Selling 100 point vs 2 50 pt. contracts.

[bobbiwoz]

From a sellers standpoint, is there anything negative about selling 2 50 point contracts vs. selling a single 100 pt. contract?

We haven't sold any, and we would like to buy 100 AKV points. I am thinking that in 10 -15 years, we will be in our 70's and probably will not be going to WDW as much as we will between now and then, and we will probably be selling some points, most likely the AKV because they will have more time left. While closing costs are negotiable, what is the present charge (approx. if not exact) for selling a 50 point contract, and a 100 point contract. Has anyone done either recently? Does the closing cost vary according to dollars spent?

Bobbi

 

[Caskbill]

The commissions would be similar as it's usually about 10%.

Closing costs for two contracts would probably be close to double the closing costs for a single contract. Normally, the buyer pays the closing costs.

Sometimes smaller contracts are more attractive to buyers who just want to add a few points, and a 50 point contract may sell easier. Just a guess.

 

[bobbiwoz]

The commissions would be similar as it's usually about 10%.

Closing costs for two contracts would probably be close to double the closing costs for a single contract. Normally, the buyer pays the closing costs.

Sometimes smaller contracts are more attractive to buyers who just want to add a few points, and a 50 point contract may sell easier. Just a guess.

Thank you. I think we're going to go with the 100 pt. contract.
Bobbi

 

[robinb]

I don't think there is any more work in selling a 50 point contract. I bought 2 50-pointers myself because I think there is more of a market for the smaller contracts.

Here is a snap-shot of my Excel spreadsheet for recent sales between 50 and 100 points that passes ROFR:

Name Points Resort Year Price 2005 2006 2007 2008
Cropper 50 BWV (Aug) $89 0 22 50 50
rlduvall 50 HHI (Apr) $76 0 0 50 50
springandmac 50 HHI (Dec) $76 0 0 50 50
korbbec 50 OKW (???) $85 0 50 50 50
bell1627 50 OKW (Oct) $87 50 50 50 50
LoriBW 50 VWL (Dec) $93 0 50 50 50
mydogdrew 50 VWL (Aug) $95 0 50 50 50
Judy 62 VWL (Dec) $89 48 62 62 62
AngB 70 BCV (Dec) $99 0 0 70 70
Jacky 75 BCV (Apr) $88 0 0 0 100
KristineN 100 BWV (Oct) $85 0 0 100 100
kdzgon 100 HHI (Apr) $75.50 0 36 100 100
ssonley 100 SSR (Feb) $86 0 0 100 100
homedad 100 VWL (Jul) $90 100 100 100 100
beachwarmer 115 VWL (Mar) $85 0 0 115 115

 

[calypso*a*go-go]

Just curous about this -- could Disney ever stipulate that any *new* contract owner could not buy in with less than "X" amount of points regardless of whether it was direct or resale? I don't know if I worded that correctly but my intention is to see if at some point small contracts could only be purchased via resale by existing members. If that were ever the case, it might create a problem for all the people that are looking to get their foot in the door by buying really small contracts (thus taking away that extra few dollars per point these contracts are bringing in).

 

[kdzgon]

I don't think there is any more work in selling a 50 point contract. I bought 2 50-pointers myself because I think there is more of a market for the smaller contracts.

Here is a snap-shot of my Excel spreadsheet for recent sales between 50 and 100 points that passes ROFR:....[/FONT]

I agree there are no real disadvantages and several advantages to purchasing smaller contracts from Disney, especially if doing an add-on.

One thing missing in the chart (good or bad) are the handling of closing costs &/or MFs, which can change the true per point cost by a measurable amount. My gut feeling was Disney would not weight the closing costs as much as the per point price, so we made our adjustments in the handling of closing costs & MFs rather than in the price per point. Anyone have better info as to whether Disney does indeed consider the value of closing costs and fees?

 

[LisaS]

Just curous about this -- could Disney ever stipulate that any *new* contract owner could not buy in with less than "X" amount of points regardless of whether it was direct or resale? I don't know if I worded that correctly but my intention is to see if at some point small contracts could only be purchased via resale by existing members. If that were ever the case, it might create a problem for all the people that are looking to get their foot in the door by buying really small contracts (thus taking away that extra few dollars per point these contracts are bringing in).

