Right decision?

[PicsNPistons]

First time poster but long time stalker of these forums

So much valuable info has been gathered from here and I just thank you all first. Helped my wife and I make the dvc plunge well informed.

After many offers it came down to two for AKV where we wanted to be. One was $80pp with 14pts left and 170pts yearly and the one we ultimately went with was $84pp but with 88pts leftover and 160pts yearly. Both same UY and between differences in closing costs and MFs it was about $250 difference between them.

Reason was 88pts is a nice buffer we can use or bank compared to only 14 even with an extra 10 pts a year. The $80pp on the one we declined is the part that keeps making me question if the decision was right or not. I knew all of you would tell us either way

 

[GrumpyInPhilly]

First: *** Welcome to DISboards! ***

So basically you paid $250 for 74 extra points which if you rented out at a minimum of $11 per point would bring in $814 netting you $564. Sounds like a good deal to me.

 

[PicsNPistons]

Thanks, that's a good way of looking at it for sure. We're happy with it and can't wait to start booking!

 

[com_op_2000]

Wanted to say:
Welcome Home and Much pixiedust

 

[Dean]

First: *** Welcome to DISboards! ***

So basically you paid $250 for 74 extra points which if you rented out at a minimum of $11 per point would bring in $814 netting you $564. Sounds like a good deal to me.

Unless there was a difference in the dues reimbursement in which case the one with the more favorable reimbursement likely is the best choice.

 

[ELMC]

I think you're splitting hairs a bit here. You're talking about a couple hundred bucks on a $15,000 purchase. I say don't sweat it, enjoy your contract and congrats!

 

[LAX]

Am I the only one who compares contracts this way? This is how I would evaluate these two contracts. Excluding the current year, there should be 38 years left on an AKV contract. Hence, the total number of points you would get out of the 170 points contract should be 38 x 170 = 6,460 points plus 14 current points, which would then be 6,474. For the 160 points one, it's 38 x 160 = 6,080 points plus 88 current points, which would be 6,168. That's a difference of 306 points over the life of the contracts. For those extra 306 points, you are only paying an extra $1,845.20 of MFs, which is a little over $6 a point. If the initial purchase cost of these contracts are nearly identical (you mentioned only $250 difference), I would have opted for the 170 points one. Personally, I would have passed on both as I usually don't see good values in stripped contracts.

LAX

 

[mustinjourney]

Am I the only one who compares contracts this way? This is how I would evaluate these two contracts. Excluding the current year, there should be 38 years left on an AKV contract. Hence, the total number of points you would get out of the 170 points contract should be 38 x 170 = 6,460 points plus 14 current points, which would then be 6,474. For the 160 points one, it's 38 x 160 = 6,080 points plus 88 current points, which would be 6,168. That's a difference of 306 points over the life of the contracts. For those extra 306 points, you are only paying an extra $1,845.20 of MFs, which is a little over $6 a point. If the initial purchase cost of these contracts are nearly identical (you mentioned only $250 difference), I would have opted for the 170 points one. Personally, I would have passed on both as I usually don't see good values in stripped contracts.

LAX

What I did to normalize all of the contracts was to assign a value to the points. Contracts missing points from the current UY were docked value of $15 per point (what it would cost me to rent those points on the open market). Contracts that had last year's points banked got a credit of $11 per point (what I could rent those points for easily -- they were going to likely expire soon, so they had limited value).

I then adjusted the price per point based on these calculations. I then started paying attention to closing costs as well if they were included...b/c those seemed to vary quite a bit from one place to another. A $400 difference in closing costs on a 100 point contract is $4 per point -- so it can alter the findings slightly. I also adjusted the pricing to include whether or not MFs were going to be paid by buyer/seller so that it was apples to apples as much as possible.

After that, I then resorted the contracts and started at the top making offers.

 

[LAX]

What I did to normalize all of the contracts was to assign a value to the points. Contracts missing points from the current UY were docked value of $15 per point (what it would cost me to rent those points on the open market). Contracts that had last year's points banked got a credit of $11 per point (what I could rent those points for easily -- they were going to likely expire soon, so they had limited value).

I then adjusted the price per point based on these calculations. I then started paying attention to closing costs as well if they were included...b/c those seemed to vary quite a bit from one place to another. A $400 difference in closing costs on a 100 point contract is $4 per point -- so it can alter the findings slightly. I also adjusted the pricing to include whether or not MFs were going to be paid by buyer/seller so that it was apples to apples as much as possible.

