recent resale $$

[pakdayton]

hi ... i'm looking into a few OKW resales .... the asking prices posted are $68-70. per point .... but what should i offer?
any advice?
someone keeps posting that he/she bought a resale for for $9. per point less than the asking price (hi to whoever that was ... i cant remember where i read it )

i dont want to look like a jerk by asking some ridiculously low and insulting $ ... but i'd like to get a fair $ for a resale

i figure it like this ...
a new SSR contract works out to 85 per point for 49 years (coz you dont get 2004 pts) with a 250 pt contract that's $433. per year (not incl maint fees)

an "old" OKW contract at 69 per pts for 39 years (coz you probably will get 2004 pts) for 250 pts. thats $442. per year (not maint. fee)

so ... i dont actually want to pay more per year on a resale, right?

what do you all think?
thanks

 

[GeoffM24]

Remember Disney can buy back any contract. I highly doubt Disney would let it go through at $60 per point.

From what I have read mid 60's is about as low as Disney allows.

 

[pumpkinboy]

I don't think Disney will let you get any of the WDW properties for much below $70 a point. VB might go as low as $60 per point. You do your own math and decide what works for you.

I my caclulations, I did a discounted cash flow analysis taking the time value of money into account - remembering that $1 today is worth a whole lot more than the promise of a $1 some years in the future. On my spreadsheet, the first year's points were worth $10 a point (since that was what was on offer from DVD) and the final year was worth less than a penny. Comparing to Mods and Deluxe on sale (our pre-DVC stays) and using our mortgage rate as the time-value-of-money, and assuming constant rate of Maint Fee increase, we came out with a breakeven point of a bit more than 9 yrs; but we were paying full price direct from DVD, so resale is gonna come out better.

Good luck with your calculations. Agian, you need to see what works for and makes sense to you.

 

[Happy Birthday Cat]

If you have the time and energy, I'd bid low for an OKW contract. The worst that could happen is that Disney takes it by ROFR. There are so many other OKW contracts out there right now (supply/demand) that you can always bid a little higher on the next one.

Of course if this one is the absolute right one for you and you want to go to WDW at a certain time and it's important for you to get a contract now, then I'd say to bid carefully so that you get it.

HBC

 

[jarestel]

Another thing to keep in mind when buying a resale is that the buyer typically pays the closing costs which could increase your cost by another couple of dollars per point. If there are 2004 points left, the seller might also want to be compensated for dues on those points which again might add a couple of dollars per point to the price. All things are negotiable though and you might be able to work out a better deal with the seller. Good luck!

 

[tamu91]

I see the big gaps between the asking and selling price if the Seller has the contract listed in the mid to high 70s P/P. But I wouldn't read too much into that because every contract is slightly different.
What you should be concerned with is whether the contract you offer will pass ROFR.
I haven't seen any contract pass ROFR below $67.00 in a while, excluding VB and HH.
OKW has the most contracts on the resale market and BCV/VWL the least so supply and demand plays into what people are willing to pay.
Just do your own math and offer what you feel comfortable paying. Or just ask your resale agent, they should have a pretty good feel on that will pass ROFR and what not.
Good luck.

 

[tjkraz]

Don't forget you also need to find a seller willing to ACCEPT your offer.

I agree with HBC--if you are in no hurry, try making some lowball offers and see what happens with ROFR.

 

[RuthnPaul]

Pakdayton

Something else that DH and I always consider is whether the contract is loaded or stripped. If the contract has most/all current year points available, perhaps some banked, I'd be willing to pay more than if current (and possibly next) years points have already been used up.

 

[pakdayton]

thanks to all ...
my head is still spinning
we have ~finally~ decided to buy DVC ... but the whole resale/new issue is not a simple as it sounds

no .. i'm not in hurry
new SSR contract would not have points until 6/05 so any resale with points is a bonus ... that said we have a quicky trip planned for valentines day 2005 that we're paying for the old fashioned way ....

maybe with a resale we could use points in feb ... i just dont know

as always your input is MUCH appreciated

 

[mydogdrew]

Originally posted by pumpkinboy
I don't think Disney will let you get any of the WDW properties for much below $70 a point. VB might go as low as $60 per point. You do your own math and decide what works for you.

I my caclulations, I did a discounted cash flow analysis taking the time value of money into account - remembering that $1 today is worth a whole lot more than the promise of a $1 some years in the future. On my spreadsheet, the first year's points were worth $10 a point (since that was what was on offer from DVD) and the final year was worth less than a penny. Comparing to Mods and Deluxe on sale (our pre-DVC stays) and using our mortgage rate as the time-value-of-money, and assuming constant rate of Maint Fee increase, we came out with a breakeven point of a bit more than 9 yrs; but we were paying full price direct from DVD, so resale is gonna come out better.

Good luck with your calculations. Agian, you need to see what works for and makes sense to you.

It's amazing to me how many people don't understand this concept. It's fantastic from a marketing standpoint but the extra years are worth very little (today). You are far better off buying resale, investing the extra cost of SSR today and buying SSR resale in 2042 for the last 12 years. Many appear to be more than willing to pay full price today for something that has very little value.