I asked this same question a few days ago and for this same reason. I wanted to be sure that if I broke my 100-pt add-on into two 50-pointers, I wouldn't be at risk of not being able to sell them if Disney had some way of preventing new members from joining by buying small resale contracts (other than by exercising ROFR as we've seen them do on many small resales).

The answer I got was that Disney's only option to prevent this is to exercise their ROFR on the deal. If they pass on the deal, they could not restrict that person from becoming a member. I'll see if I can find that thread so you can see Doc's actual response but the new search facility doesn't work too well for me...

ETA: I found it! (Under UserCP you can get a list of your subscribed threads so I was able to find it in there!)

http://www.disboards.com/showpost.php?p=16643264&postcount=16

 

[tor]

I wanted to be sure that if I broke my 100-pt add-on into two 50-pointers, I wouldn't be at risk of not being able to sell them if Disney had some way of preventing new members from joining by buying small resale contracts (other than by exercising ROFR as we've seen them do on many small resales).

Can contracts be broken up or do they always stay the size they were purchased?

 

[robinb]

They always stay the size they were purchased. Which is why it also makes sense to buy smaller contracts instead of big contracts. It's easier to sell off some points and keep some points.

 

[calypso*a*go-go]

Thank you Lisa -- That's exactly what I was looking for. I was trying to hold out for a small add-on @ Disneyland (if that ever comes to be) but those African drums appear to be getting louder and louder!

 

[drusba]

Whether the commission would be the same for one 100 point sale and two 50 point sales depends on the timeshare broker you deal with. Timeshare brokers, even those who take a percentage, often have a minimum commission per sale, e.g., $1,000, and if you use a broker like that the cost of the two 50 point contracts could be higher than the sale of one 100 point contract.

 

[Caskbill]

Just curous about this -- could Disney ever stipulate that any *new* contract owner could not buy in with less than "X" amount of points regardless of whether it was direct or resale? I don't know if I worded that correctly but my intention is to see if at some point small contracts could only be purchased via resale by existing members. If that were ever the case, it might create a problem for all the people that are looking to get their foot in the door by buying really small contracts (thus taking away that extra few dollars per point these contracts are bringing in).

Probably not, because ownership is a legal issue, and I don't see any way they could stop someone from buying a 50 point contract as their first contract. ROFR would be the only thing they could use.

However, I do see that they could say that only members who own a total of 150 points or more are eligible for full member benefits. Thus to get the discount on the AP you'd have to own at least 150 points. Or to get any of the member perks/discounts.

This would address the issue where some members purchase very small contracts resale (eg 25 points), and then get discounts on AP's for a family of 6 people.

The reason they might do this is to discourage members from owning only a single extremely small contract. For example, the dues on a 25 point contract might be arount $110/year. But the cost to DVC to maintain that account could easily exceed that amount. Thus other members wind up subsidizing the member who only owns 25 points.

Just .02

 

[LisaS]

Can contracts be broken up or do they always stay the size they were purchased?

Sorry for the confusion! What I meant was that I planned to buy 100 points at AKV and was debating whether I should purchase one 100-pt contract or two 50-pt contracts. As Robin already posted, if I buy one 100-pt contract then I cannot break it up later. If I ever want to reduce the number of points I own, I would have to sell all 100 points. If I purchase two 50-pt contracts, I can opt to sell one of those contracts.

 

[jemiaule]

From my personal experience 50 point contracts sell faster and at a higher price.

I had 3 contracts to sell, two at 50 points and one at 150. The 50 pointers sold the first day and at $4 per point higher than the 150.

When I bought my AKV contracts I let my guide know I wanted them as three individual 50 pointers. Not planning on selling them any time soon but based on my past experience I felt this was the better route to go.

The other point to consider is if you have children and some day want to give them some of your points. If you do smaller contracts you can then give each child one. This was also my thought when I bought AKV; I can give each f my kids a contract someday and keep one for me and DH.