Small but Not to Small Contracts

[Kid_@_50]

My impression of the consensus is multiple small point contracts are better than one larger point contract. If I want or need 250 to 300 points for an 11 month reservation, then this did not seem possible with multiple smaller contracts.

A light bulb flashed while reading another board last night which finally sheds some light on small vs big contracts.

Comparing Q=3, small 100 point contracts at three different resorts with Q=1, big 300 point contract at a single resort.

If you alternate home resorts using a bank (last year), use (this year) and borrow (next year) strategy then you could have an 11 month reservation with 300 points at each home resort.

Is this correct?

Since closing costs must be weighted as a factor, why are multiple smaller contracts often preferred to a single larger contracts?

Thanks in advance for your help and replies.

 

[kristenrice]

Multiple smaller contracts vs. one larger contract have 2 advantages...

First, a single contract cannot be broken up. If you buy a 300-point contract and find that you are only using 200 points, you cannot just "sell" 100 points...it's all or nothing. So, if you have 3 100-point contracts, then, you could just sell one of them, leaving you with 200 points. This also comes into play if you are planning on bequeathing the contract to your heirs. A single contract cannot be split up among your children. You could leave each heir a smaller contract of their own if you own multiple contracts.

Second, if you need to sell, a smaller (<160 points) contract will fetch a higher price per point since it is below Disney's minimum buy in. Many people get their foot in the door by purchasing a small resale contract. We didn't need 160 points and so we bought 100 points via resale.

 

[drusba]

As your lightbulb noted, one reason people buy at different resorts is to use banking and borrowing as you describe.

Smaller contracts are preferred by many because of the resale market. If they ever want to sell, it is easier to sell lower point contracts than higher. Also, you cannot break up a contract to sell -- if you have a 300 point contract it must be sold as a 300 point contract.

Multiple closing costs are an issue except they are not so much for an existing owner. A new purchaser pays closing costs for a purchase from Disney, an existing owner who decides to add on more points does not pay closing costs for the add-on from Disney (Disney absorbs those costs for an add-on).

 

[Tara]

My impression of the consensus is multiple small point contracts are better than one larger point contract. If I want or need 250 to 300 points for an 11 month reservation, then this did not seem possible with multiple smaller contracts.

A light bulb flashed while reading another board last night which finally sheds some light on small vs big contracts.

Comparing Q=3, small 100 point contracts at three different resorts with Q=1, big 300 point contract at a single resort.

If you alternate home resorts using a bank (last year), use (this year) and borrow (next year) strategy then you could have an 11 month reservation with 300 points at each home resort.

Is this correct?

Since closing costs must be weighted as a factor, why are multiple smaller contracts often preferred to a single larger contracts?

Thanks in advance for your help and replies.

The only reasons smaller contracts are useful is if you need to divide up your points for more than one heir or if you are concerned about ease of resale (since smaller contracts sell more easily than larger ones). Some people end up with several small contracts because they add on smaller amounts over time, too. We bought 280 points at BLT and broke it into 160-pt and 120-pt contracts.

Yes, if you have 3 contracts of 100 points each at 3 resorts, you could visit each one every third year and have 300 points to use at the 11-month booking window. I've often pondered buying a 75-point contract at OKW so we could have a grand villa there every third year for 5 nights (Sun-Thurs) in our favorite seasons. Or maybe 75 points for a 1-br for 5 nights in the summer at BCV every other year. Or maybe...you get the point.

 

[chalee94]

My impression of the consensus is multiple small point contracts are better than one larger point contract. If I want or need 250 to 300 points for an 11 month reservation, then this did not seem possible with multiple smaller contracts.

if you have multiple small contracts with the same UY month (they are called "add-ons" to your primary master contract), they all operate as one single contract. the master contract will have a number like XXXXXX and the add ons will have a number like XXXXXX.001, XXXXXX.002, etc.

to be silly, let's say you find a single 25 pt BLT contract resale. then you add-on 11 more 25 pt contracts at BLT. (just to be clear, there are no closing costs when adding on directly through DVC.)

now you want to spend christmas weekend in a GV at BLT...costing 522 pts. you can pool the points from all those separate smaller contracts - including using banked or borrowed pts to book those two nights...just the same as if you had bought a single 300 pt contract.

(this is NOT true, BTW, if the contracts are not treated as add-ons...i.e. if they have different UY months or are purchased resale and titled differently than the master contract. in those cases, the points from different contracts could not be pooled together and could only be used to book separate individual nights.)

 

[Kid_@_50]

Question: When buying add-on points from DVC, can you buy points at a resort different than your home resort? Can you pick a different UY month for add-on points?

Question: When there are multiple contracts, when do they combine under the same master contract number? Same resort? Same UY month? Identical Titles?

(this is NOT true, BTW, if the contracts are not treated as add-ons...i.e. if they have different UY months or are purchased resale and titled differently than the master contract. in those cases, the points from different contracts could not be pooled together and could only be used to book separate individual nights.)

Question: Can resale contracts added to the master contract if they have the same UY month and are titled the same as the master contract?

 

[chalee94]

Question: When buying add-on points from DVC, can you buy points at a resort different than your home resort?

yes.

Can you pick a different UY month for add-on points?

no.

you can buy another contract from DVC with a different UY month but it would have a separate member number, and would have to meet the minimums for a new contract (160 pts).

Question: When there are multiple contracts, when do they combine under the same master contract number? Same resort?

doesn't have to be the same resort, but you can't pool them together to use until 7 months out. the points only have the home resort advantage at their specific home resort.

so if you buy 25 pts at BLT and add-on 25 pts at SSR, the pts from the SSR contract are only good for booking SSR at 11 months and the pts from the BLT contract are only good for booking BLT at 11 months.

Same UY month? Identical Titles?

these could be combined under one member number (or "master contract.") add-ons directly through DVC would have to meet these requirements.

"add-ons" by buying resale would also have to meet these requirements but you'd need to let DVC know early in the process that you wanted the resale contract included under your current master contract as an add-on. they would typically link it to your current member number but if they miss it, it might wind up as a separate master contract and you'd have to use up your single annual transfer to be able to pool the pts to book a single night.

Question: Can resale contracts added to the master contract if they have the same UY month and are titled the same as the master contract?

yes. see above.

 

[tvwalsh]

The people, like me, who refuse to borrow money to make add on purchases have no choice but to buy small add ons.

 

[Caskbill]

Question: When there are multiple contracts, when do they combine under the same master contract number?

Just to clarify, if your multiple contracts are at the same resort, then the points can be combined at the 11-month window.

If the contracts are at different resorts, the points cannot be combined until the 7-month window.

Example: You have 150 OKW points, a 50 point OKW add on, and a 50 point BWV add on.

You can use up to 200 points to make a reservation at OKW at 11-months.
You only have 50 BWV points available to make a BWV reservation at 11-months.

At 7-months, you have all 250 points available to make a reservation at any DVC resort you want.

 

[ELKHUNTER]

When buying an add-on directly from Disney the uy can be set up to match your master contract.