Resale - no points until 2012? How can that be?

[Luv2Scrap]

"50 points coming on 2/1/12 and 50 points coming on 2/1/13. Can close 2/17/10. Priced at $105 per point."

I'm still researching and learning, so can someone please tell me how this resale package could have already been drained of the 2011 points? Can't you only borrow 2010 points in 2009?

Thanks for the help!

 

[RobDoc]

It sounds as though they have borrowed the 2011 points for a trip ending on or before 2/17/10. With a February Use Year, a trip in early February, 2010 would be able to use points borrowed from the 2011 Use Year.

By placing the limitation of February 17 they would be able to take the trip prior to selling the contract since any existing reservations would be cancelled otherwise.

This is what is referred to as a "stripped" contract - no banked points, no current points and all points borrowed already from the following use Year.

 

[Luv2Scrap]

Oh, gotcha! While I would love a 50 pt contract at BLT to get me started in the world of DVC, I certainly don't want one stripped this badly!

Thanks!

 

[Jason@dvcstore]

"50 points coming on 2/1/12 and 50 points coming on 2/1/13. Can close 2/17/10. Priced at $105 per point."

I'm still researching and learning, so can someone please tell me how this resale package could have already been drained of the 2011 points? Can't you only borrow 2010 points in 2009?

Thanks for the help!

The key thing to remember is that you don't have to wait for your "use year" to start to make your reservations. For example, with an October use year I could call today and make a reservation for 10/10/10 using 2010 and borrowing from 2011 and I wouldn't have any points until 2012 as well.

As a buyer for DVC you have lots of choices. You can choose to buy resale or buy from Disney. You can choose from 10 different resorts. You can choose to own as few as 25 points and some listings as high as 1000 points. As a buyer I would wait until you find a listing that fits your exact needs.

Best of luck to you in your search.

Jason

 

[kristenrice]

We have a Feb UY and we are taking a trip in April 2010. We are using all of our 2009, 2010 and 2011 points for that trip. So, I cannot take a trip on MY points until after Feb 2011, which is when borrowed points from 2012 would become available.

The same would apply in this scenario. There are points available for a trip in 2011. They would have to be borrowed from 2012 though.

Good Luck with your purchase decision! Hopefully, you'll get a "Welcome Home" soon.

 

[lark]

One thing you want to take note of with a stripped contract is who is responsible for dues. If you buy a contract that has no points for 2 years, but be responsible for the maintenance fees, you're basically paying another $8 per point to buy, because you're paying that $8 over 2 years for points you cannot use.

 

[browniemtb]

One thing you want to take note of with a stripped contract is who is responsible for dues. If you buy a contract that has no points for 2 years, but be responsible for the maintenance fees, you're basically paying another $8 per point to buy, because you're paying that $8 over 2 years for points you cannot use.

Good point.......Also don't stripped contracts go for a little less...$105 seems steep. If you go for this make sure you negotiate the due like lark stated, make the previous owners pay up or reduce the selling price to make up the two years.

 

[BWV Dreamin]

You can not be responsible for dues that are not available for you to use. Where one would negotiate on dues is for CURRENT, available points. On a stripped resale contract, the seller will always be responsible for those points stripped, or not available. Again, closing and current points dues are the negotiating areas.

 

[DebbieB]

You can not be responsible for dues that are not available for you to use. Where one would negotiate on dues is for CURRENT, available points. On a stripped resale contract, the seller will always be responsible for those points stripped, or not available. Again, closing and current points dues are the negotiating areas.

You have to negotiate a reimbursement for dues the seller will be paying, it's not automatic. The seller would have to pay the 2010 dues before closing, since they are due 1/15/10. The 2011 bill will go to the buyer (since they are the owner of record when the dues bill is issued), so you would have to figure a reimbursement for the seller to pay and build it into the contract. Maybe Jason could explain how that is done.

 

[BWV Dreamin]

You have to negotiate a reimbursement for dues the seller will be paying, it's not automatic. The seller would have to pay the 2010 dues before closing, since they are due 1/15/10. The 2011 bill will go to the buyer (since they are the owner of record when the dues bill is issued), so you would have to figure a reimbursement for the seller to pay and build it into the contract. Maybe Jason could explain how that is done.

That is only if there are partial dues available...again, the new owner will only be responsible for dues on points currently available (or they can negotiate that away to the seller.)

 

[lark]

That is only if there are partial dues available...again, the new owner will only be responsible for dues on points currently available (or they can negotiate that away to the seller.)

Once the timeshare is in your name, you are responsible for the dues. If you see a listing that can close now but has no points until 2012, how are you going to force the seller to pay your dues when you get your bill in 2011 and 2012? As a matter of fact, you can't even know what the dues will be in those years. Are you saying that DVC will force the seller to prepay 2 years of dues before they will allow the transfer? That's not true. Once the new buyer takes title, the new buyer will get the dues invoices in 2011 or 2012. DVC doesn't care whether the points were available or not.

Anything is negotiable in the sale.

 

[BWV Dreamin]

Once the timeshare is in your name, you are responsible for the dues. If you see a listing that can close now but has no points until 2012, how are you going to force the seller to pay your dues when you get your bill in 2011 and 2012? As a matter of fact, you can't even know what the dues will be in those years. Are you saying that DVC will force the seller to prepay 2 years of dues before they will allow the transfer? That's not true. Once the new buyer takes title, the new buyer will get the dues invoices in 2011 or 2012. DVC doesn't care whether the points were available or not.

Anything is negotiable in the sale.

You can't force the payment for something that the new owner will not have "owned". All dues will be paid before closing. This will come out of the sellers proceeds. Any changes in the proposed dues amount after Jan 1st. will then be due by the buyer.

