Skunked by ROFR

[CRobin]

Originally posted by JohnNJ
I'll just keep trying.

And, John, as long as you're willing to do that, then you should.

I am probably the voice of dissention here, but I pay little heed to the posts that advise all kinds of calculations relative to banked and borrowed points, who pays closing costs, etc.

Two reasons:

1). This is not like buying a house. You have a guy lurking in the corner who can take your bid and then you walk away and start over.

2). Work the math. Take all of your purchasing expenses, with the asking price and your best price. Throw out the borrowed and banked points; start with the first full use year. Then divide by 40, 39, 38 years, whatever.

The difference in my numbers come in pretty insignificant when I consider the big (40 year) picture. I have purchased 3 resales. I offered a buck or two lower than the asking price. I got it once, and paid the asking price twice.

Do I care ? Not a bit. This isn't my business, this is my vacation. I'm not into this to make sure I get the last possible nickle out of the seller, and hey, if the guy makes a buck, good for him. I don't feel in any way that I left money on the table. This is all about value.

The bottom line is, what is the value in it for you, and is it worth your time to restart the purchasing process and try and chase down another contract that looks good for you ?

 

[JohnNJ]

Thanks for all of the good advice.

I would not pay more (per point or annual fees) just to get the sale past Disney's ROFR. If I wanted to pay top dollar, I'd buy direct from Disney. I'm looking for a bargain from resales.

OTOH, my advice to sellers would be not to borrow all of your points and then try to sell for top dollar. There are sellers that have borrowed points (this year and next) and then used them or rented them out before putting the contract up for sale. They're trying to maximize their profit, which is fine, but not on my dime. You want top dollar, have some banked points or at least all of this year's points available now.

I like DVC but I'm not going to make a deal I'm not comfortable with just to get in.

For now, I'll continue to vacation at BWV using my AP discount. It took me four years to make the decision to buy in. It may take another four years before I try again. I'm not in any hurry.

 

[WDWorld2003]

I'm just wondering......

If you bid on a contract with 2002 & 2003 points and paid $73 a point plus main. & closing costs - wouldn't it really be less expensive than the contract at $65 with no or only a few points available even if the seller paid closing and main.?

270 points @ $73 points $19,710
Main. for 2003 1,107
Closing (approx.) 540
Total $21,357

However, you have 540 more points available for use or rent than a stripped contract. These points are worth approximately $5,400 if you were to rent them for $10/pt, making the cost of the contract $15,957 or $59/point, more or less depending on banked points....... This would also depend on use year, a March use year would have more value to me than a December use year because the points would be available much sooner.

Please correct me if my math wrong, is wrong but that's how we came to the conclusion to buy resale......

 

[JohnNJ]

My calculations brought my perceived point value to $52 per point also because I was not paying 2003 or 2004 maint. and was not paying closing cost or transfer fee. Plus I got 80 points in 2004 I could rent out. I really didn't want the 2003 points and could have borrowed in 2004 but I really considered this a 2005 contract.

270 x $65 = $17,550

minus 540 (2003 & 2004) x $4.10 maint. = $2,214

minus closing/transfer fees = $475

minus 80 rentable points (no maint. paid) = $800

Total $14,061 / 270 = $52 (pervceived value)

There's no end to how you could use creative accounting to justify a purchase.

 

[Dean]

Compared to buying the same contract with 2003 and 2004 points, buyer paying fees and closing then renting the 2003, 2004 points, you'd have to compare to paying $74 pp or slightly more. So the same resale at $70-72 pp would be a better deal than this one. Besides, you're still paying the dues on the 80 points and then some when the 2005 due scome due.

 

[JimC]

Sorry you lost the contract. But the hunt is half the fun

I look at what I have to pay to acquire the remaining points over the term of the contract (ie 300 point contract over 39 years is 11,700 points). I adjust for current, banked and borrowed points so I can value the points that I get to use.

The amount I pay inlcudes the asking price plus any closing costs and any deferred maintenance fees that seller wants the buyer to pay. Divide the total dollars paid by the total points acquired and you have a true price per point. I wanted to be around $1.50 - $1.55 per point last summer when I bought the OKW contract. Almost everything was above $1.60, and those below did not have the right size contract or were not OKW, which was the resort we wanted. We finally found one that was right size, right resort, had been listed for some time and we got it for $1.59. Higher than we were originally willing to pay, but DVC was buying with ROFR around that price for OKW contracts then. Faced with that you either adjust up or don't buy.

 

[WDWorld2003]

But JohnNJ, you're not getting 2 years of points so I don't think the $52 per point in 2005 compares with buying a contract with banked points in 2003..... even with paying maintenance costs. Plus, if you go to Disney you'll already have points to use instead of renting.

