhaps you could pull your listing, rent out the points you currently have banked plus your coming 2014 points, and try again to sell in spring of '15 with a more "neutral" contract offering? This would give you the advantage of getting at least $11pp for last year's and this year's points- but of course also the disadvantage of having to hold on to the contract for another year.

That's an option we've considered. I'll probably wait it out another month and then go that route. I do believe that if we remove the dues from the listing it will probably sell, we've had decent interest since we dropped the price.

 

[Missyrose]

The only MFs that are usually on the table are the current year, which would be the 2014 MFs. As a buyer, i would not even entertain the idea of paying the seller for the past year's MFs. Most people would pay a few dollars per point more for a contract that has banked points, that bump is as close as you will get to having someone reimburse you for last year's fees. It's not reasonable to expect someone to pay you an extra year of MFs simply because you waited until the following year to sell your contract.

 

[LorieDisneyLover]

I'll try to be as vague as possible!
We have our contract listed for sale. We have an April UY. We banked our 2013 points, so they are not available until April 2014, but obviously the dues are already paid for by us during the last calendar year. We have received multiple offers, but each time the offer is for us to "eat" the dues on the 2013 points. Even our listing agent is telling us this is "normal". My contention is that whoever buys our contract will have full 12 months usage of the points (assuming we close within the next 2+ months), and full home booking advantage. I don't quite understand why we should cover dues on points that the buyer is getting? Our reseller keeps referring to them as "distressed", but other than not being able to bank them, how are they "distressed"?
Anybody have any experience with situations like this? Am I missing something? Obviously buyers have a right to ask for whatever they want, just as I have the right to take or reject the offers, but I don't want to stand on principle if my principle is misguided. To me, if I have to eat that $1100, then that's basically like taking $5 off the list price.

Thanks!

We purchased two contracts within the past six months and did not pay MF for the current year since they had already been paid. It didn't seem like any sellers expected us to do so either.

Plus, $1100 in MFs must mean it's a large amount of points … generally harder to sell the larger contracts -- and UY April doesn't seem as popular as other months. Perhaps waiting until the perfect buyer comes along will work out best … but I doubt they'll want to reimburse 2013 points.

 

[mjc2003]

Well, wouldn't you know? We changed the listing yesterday to take out the 2013 dues yesterday late morning, and got two separate full price offers last night. However, both want us to pay closing. Is that normal? With a nearly loaded contract that's got banked points and is priced very competitively, I'm inclined to say no. That's now 5 offers in a week, I'm not sure we should pay closing if there is good demand.
What's the norm here? I guess I could offer to split closing but that's the same as knocking a few more dollars off our price per point, and I had sort of decided that our price was firm!

 

[stevelee]

I just bought a contract with banked 2012 points and 2013 points available. I did not and would not pay dues on those. There are so many contracts available with people not asking for dues. I would just skip over any that did. I guess it depends how bad you want to sell. I did however pay closing and didn't even think to ask the seller to pay that. I felt I got a fair deal between my per point cost and the banked points included.

 

[Carlnne]

Buyer should pay closing- especially with bank points. Hold firm (unless you are in a hurry).

 

[PacoDF]

Closing costs are just money on the table. Both buyer and seller can use it as part of the negotiation. If your price is competitive, contract is loaded and you are getting offers, then I would ask for buyer to pay closing costs. Maybe a couple will get out of the deal, but you'll find a buyer that will accept very soon.

When a buyer offers asking price for something and negotiate the minor costs, he is usually 99% committed to buy and is only trying to get away with a few more $.

Good luck!

 

[mjc2003]

Thanks all for the feedback. We countered both of the current full price offers asking for the seller to pay closing. I asked the broker to let each know that we have had multiple offers, so we just don't feel like we need to budge.

Our broker believes that both parties are very interested so I would be surprised if we don't have a deal by end of today.

 

[PacoDF]

Thanks all for the feedback. We countered both of the current full price offers asking for the seller to pay closing. I asked the broker to let each know that we have had multiple offers, so we just don't feel like we need to budge.

Our broker believes that both parties are very interested so I would be surprised if we don't have a deal by end of today.

Good luck and let us know!

 

[LorieDisneyLover]

If they are offering full price it might be that they are trying to negotiate something -- that is, get some type of 'deal' rather than paying a full price contract. I guess what I mean is that they are asking you to budge a little?

Of course, if it's priced right already then there's no reason to budge? But do you want to lose the sale over approximately $500? Maybe offer to split closing?

