Resale dues question

[Johnnie Fedora]

When a resale says no dues till 09, how is the dollar amount for the 07 and 08 dues calculated for the transaction?

 

[RobDoc]

I would think that it's either a misprint (they really mean no dues until 2007) ... or ... some estimate will be agreed upon for the 2007/2008 dues in the sale.

Either way, I'd sure want to clarification - in writing - before making an offer.

 

[Dean]

I agree with Doc that it's likely a misprint but to answer the question technically, the dues will be paid coming up and will be billed for 2008 and 2009 respectively in the preceding Dec. So the only way to accomplish this would be a cash reduction of the sale price to compensate for the future dues.

 

[No1HawkFan]

If a resales says no dues until 2009 I would guess that their are no points coming until 2009 or perhaps the seller is offer that incentive to get the property sold.

At closing I would guess the seller would be responsible for the annual dues for 2007 and 2008 based on the dues at that current time. So if you bought 150 points at Old Key West and closed back in October and said no dues until 2009 then you, as the buyer, would get a check or credit towards your closing of $1272 ($4.24 x 300 points). You might get shorted a little, of course, as the dues will probably go up, however, still might be a good deal depending on the listing.

I don't think it would be a misprint. As a individual seller I am sure they keep an eye on their listing and if it was a misprint would call the broker immediately.

 

[CarolA]

I am pretty sure this is not a misprint.

I am willing to bet that this is the one on the TSS site that won't let you close until April 07. It has a Feb use year and they apparently have borrowed ALL of the 2008 points for their Spring Break vacation. Talk about stripped, you get 1 point on 2/1/08!!!!

BID LOW! IMHO $95 a point is a lot to ask for this stripped contract.

 

[Jason@dvcstore]

If you are referring to our listings it would not be a misprint. Sellers that have points for 2006 (or current year) normally expect the buyer to pay the dues for the current allocation, however, this time of year most sellers expect buyers to start paying the dues in 2007 hence the advertising of "No dues 'til '07."

If you see a listing that says no annual dues until 2008 or 2009 it is either because no points coming until 2008 or 2009 or it might be that the seller is offering that option as an incentive. At the time of closing you would be credited for the dues and then you would have the money to pay when they are due.

 

[Doctor P]

If you are referring to our listings it would not be a misprint. Sellers that have points for 2006 (or current year) normally expect the buyer to pay the dues for the current allocation, however, this time of year most sellers expect buyers to start paying the dues in 2007 hence the advertising of "No dues 'til '07."

If you see a listing that says no annual dues until 2008 or 2009 it is either because no points coming until 2008 or 2009 or it might be that the seller is offering that option as an incentive. At the time of closing you would be credited for the dues and then you would have the money to pay when they are due.

And what rate of increase is being used to calculate the future dues? Someone would have been in deep you know what if they had no points for 2007 and were only given compensation for a 3% increase at HH, LOL.

 

[CarolA]

If you are referring to our listings it would not be a misprint. Sellers that have points for 2006 (or current year) normally expect the buyer to pay the dues for the current allocation, however, this time of year most sellers expect buyers to start paying the dues in 2007 hence the advertising of "No dues 'til '07."

If you see a listing that says no annual dues until 2008 or 2009 it is either because no points coming until 2008 or 2009 or it might be that the seller is offering that option as an incentive. At the time of closing you would be credited for the dues and then you would have the money to pay when they are due.

Tom
Thanks for the response. I think this one is correct I just think the owners are being a little greedy. I realize you have NO control, but asking the going rate for a more then fully stripped contract is interesting. (I know this one has been on there a while) I know you can't comment (nor would I want you too) I have just been watching this because I thought it was interesting when it first appeared.

I would think it's a hard sale since there are other contracts out there for the same price point with points to use MUCH sooner then 2009!

 

[Dean]

If a resales says no dues until 2009 I would guess that their are no points coming until 2009 or perhaps the seller is offer that incentive to get the property sold.

At closing I would guess the seller would be responsible for the annual dues for 2007 and 2008 based on the dues at that current time. So if you bought 150 points at Old Key West and closed back in October and said no dues until 2009 then you, as the buyer, would get a check or credit towards your closing of $1272 ($4.24 x 300 points). You might get shorted a little, of course, as the dues will probably go up, however, still might be a good deal depending on the listing.

I don't think it would be a misprint. As a individual seller I am sure they keep an eye on their listing and if it was a misprint would call the broker immediately.

The only way to do so would be to collect the amount at closing as I suggested above and Jason confirmed below. Else there would be no way to enforce the issue once you've closed and are 1-2 years down the road. I assume they would use the current rates to figure any adjustments which is fair in the situation even with the likelihood of small increases.

 

[4Pluto]

The parties can also agree to a projected increase and then reconcile the difference once the dues are announced. It requires follow up and the parties take the risk that they will have to take action to enforce that obligation, but it is another way to resolve the issue. In states where taxes are collected more than a year in arrears, this is not an unusual way to handle property taxes for real property sales.