We're thrilled with our BWV resale - we will probably have to rent our 200 banked 2002 points but are happy that we have an additional 540 points to start with in March 2004. It will give us plenty of banked points for the future.

Best of luck on your next resale - and Jim C is right, half the fun is the hunt!

 

[JohnNJ]

Originally posted by Dean
Compared to buying the same contract with 2003 and 2004 points, buyer paying fees and closing then renting the 2003, 2004 points, you'd have to compare to paying $74 pp or slightly more. So the same resale at $70-72 pp would be a better deal than this one. Besides, you're still paying the dues on the 80 points and then some when the 2005 due scome due.

Dean:

I was not paying any dues for 2003 and 2004. Not even on the 80 points.

Using your assumptions and your lowest bid of $70:

270 x $70 = $18,900

plus 540 x $4.10 = $2,214 (2003 & 2004 dues)

plus closing & transfer fees = $475

Total cost = $21,589

minus rent 540 x $10 = $5,400

Final cost = $16,189 / 270 = $60 per point

At $72 per point the final amount would be $62.
At $74 per point the final amount would be $64.

How does this compare to my calculation of perceived value at $52 per point?

Now if we forget the above for a minute and calculate the actual number of points available over the life of the contract divided into the actual dollars paid...

1) All points available from 2003 to 2041 = 10,530 points

Your figure of $70 per point plus all dues & closing costs = $21,589.

$21,589 / 10,530 = $2.05 per point

2) My bid - No points for 2003, only 80 for 2004 plus all from 2005 until 2041 = 10,070 points

At $65 per point (no other costs) = $17,550.

$17,550 / 10,070 = $1.74 per point

$2.05 vs $1.74 without renting any points. If you rent the 540 from the one vs 80 from the other it becomes $1.62 vs $1.68 with your scenario having a slight advantage. Problem is I would never rent the points. I'd use them, as most people would, and I find it hard to believe that everyone get $10 per point rent. At $8.75 per point rent the two become dead even.

Anyone else have another method of comparison?

John

 

[Dean]

Originally posted by JohnNJ
Dean:

I was not paying any dues for 2003 and 2004. Not even on the 80 points.

Using your assumptions and your lowest bid of $70:

270 x $70 = $18,900

plus 540 x $4.10 = $2,214 (2003 & 2004 dues)

plus closing & transfer fees = $475

Total cost = $21,589

minus rent 540 x $10 = $5,400

Final cost = $16,189 / 270 = $60 per point

At $72 per point the final amount would be $62.
At $74 per point the final amount would be $64.

How does this compare to my calculation of perceived value at $52 per point?

Now if we forget the above for a minute and calculate the actual number of points available over the life of the contract divided into the actual dollars paid...

1) All points available from 2003 to 2041 = 10,530 points

Your figure of $70 per point plus all dues & closing costs = $21,589.

$21,589 / 10,530 = $2.05 per point

2) My bid - No points for 2003, only 80 for 2004 plus all from 2005 until 2041 = 10,070 points

At $65 per point (no other costs) = $17,550.

$17,550 / 10,070 = $1.74 per point

$2.05 vs $1.74 without renting any points. If you rent the 540 from the one vs 80 from the other it becomes $1.62 vs $1.68 with your scenario having a slight advantage. Problem is I would never rent the points. I'd use them, as most people would, and I find it hard to believe that everyone get $10 per point rent. At $8.75 per point rent the two become dead even.

Anyone else have another method of comparison?

John

First, dues are paid on a calendar year basis so you are paying on 3 months of the points in 2005 from the 2004 use year. That's roughly equivilent to the 80 points so you're not getting them free. At $74 pp and renting 2 years of points, that is about $64 pp which is about the same as the contract mentioned in the OP. It's fair to reduce by the rental fee on the $80 pp. Point being it wasn't a great price, only a fair price if it was what you wanted and you didn't need the points, which you stated.

 

[JohnNJ]

Sorry Dean. I'm not following you. Can you post the actual figures and calculations that led you to that conclusion? That would make it easier for me to understand.

Thanks, John

 

[Dean]

$74 pp purchase
-10 pp rental on 2003 points
+4 pp dues on same points
-10 pp rental on 2004 points
+4 pp dues on same points
+2 pp (roughly) closing costs
_____
$64 pp (approximate)

Of course this is appoximate as the dues would be slightly more and closing slightly less. The point was that a contract with current points at $70-72 pp plus buyer paying closing would have been as good or better deal, depending on specifics. Or to say that this was not a great deal though workable if it fits your needs otherwise. Each contract must be evaluated on it's on merrit. Good luck.