After that, I then resorted the contracts and started at the top making offers.

I think this valuation is only good for comparing loaded vs. stripped contracts with the same number of annual allotted points. However, it will fall short if the contracts have different annual allotments. The available current & banked points are one-time "bonus", but an "extra" 10 points a year can translate into hundreds of points over the life of the contract. Using OP's example, if the initial outlay is the same for both contracts, the slightly more stripped one would still be a better value by my calculations.

LAX

 

[Dean]

I think this valuation is only good for comparing loaded vs. stripped contracts with the same number of annual allotted points. However, it will fall short if the contracts have different annual allotments. The available current & banked points are one-time "bonus", but an "extra" 10 points a year can translate into hundreds of points over the life of the contract. Using OP's example, if the initial outlay is the same for both contracts, the slightly more stripped one would still be a better value by my calculations.

LAX

I don't agree, it's easy to assign a value for every point. The value assigned will be different though, one just needs a consistent valuation plan. For a 50 vs 250 point contract there are other issues but for 160 vs 170 pt contracts with the same UY the only real differences are the points accounting, price per point and other fees including closing. The factors to figure into the REAL cost are the cost per point, closing costs, points reimbursement and points accounting. The other issues outside the base price per point are almost always the make or break components rather than the price per point. One can even, and easily, adjust between contracts of different UY this way, just break it down per month for the one year. Realize that in almost every resale one is overpaying in dues either by reimbursement to the seller or when dues come due in Jan for points one did not have but this can vary. For example, if I were buying a Dec UY now with no points until Dec and reimbursed the seller for dues, I'd be over paying by 11 months of dues. The way to factor this is what would you have paid in dues if buying Direct.

One just needs to assign a value to points in a given situation and use those assumptions consistently. For unrestricted points or points you could certainly use or rent, I'd use somewhere in the $10-15 a point range, currently I'm using $12 but one could even adjust it a little for different home resorts if desired. For restricted points, I'd use a lower number, somewhere in the $5 a point range though I'd give essentially no value to points I might not have time to use or rent out. One thing to be cautious about doing this is not to count double on the dues because the $12 a point would include dues on those points.

It's generally a mistake to decide or or chose against contracts based on current availability unless they also the better deal or at least equal though loaded contracts tend to be a better value than stripped contracts. I'm assuming both contracts fit the need for the OP and I'll assume closing is the same and ignore price per point since that's up front. So let's assume the OP is buying a Dec UY with 160 points fully loaded (320 now & 160 in coming in Dec) and reimbursing full dues vs Dec 160 with no points until Dec, 18. The 170 point contract should be roughly $3500 cheaper at closing to be apples to apples assuming part of the contract is to bank this years points. That's $12 pp to the fully use points, $5 pp for the banked points (and that may be generous in May) subtracting out the full years dues. It also takes into account one is going to pay 11 months of dues in Jan they didn't have the use of on the 170 pt contract in this example.

 

[CarolMN]

PicsNPistons - It's a done deal and no good can come from second guessing yourself now. THERE WILL ALWAYS BE A BETTER DEAL OUT THERE AND THERE WILL ALWAYS BE A WORSE DEAL. Don't make yourself crazy by continuing to stress over not getting the best possible deal!!!

Now is the time to start planning those trips and enjoying your purchase.


Congratulations and WELCOME HOME!

 

[Dean]

PicsNPistons - It's a done deal and no good can come from second guessing yourself now. THERE WILL ALWAYS BE A BETTER DEAL OUT THERE AND THERE WILL ALWAYS BE A WORSE DEAL. Don't make yourself crazy by continuing to stress over not getting the best possible deal!!!

Now is the time to start planning those trips and enjoying your purchase.


Congratulations and WELCOME HOME!

But I think discussing the issues is helpful for others, almost always that's the approach I take when I address issues on a BBS.

 

[Matty B13]

There is also the variable of the seller, some will come down a lot off of their asking price, others won't budge. And most prices are high, except Fidelitys.

 

[Dean]

There is also the variable of the seller, some will come down a lot off of their asking price, others won't budge. And most prices are high, except Fidelitys.