 

[lark]

You can't force the payment for something that the new owner will not have "owned". All dues will be paid before closing. This will come out of the sellers proceeds. Any changes in the proposed dues amount after Jan 1st. will then be due by the buyer.

The buyer and seller can agree on any terms they want. The seller can list for a price at which the dues on a stripped contract will be the buyers' responsibility or the seller can offer to prepay dues as part of the closing. Nobody is forcing anyone to do anything. A buyer never has to agree to terms he or she doesn't want.

 

[BWV Dreamin]

The buyer and seller can agree on any terms they want. The seller can list for a price at which the dues on a stripped contract will be the buyers' responsibility or the seller can offer to prepay dues as part of the closing. Nobody is forcing anyone to do anything. A buyer never has to agree to terms he or she doesn't want.

This is an unrealistic scenario in which a contract will never get sold under those terms. Realistically, no buyer will ever pay dues for points they don't own. Closing, yes. As a seller, you should never expect the buyer to pay for points they don't own if you want to sell your contract. Some brokers will not even entertain listing your contract if you ask the buyer to pay dues on points that are not available to the buyer. Again, at best, you can realistically expect the buyer to pay PRORATED dues on points left in the CURRENT UY.

 

[DebbieB]

A friend of mine sold a stripped contract. I'm pretty sure they negotiated an amount for the future dues (for example, a 3% increase over current year) and it was subtracted from the cost. I agree with Lark, you can configure it anyway you want. The buyer could agree to pay the dues in return for a lower per point cost or have it written as dues reimbursed by the seller as a separate amount. But in any case the 2011 bill will go to the buyer, DVC is not going to bill the previous owner.

 

[lark]

A friend of mine sold a stripped contract. I'm pretty sure they negotiated an amount for the future dues (for example, a 3% increase over current year) and it was subtracted from the cost. I agree with Lark, you can configure it anyway you want. The buyer could agree to pay the dues in return for a lower per point cost or have it written as dues reimbursed by the seller as a separate amount. But in any case the 2011 bill will go to the buyer, DVC is not going to bill the previous owner.

Yeah that's a good exampe-- I'm not even sure what we're discussing. Assuming $4 dues, for example, for a contract with 2 years of points stripped there's no real difference between (1) a contract price of $90 with buyer to pay dues, or (2) a contract price of $98 with seller to prepay estimated $4 dues on closing. It's the same contract. I guess one difference might be that ROFR is more likely on the former, but I suspect disney can understand the simple difference.

My point much earlier in the thread was to make sure you understand whether the advertised price on a stripped contract includes prepaid dues or not. TSS listings seem to be pretty good about listing when dues will be paid by seller on stripped contracts. (For example, the stripped contracts sometimes say "no dues until ___." Naturally, these seem to be listed for higher prices.) So, back to the original contract, my guess is that the $105 listing price on BLT potentially has the buyer on the hook for 2011 dues despite not getting points.

Still, that's a pretty good contract -- effectively $109 to buy into BLT for a small contract, which is pretty desirable. If you can wait on the points, it's good for a new member who wants a small initial contract. It's still $6 per point less than even a member add on with incentives.

 

[chalee94]

You can't force the payment for something that the new owner will not have "owned". All dues will be paid before closing. This will come out of the sellers proceeds. Any changes in the proposed dues amount after Jan 1st. will then be due by the buyer.

please stop.

in the case being discussed - where the contract would close in feb 2010 but no points would be available until feb 2012, the buyer would owe dues for most of 2010 and all of 2011 regardless of whether those pts were used previously. DVC will, in fact, "force payment" of those dues from the new buyer for 2 years to keep the contract current so that they can use those 2012 pts.

 

[Jason@dvcstore]

You have to negotiate a reimbursement for dues the seller will be paying, it's not automatic. The seller would have to pay the 2010 dues before closing, since they are due 1/15/10. The 2011 bill will go to the buyer (since they are the owner of record when the dues bill is issued), so you would have to figure a reimbursement for the seller to pay and build it into the contract. Maybe Jason could explain how that is done.

If a buyer were buying a 100 point listing at Saratoga Springs with no points coming until 2012 then at the time of closing (assuming some time in 2010) the dues for 2010 and 2011 would show as a credit to the buyer (200 x $4.46 = $892). This would come out of the sellers proceeds. Of course, the $4.46 figure is the amount for 2010. The amount for 2011 will most likely be higher but the new buyer would have to pay the difference. We would not go back to the seller at that point.

I hope that makes sense.

Jason

 

[lark]

If a buyer were buying a 100 point listing at Saratoga Springs with no points coming until 2012 then at the time of closing (assuming some time in 2010) the dues for 2010 and 2011 would show as a credit to the buyer (200 x $4.46 = $892). This would come out of the sellers proceeds. Of course, the $4.46 figure is the amount for 2010. The amount for 2011 will most likely be higher but the new buyer would have to pay the difference. We would not go back to the seller at that point.

I hope that makes sense.

Jason

[Unfunny commission joke removed.] Thanks for the explanation and happy holidays!

 

[BWV Dreamin]

If a buyer were buying a 100 point listing at Saratoga Springs with no points coming until 2012 then at the time of closing (assuming some time in 2010) the dues for 2010 and 2011 would show as a credit to the buyer (200 x $4.46 = $892). This would come out of the sellers proceeds. Of course, the $4.46 figure is the amount for 2010. The amount for 2011 will most likely be higher but the new buyer would have to pay the difference. We would not go back to the seller at that point.

I hope that makes sense.

Jason

Thanks! You explained this perfectly.