Stripped Resale Contract

[mdsd8700]

I have a quick question. We are currently in the process of purchasing BLT from resale at the Time Share Store. We are reviewing the paperwork we received last night now. I have been reading the boards the last few days like a fiend trying to make sure I know everything I should. I have come across a couple of posts that say somehting like a "stripped resale contract" can someone tell me what that means? How do I know if the contract I am considering is stripped? Is there a way to spot a stripped contract? Thanks.

 

[A_Princess'_Daddy]

My understanding is that if all the current year's points have been used, and all of next year's points have been borrowed and used, it is considered stripped, because you won't have any points until 2012.

We have a 250 point contract in front of DVC right now for ROFR review, for example, that is coming with 250 points for the current year and will be getting 250 more in December of 2010, so I would consider it to be loaded. Or, I suppose it could be more loaded if it came with banked points from the year before, but we're happy with what it appears we'll be getting.

Lots of people on this board know lots more about this than me (we're just a few steps ahead of you in the process), so I'm sure they'll chime in if I'm wrong!

 

[mdsd8700]

Aaah that makes sense, thanks so much. You are correct that everyone here is a wealth of information and I love it. I could read for hours! Our contract has this years points available as well as next years, so we should be good. I just wanted to make sure that I know as much as I can before I actually take the leap.

 

[DenLo]

A stripped contract is referring to those that there are no points for 2009, 2010 and sometimes 2011. Many of BLT contracts on resale only have points available for use in 2012. By having a stripped contract that only has 2012 points you cannot make a reservation for any dates before the first day of your UY in 2011, as you can borrow the 2012 points for 2011. But then you will always be in a borrow mode. I'd also make sure that the seller will be paying the 2011 annual dues (it would have to be in your contract as a reinbursement).

Conversely, a loaded contract includes points for 2009 and 2010.

Good luck with your contract.

 

[Checkers]

A stripped contract is one that has no (or very few) current year points left or could even have borrowed points from the next year. We have purchased resale 2 times and were fortunate that all current UY points were available with no "borrowed" points used from the next UY.

If a contract is stripped, buyer should not have to pay maintenance fees for points that were already used.

Hope that answers your question. If this is not correct I hope that someone will correct me but this has been my experience.

 

[mdsd8700]

Thanks, you guys are awesome. Quick question though DenLo mentioned that the sellar should be paying the 2011 annual dues. I am all for saving money, but why would they want to pay dues for something they no longer own? Since there are still points for this year, I would think we are responsible for the 2010 dues also since the sellers are not using it. Again, complete newbie here and welcome any guidance and advice. Thanks.

 

[Disneypubgal]

Thanks, you guys are awesome. Quick question though DenLo mentioned that the sellar should be paying the 2011 annual dues. I am all for saving money, but why would they want to pay dues for something they no longer own? Since there are still points for this year, I would think we are responsible for the 2010 dues also since the sellers are not using it. Again, complete newbie here and welcome any guidance and advice. Thanks.

If it is stripped then they used the pts and should pay the dues!

 

[mdsd8700]

Okay again newbie here that makes sense. The contract however is not stripped. It has all the points for this year and has the additional points coming next year. Thanks for keeping it all straight for me.

 

[DebbieB]

Thanks, you guys are awesome. Quick question though DenLo mentioned that the sellar should be paying the 2011 annual dues. I am all for saving money, but why would they want to pay dues for something they no longer own? Since there are still points for this year, I would think we are responsible for the 2010 dues also since the sellers are not using it. Again, complete newbie here and welcome any guidance and advice. Thanks.

That is all negotiable and should be outlined in the contract. If there are still 2010 points left, the seller could ask for reimbursement for all or some of the 2010 dues. They would have to list that in the paperwork.

If you have a contract where the 2011 points are already used, the buyer could request that the seller reimburse an estimate of the 2011 dues. It would be subtracted from the purchase price.

 

[CNPHILLY]

Okay again newbie here that makes sense. The contract however is not stripped. It has all the points for this year and has the additional points coming next year. Thanks for keeping it all straight for me.