In many ways the seller is somewhat irrelevant once one decides what they need, what the value of a given contract is and what they're willing to pay. Then your in the drivers seat and you remove much of the emotion from the process. The only question is whether you'll buy from this seller or not. The listing company is likely a far bigger issue, IMO some have somewhat artificially increase the resale price and at times have refused to take listings that were offered for a lower price.

 

[PicsNPistons]

Thanks for all the replies. I won't lie it's been driving me crazy as I can still change my mind and switch.

Just to add more info for discussion:

170 package has greater closing costs but no MF due to the small points amount.
160 has less closing costs but MF on the 88 points for 2017.

UY is FEB on both which is perfect for us and our 2017 trips are done and paid for so we're concerned with 2018 and beyond. The 88 points appeal is that since we won't be able to book at 11 months for a spring trip we may have to put additional points toward that trip which this would offset for sure.

The 170 package comes out about $250 less upfront but of course over time costs more though yes you do get the extra 10 points. 160 is more than enough for us so the extra 10 isn't a huge deal but obviously we could rent or bank them.

We are extremely happy to be able to get any good deal and can't wait to be able to start booking and enjoying it

 

[Matty B13]

In many ways the seller is somewhat irrelevant once one decides what they need, what the value of a given contract is and what they're willing to pay. Then your in the drivers seat and you remove much of the emotion from the process. The only question is whether you'll buy from this seller or not. The listing company is likely a far bigger issue, IMO some have somewhat artificially increase the resale price and at times have refused to take listings that were offered for a lower price.

Do you mean offers???? or Listings? I know last year, we got turned down cold by one broker with no counter offer at all. I thought the broker would have been a little more willing to haggle since we just bought a VGF contract from them 3 months earlier.....

 

[mustinjourney]

Do you mean offers???? or Listings? I know last year, we got turned down cold by one broker with no counter offer at all. I thought the broker would have been a little more willing to haggle since we just bought a VGF contract from them 3 months earlier.....

Aren't they legally required to submit all offers?

 

[Dean]

Thanks for all the replies. I won't lie it's been driving me crazy as I can still change my mind and switch.

Just to add more info for discussion:

170 package has greater closing costs but no MF due to the small points amount.
160 has less closing costs but MF on the 88 points for 2017.

UY is FEB on both which is perfect for us and our 2017 trips are done and paid for so we're concerned with 2018 and beyond. The 88 points appeal is that since we won't be able to book at 11 months for a spring trip we may have to put additional points toward that trip which this would offset for sure.

The 170 package comes out about $250 less upfront but of course over time costs more though yes you do get the extra 10 points. 160 is more than enough for us so the extra 10 isn't a huge deal but obviously we could rent or bank them.

We are extremely happy to be able to get any good deal and can't wait to be able to start booking and enjoying it

IMO one needs a buffer of at least 10% points so unless the 160 provides that buffer, I'd go with the 170 if it was truly equal financially. For Feb the UY doesn't make much difference in the dues issue since you're either getting 11 months of giving up 1 month, not enough to make a difference. IF they both work I'd ignore the difference in price otherwise and compare the accounting. In this case if you just compare the difference in price per point and the differences in closing, you should be good. So the 160 point contract costs $640 more ($4 pp * 160), has more points = to about $800 ($12 pp * 160 - dues reimbursement) then whatever the closing cost difference it. Thus if they both truly work for you, I don't think it matters at all assuming all 2018 points are present, there are no other issues like bankruptcy, upside down mortgage, waiting to close on a trip or the like. Just build in banking as part of the contract in case it takes a while.

Do you mean offers???? or Listings? I know last year, we got turned down cold by one broker with no counter offer at all. I thought the broker would have been a little more willing to haggle since we just bought a VGF contract from them 3 months earlier.....

Both actually, I think your experience is characteristic of 1 or 2 companies. Since there's no reason to offer fire sale prices with DVC due to ROFR, this generally isn't something that should be insulting to anyone even if it is below what the broker feels they could get. The difference is just not going to be that much.

Aren't they legally required to submit all offers?

My understanding is yes unless they have prior instructions in writing.

 

[PicsNPistons]

Aren't they legally required to submit all offers?

I will say, having just gone through this process with a handful of brokers, that I definitely got pushback from some when trying to submit an offer. Sometimes major pushback and I had to insist it was presented and even then I have little faith it was presented 100% or in a positive light.

Luckily there are some fantastic brokers out there that seem to work well with both sides!