 

[pakdayton]

see there you go .... this is why i appealed for help in my decision-making

maybe i should be insulted by "its amazing to me how people dont understand this concept" line ... but i'm actually very grateful
i had not considered what the value would be to me 39+years down the road as opposed to keeping a few thousand $$in my pocket now ... my background does not include the ability to make "discounted cash flow anaylsis" but i love all of you who can

and here i was leaning toward a SSR contract ... now i'm back on the resale side of the fence

thanks again
anyone else want to jump into this ... feel free
i appreciate all the help i can get

 

[mlobbia]

pakdayton,

I am one of those able to do discounted cash flows (and I did one for my purchase into DVC at BWV). And all I can say is that a discounted cash flow is flawed, you need to consider all the assumptions involved (inflation, return on investment, cost of resale in 2042, etc.) Once you make all these assumptions, you can make the analysis support your decision either way (resale vs. SSR through Disney). So the advice that has resounded on this board for the past 6 months that I have really followed it is "Buy where you want to stay". If you like SSR, buy there, if you like one of the other resort, buy there (or buy them all if you can afford it )

So buy where your heart tells you to, your pocket book will just come along for the ride.

Good luck in your decision.

 

[tjkraz]

Regardless of how you choose to look at the initial purchase, just remember that your annual dues will represent the majority of your expense over the life of the contract. That would make OKW (resale) or SSR (new) your cheapest alternative--if price is of paramount importance.

I tend to agree with mlobbia regarding the resort selection. If one resort over another is really tugging at you, it's not worth nickel and diming the purchase price.

 

[rinkwide]

As stated previously, only buy SSR if you really like it.

We ran our own discounted cash flow analysis and came to the conclusion that DVC is a great pre-paid WDW vacation program, not a great investment. We bought accordingly.

As for OKW (great choice) I'd suggest trying to negotiate toward a net cost without focusing on the price per point. Try getting the seller to pay all fees, closing costs, maintenence, etc. In fact, leaving the PPP higher might actually allow you to get a low-ball deal to pass RoFR.

 

[calypso*a*go-go]

As for OKW (great choice) I'd suggest trying to negotiate toward a net cost without focusing on the price per point. Try getting the seller to pay all fees, closing costs, maintenence, etc. In fact, leaving the PPP higher might actually allow you to get a low-ball deal to pass RoFR.

I disagree with this...we offered $68/pt @ OKW with the seller paying closing costs, maintenance fees, and transfer fee. DVC was going to exercise ROFR. We immediately counter-offered @ $65/pt. with seller paying transfer fee and buyer paying closing costs. We split the costs on the maintenance fees. This offer passed ROFR. This was about four months ago.

 

[pumpkinboy]

Originally posted by mlobbia
...And all I can say is that a discounted cash flow is flawed, you need to consider all the assumptions involved (inflation, return on investment, cost of resale in 2042, etc.) Once you make all these assumptions, you can make the analysis support your decision either way (resale vs. SSR through Disney).
...So buy where your heart tells you to, your pocket book will just come along for the ride.
Good luck in your decision.

I am in absolute agreement that discounted cash flow is flawed, and that it depends entirely on your assumptions (just remember the Economist on a desert isle with a can of beans: "first, assume a can-opener"), but DCF can be a good way to throw all the numbers up, see what it looks like, review your assumptions and see what makes sense and what doesn't.
It is nevertheless important to remember the time-value-of-money: that $1 in services today is worth plenty more than the promise of $1 in services at some point in the future.

There are lots of good reasons to buy at SSR, not least among them the availabiltiy of Disney financing, should you wish. Another big plus of buying SSR is the instant gratification of avoiding the whole ROFR process. The other home resorts each has its own advantages as well, so I agree also that you should "buy where your heart tels you to." Not overthinking it or worrying too much about it would also be good advice.

Good luck with your decision process.

 

[Scotch]

Originally posted by calypso*a*go-go
I disagree with this...we offered $68/pt @ OKW with the seller paying closing costs, maintenance fees, and transfer fee. DVC was going to exercise ROFR. We immediately counter-offered @ $65/pt. with seller paying transfer fee and buyer paying closing costs. We split the costs on the maintenance fees. This offer passed ROFR. This was about four months ago.

I thought Disney does not charge a "transfer fee" for resale? What is this?

Also, I read about buyers paying 1/2 the current year's maintenance fees, etc. When are m/fs due? Are they not due in January of each year? Just wondering what kind of questions I need to ask when making offers. Thanks.

 

[calypso*a*go-go]

There is a $100 transfer fee charged. The maintenance fees are due in January but in most cases, the buyer ends up reimbursing the seller for the points that are still available during the current year. In our situation, there were 64 points still available from the 2004 allotment so we ending up reimbursing them for those points only. This was all handled through the closing process. That's another reason why people get really exciting about points available on the contract that have been banked from the previous year as the maintenance fees have been paid and there is usually no reimbursement on them so they are considered "free" points. Clear as mud?

 

[mydogdrew]

"maybe i should be insulted by "its amazing to me how people dont understand this concept" line ... but i'm actually very grateful
i had not considered what the value would be to me 39+years down the road as opposed to keeping a few thousand $$in my pocket now ... my background does not include the ability to make "discounted cash flow anaylsis" but i love all of you who can"

Sorry - I was too harsh. What I really mean is that I am surprised how much influence the extra years thing has on people's decision re: home resort. It appears to be a great tool to sell SSR. Re: DCF, we could all agree very quickly on some basic assumptions that would clearly indicate that those extra years are worth next to nothing today. You would have to make absolutely wild assumptions to conclude anything else. Disney has increased "sold out" resorts to $89 which is now in-line with SSR. If nothing else, this alone supports the "extra years have little value" position. I firmly believe that SSR will sell at a discount (like OKW) relative to Epcot resorts once it is sold out.

 

[Scotch]

Thanks for the explanation, calypso*a*go-go.