DenLo was referring to a stripped contract, and not your specific contract. In any event, paying the dues is always negotiable. I am getting a "loaded" contract with 2009 and 2010 points and having the seller pay the dues on those points.

 

[Melani]

Do you think Disney takes into consideration whether a contract is stripped when making their rofr decision?

Or do they just use the Majic 8 ball?

 

[JimMIA]

A stripped contract is one that has no (or very few) current year points left or could even have borrowed points from the next year. We have purchased resale 2 times and were fortunate that all current UY points were available with no "borrowed" points used from the next UY.

I think Checkers has given you a better definition of stripped -- a contract that does not contain any of the current year's points (or very few of them). Points missing from subsequent UY's is a higher level of stripped, I guess.

To me, a contract with all of the current year's points intact is not "loaded." It's just a normal contract.

To me, a "loaded" contract is one that has all of this year's points intact, and in addition, has banked points included.

With all of this current year/subsequent year/banked points stuff, you need to keep the UY in mind. A contract could be "loaded," but if you are unable to take a vacation (or unable to get a reservation) with those points, they are really not that valuable to you.

 

[Orsino]

So would a contract with all 2010 points and all 2011 points be considered normal?

What if the use year was February?
What if the Use Year was December?

 

[MrChris]

Do you think Disney takes into consideration whether a contract is stripped when making their rofr decision?

I have heard that a stripped contract might be less attractive to Disney since they, presumably, wouldn't be able to turn the contract around until there were current points available in it. 'Course a low price might outweigh that.

 

[wdrl]

So would a contract with all 2010 points and all 2011 points be considered normal?

What if the use year was February?
What if the Use Year was December?

"Normal" is a relative term. Some contracts on the resale market have all of their 2010 and 2011 points still available for use; some might have 2009 available as well; and others might not have any points available until the 2012 UY. And then there are ones with points in "holding status" and "reservation status". The possible combinations are endless.

As JimMIA points out, a contract with lots of points is of little value if you can't use the points before they expire. That is why you need think when you might book a trip and actually use the points.

When I bought a February UY 100-point AKV contract in August 2009, I chose one that had 100 points available for both the 2009 and 2010 UYs. When I made my offer, I stipulated that the 2009 points had to be banked by the seller into the 2010 UY. This was because I knew I wouldn't use any of the 2009 points until September 2010. I made this a requirement of my offer because there was a chance that we would not close on the contract until after the banking deadline for the Feb UY. I paid $84/point, even though there was another contract being offered for $82. However, it had no points left from the 2009 UY, and about 90 points left in its 2010 UY. I considered the extra $2/point that I paid was worth it because I was getting about 110 more points that I could use for my trip in 2010.

The associates at the Timeshare Store can help answer a lot of your questions and help compare one contract to another.

 

[JimMIA]

"Normal" is a relative term... a contract with lots of points is of little value if you can't use the points before they expire...

Yeah, that's the key.

I can't tell you how many times I've seen someone buy direct from Disney -- paying a huge premium over resale -- solely because they got "free" current year points.

A few days later, we get a gushy post about being new members and being SO psyched!!!

And a few days later, another post about "Um...we can't use these points, what can we do with them???"

It's RELATIVE. If you can USE the points yourself for your own vacation, they are valuable.

If not...not.

 

[castleri]

So would a contract with all 2010 points and all 2011 points be considered normal?

What if the use year was February?
What if the Use Year was December?

The Feb one would be current and normal at this time.

The Dec one would be considered stripped in my opinion in that the Dec 2010 UY does not start until Dec 1, 2010 and if it does not have any current (2009) points available you would have to borrow points for any reservation prior to that date.

Others may disagree with this viewpoint.

 

[Jason@dvcstore]

Is there a way to spot a stripped contract Thanks.

Some buyers who just returned from vacation might be interested in a contract that doesn't have any points coming until 2/1/11 as they can typically get this for less than other contracts and they won't have to pay any annual dues until January 2011. Most people I am guessing would consider this a "stripped contract" but in some cases is perfect for certain buyers.

For those looking at The Timeshare Store, Inc.® listings I think we do a good job of showing what is currently in the account and what is coming the following year. You shouldn't be in the dark about what is coming in the account when looking at our listings.

Jason