 

[chukdotcom]

I'll try to be as vague as possible!
We have our contract listed for sale. We have an April UY. We banked our 2013 points, so they are not available until April 2014, but obviously the dues are already paid for by us during the last calendar year. We have received multiple offers, but each time the offer is for us to "eat" the dues on the 2013 points. Even our listing agent is telling us this is "normal". My contention is that whoever buys our contract will have full 12 months usage of the points (assuming we close within the next 2+ months), and full home booking advantage. I don't quite understand why we should cover dues on points that the buyer is getting? Our reseller keeps referring to them as "distressed", but other than not being able to bank them, how are they "distressed"?
Anybody have any experience with situations like this? Am I missing something? Obviously buyers have a right to ask for whatever they want, just as I have the right to take or reject the offers, but I don't want to stand on principle if my principle is misguided. To me, if I have to eat that $1100, then that's basically like taking $5 off the list price.

Thanks!

FYI, I know which listing is yours and I was going to make an offer on it yesterday. Then I saw they added in the MF for the banked points and I instead offered on another property because of that.

 

[sndral]

I'll try to be as vague as possible!
We have our contract listed for sale. We have an April UY. We banked our 2013 points, so they are not available until April 2014, but obviously the dues are already paid for by us during the last calendar year. We have received multiple offers, but each time the offer is for us to "eat" the dues on the 2013 points. Even our listing agent is telling us this is "normal". My contention is that whoever buys our contract will have full 12 months usage of the points (assuming we close within the next 2+ months), and full home booking advantage. I don't quite understand why we should cover dues on points that the buyer is getting? Our reseller keeps referring to them as "distressed", but other than not being able to bank them, how are they "distressed"?
Anybody have any experience with situations like this? Am I missing something? Obviously buyers have a right to ask for whatever they want, just as I have the right to take or reject the offers, but I don't want to stand on principle if my principle is misguided. To me, if I have to eat that $1100, then that's basically like taking $5 off the list price.

Thanks!

Did your contract have all banked 2013 pts. and all 2014 pts.? I ask because I'm confused, I thought you used your 2014 points on an Oct. '13, family trip and were contemplating selling a stripped contract -
http://www.disboards.com/showthread.php?t=3152361
I assume something changed after the above thread.
When I was buying I always assumed who paid MFs to be negotiable and ended up not paying the 2013 MFs on the contract I just bought. I focused more on the price per point w/ everything thrown into the mix (closing costs, price per pt., adm. fee if applicable, MF, etc.) I didn't really care what it was called, I just had a bottom line number for how much per point I would pay.
Good luck w/ those offers.

 

[Dean]

I'll try to be as vague as possible!
We have our contract listed for sale. We have an April UY. We banked our 2013 points, so they are not available until April 2014, but obviously the dues are already paid for by us during the last calendar year. We have received multiple offers, but each time the offer is for us to "eat" the dues on the 2013 points. Even our listing agent is telling us this is "normal". My contention is that whoever buys our contract will have full 12 months usage of the points (assuming we close within the next 2+ months), and full home booking advantage. I don't quite understand why we should cover dues on points that the buyer is getting? Our reseller keeps referring to them as "distressed", but other than not being able to bank them, how are they "distressed"?
Anybody have any experience with situations like this? Am I missing something? Obviously buyers have a right to ask for whatever they want, just as I have the right to take or reject the offers, but I don't want to stand on principle if my principle is misguided. To me, if I have to eat that $1100, then that's basically like taking $5 off the list price.

Thanks!

Even what they are telling you is really over pricing the dues technically. The neutral position on dues is you pay the dues on a calendar year basis so with April, 2014 points; paying 9/12 of this years dues is neutral. As a rule dues on banked points are not reimbursed or is done at a reduced rate depending on the situation. So someone paying the full 2014 dues and getting the 2014 points plus the banked points really is more the norm. Of course they do have some value but not as much as the 2014 points which are more flexible. Paying 2013 AND 2014 dues is not reasonable unless you drop the price enough below market to account for that. Realize you never know when a resale is going to take 6 months instead of 2.

 

[chukdotcom]

Even what they are telling you is really over pricing the dues technically. The neutral position on dues is you pay the dues on a calendar year basis so with April, 2014 points; paying 9/12 of this years dues is neutral. As a rule dues on banked points are not reimbursed or is done at a reduced rate depending on the situation. So someone paying the full 2014 dues and getting the 2014 points plus the banked points really is more the norm. Of course they do have some value but not as much as the 2014 points which are more flexible. Paying 2013 AND 2014 dues is not reasonable unless you drop the price enough below market to account for that. Realize you never know when a resale is going to take 6 months instead of 2.

This contract had 0 2014 points.

 

[Dean]

This contract had 0 2014 points.

If there are no 2014 points and all 2013 points then IMO the neutral dues reimbursement is zero to seller. Obviously the banked points have some value so I'd say a good compromise is NO reimbursement for 2013 or 2014 points. Then the buyer is paying 3 months worth of dues on the 2014 points they don't have and getting the banked points.