 

[Jason@dvcstore]

In response to Doctor P the annual dues are based on the current years points at the time of closing. For example, if you closed on a property in February of 2007 and were not getting points until 2009 then you would be compensated $4.40 per point (if you bought Old Key West). In 2008 the dues might be more, of course, however, you (as the buyer) would not be compensated. These listings are not for every buyer out there and we try to be up front explaining these listings.

In response to Carol A the associates try and guide the sellers as to what to price the property. For example, a 150 point package with no points coming until February 2009 might be listed for $95 per point with no dues until 2009. A buyer buying this property does so with no intent of using it until 2009, however, they are using past information to think that if they wait until 2009 they might have to pay $105 per point or whatever the going rate is at that time. Of course, no guarantee price will go up and the price might actually go down. Again, these type of listings are not for every buyer.

Most sellers are not selling because they want to. If we could get all of our listings to come in with banked points, current points and next years points it would make everything easier. We have a wide variety of point listings. The status of points are different and how the dues are paid can be different.

I hope that I was able to add some information and answered some questions.

Thanks again.

 

[CarolA]

Jason,
Since you sold my contact I know you do a good job advising us.

It appears to me that this seller could do a LOT to make this listing more attractive and easier to sell... (like canceling that April 2007 vacation and releasing those points) so I assume that they aren't desperate to sell! LOL!

I was actually leary of selling mine as I had used all but 12 of this years points (50 point contract) but it sold within hours of listing! I think it was also priced right for the deal.

 

[Dean]

In response to Doctor P the annual dues are based on the current years points at the time of closing. For example, if you closed on a property in February of 2007 and were not getting points until 2009 then you would be compensated $4.40 per point (if you bought Old Key West). In 2008 the dues might be more, of course, however, you (as the buyer) would not be compensated. These listings are not for every buyer out there and we try to be up front explaining these listings.

Actually DVC dues are based on the Calendar year and not the use year. When you pay in Dec - Jan, you are paying for the calendar year which will encompass a portion of two use years.

 

[Slakk]

In response to Doctor P the annual dues are based on the current years points at the time of closing. For example, if you closed on a property in February of 2007 and were not getting points until 2009 then you would be compensated $4.40 per point (if you bought Old Key West). In 2008 the dues might be more, of course, however, you (as the buyer) would not be compensated. These listings are not for every buyer out there and we try to be up front explaining these listings.

In response to Carol A the associates try and guide the sellers as to what to price the property. For example, a 150 point package with no points coming until February 2009 might be listed for $95 per point with no dues until 2009. A buyer buying this property does so with no intent of using it until 2009, however, they are using past information to think that if they wait until 2009 they might have to pay $105 per point or whatever the going rate is at that time. Of course, no guarantee price will go up and the price might actually go down. Again, these type of listings are not for every buyer.

Most sellers are not selling because they want to. If we could get all of our listings to come in with banked points, current points and next years points it would make everything easier. We have a wide variety of point listings. The status of points are different and how the dues are paid can be different.

I hope that I was able to add some information and answered some questions.

Thanks again.

While easier to sell for a broker, as a seller it really makes no sense to sell with banked/full points. When I decided to put my contract up for sale (with TSS) I made the decision to use my 2006 points since the difference between full 2006 point contracts and contracts with only 2007 were the same or maybe $1 a point different - we decided to use the points.

 

[CarolA]

Yes, but this seller has not only used the 2006 points, but the 2007 and 2008!!!! That's just a bit much.
It's like "I used all the fun for a few years, but I want you to pay me anyway" If there were NO other contracts out there then MAYBE this would work, but there are several other BCV contracts with about the same number of points where you can USE the points much sooner then 2009!

 

[Slakk]

Yes, but this seller has not only used the 2006 points, but the 2007 and 2008!!!! That's just a bit much.
It's like "I used all the fun for a few years, but I want you to pay me anyway" If there were NO other contracts out there then MAYBE this would work, but there are several other BCV contracts with about the same number of points where you can USE the points much sooner then 2009!

Even if it sells for 90 a point the fact the sellers will still do better by taking a fabulous vacation than allowing the contract to sell with points to spare. I guess we can thank DVC for keeping the value of stripped contracts up.

 

[CarolA]

Even if it sells for 90 a point the fact the sellers will still do better by taking a fabulous vacation than allowing the contract to sell with points to spare. I guess we can thank DVC for keeping the value of stripped contracts up.

Well this one is moving slow. I have watched several other BCV contracts come and go on the TSS listing while this one hangs around.

 

[Slakk]

Well this one is moving slow. I have watched several other BCV contracts come and go on the TSS listing while this one hangs around.

Considering it is unable to close until April I would not think it is unusual...until it can close why would anyone make an offer? That is about 5 months to be tied up waiting.

I have no doubt closer to April it will begin getting action. And no it is not mine