Stripped resale contracts --why would anyone buy that or sell?

[mom in 2005]

Hi gang,

I'm still considering buying DVC. I see the benefits in buying resale and from Disney direct. But in looking at resales, TSS has a bunch of stripped contracts with points not available until 09, very few in 09 and the full amount available in 2010. Maybe I really don't understand how contracts work, but why would I want to buy now but can't use until next year? Why would they sell their contract now if they've already used this yrs points, wait until next year to sell when there are points available?

Has anyone bought a stripped contract and what made you choose that one instead of one that gave you all the points (or at least most of them) from the current year?

Thanks much!
Naomi

 

[disneynutz]

Hi gang,

I'm still considering buying DVC. I see the benefits in buying resale and from Disney direct. But in looking at resales, TSS has a bunch of stripped contracts with points not available until 09, very few in 09 and the full amount available in 2010. Maybe I really don't understand how contracts work, but why would I want to buy now but can't use until next year? Why would they sell their contract now if they've already used this yrs points, wait until next year to sell when there are points available?

Has anyone bought a stripped contract and what made you choose that one instead of one that gave you all the points (or at least most of them) from the current year?

Thanks much!
Naomi

It depends on the market. Stripped contracts usually sell at a discount other than BCV. Some sellers have already use current points and figure that there is no harm in listing the contract now.

 

[FLYNZ4]

We have an SSR stripped contract for sale... but we did not expect it to sell.

Our plan was to list only two contracts... both with full 2008 points... and one had a few banked points as well. Those both sold very quickly (within days). TSS suggested that we list the third contract because sometimes people who are not vactioning until next year do not mind paying less. My particular contract does not have any 2008 points, but full 2009. It also cannot close until next year because we have pending trips booked with the points in that contract (It actually has 300 total points: 150 each of '07 and '08 booked into reservations).

I could have booked replacement reservations with my BWV accounts, and then cancelled the pending SSR reservations and sold the 3rd contract right now... fully loaded. However, I felt it was to my advantage to wait.

So... at this point... I plan to pull my stripped contract because once I get my points next year... I will be able to sell it at a higher price (economy permitting) than I can when stripped.

/Jim

 

[dressthechild]

I'm waiting to hear on a BWV stripped contract. It was cheaper than the unstripped and we just returned from a WDW trip in April. I'm ok waiting a year for my points.

 

[nickspace]

I bought a full contract 160 pts... 26 Banked, 160 in 08, 160 in 09, Feb use year at SSR for $78 a point with no closing costs. I had been waiting for a long time... too long... and I jumped when I saw the deal.

Nick

 

[WALTSAGOD]

Maybe you aleady have a vacation or two planned for this year and don't need the points until later?

Make sense to save the $$

 

[bookwormde]

The biggest problem with stripped contracts is by the time you deduct $10/pt from a standard contract you often fall below the ROFR levels for the resort since DVC does not seem to place the same value on points as the general public.

bookwormde

 

[ACDSNY]

I plan on selling a couple of small 60 point stripped contracts in order to change over to a new UY. I currently have a FEB UY which isn't working well with the new banking deadlines. In these cases the seller covers the dues for the points they've used so it not such a bad deal for the buyer.

 

[javamom]

We bought a stripped contract as well. It worked out for 2 reasons:

A) it allowed us to buy a few more points than we originally thought
B) it worked out correctly for our anticipated travel dates/pattern too.

Why not save the money, if it works out for you? Personally, one years' worth of points to either side pos or neg isn't a deal-breaker for me in the face of the long-term picture anyway.

 

[Deb & Bill]

We sold three contracts because we just wanted to sell them. One was fat with points (probably should have used them first). The other didn't have many points (maybe 8) until Sept 2008. The third had no points until Dec 08. But both of those had full points coming in Sept and Dec.

We got our asking price for all three.

All three were smaller contracts - less than Disney requires to buy in. Two OKW and one BCV. Either the buyers were looking for smaller contracts or these fit their needs as existing members.

 

[JimC]

We bought one at OKW in 2002. What attracted us was the price. Even after adjusting for the stripped points it was an attractive deal. We got lucky and DVC let it go. That might not happen today, particularly at OKW.

 

[jamstew]

I bought 100 BCV points in April (from TSS) that had all 2007 points & forward. Now I just need to add more

 

[backyardponder]

We bought 2 stripped contracts because we already had non-Disney plans for 2009 and wanted to plan for a large family reunion using points in 2010. I'll be able to bank the points I get in 2009 and borrow from 2011 to meet my needs.

 

[ldo]

I have a small contract. When I sell (which could be never), I would strip it and sell at a slight discount. Since it is a smaller contract, I would expect it to be gone within a week or two.
Why would someone want it? Desirable location to get 11 mth booking, smaller contract to get into DVC system, whereby they could then add on points.

 

[crisi]

We also bought stripped in 2002 - we weren't planning to vacation until late 2003 - long after the points arrived - so it allowed us to get a cheaper contract.

We PROBABLY could have done better had we found a loaded contract and rented the points we weren't going to use - i.e. our discount wasn't $10 a used point - but that would have been more hassle.

We also didn't pay any dues on already used points - the seller paid all those dues.

 

[PIERCEDRN]

Hi gang,

I'm still considering buying DVC. I see the benefits in buying resale and from Disney direct. But in looking at resales, TSS has a bunch of stripped contracts with points not available until 09, very few in 09 and the full amount available in 2010. Maybe I really don't understand how contracts work, but why would I want to buy now but can't use until next year? Why would they sell their contract now if they've already used this yrs points, wait until next year to sell when there are points available?

Has anyone bought a stripped contract and what made you choose that one instead of one that gave you all the points (or at least most of them) from the current year?

Thanks much!
Naomi

Great question! This really had me scratching my head prior to buying resale!

For the sake of discussion, lets call a stripped contract one with no points till 2009, a standard one with 2008 points and a loaded one with 2007 and 2008 points.
Why sell a stripped? Because you may get only $2-3 less than with a standard one. But after having a contract a little while you realize that you can strip a contract and rent those points for $11 a point. Using SSR as an example, stripped goes for about $80, standard for about $82 and loaded for $84 . But rent those points out PRIOR to selling and you make $9 more a point
on the stripped. By the same logic, you also lose $9 off value of 2007 points on the loaded. Oversimplified but you get the point.

Why buy a stripped? 1.To "get in" at a slightly lower price, 2. max points on a fixed buy-in amount 3. Because you are not aware of the value of the "missing" points, 4. Not willing to deal with the hassle of selling the extra points

When we ended up buying our 150 SSR point resale, we ended up buying a "loaded" contract to get the best value, stripped were never considered. However, we did not have self control enough to rent our "extra" points to get the best deal, instead splurging on a 13 day, 3 resort Mega-trip!
BOB

 

[crisi]

It can also be very hard to find loaded contracts. If you are looking for a certain number of points, a certain use year, a certain resort, and a loaded contract - and you don't have the patience to wait for the perfect contract to come through, you may make some compromises. You may decide to go for a contract with a few more point than idea. Or buy Boardwalk instead of Beachclub. That Feb use year isn't that different than the April one you wanted - and all the points gone from this year, but borrowable points available....those may be compromises you'll make.

Buying a resale is a little like buying a used car - maybe it isn't the "right" color, maybe its a little more than you wanted to spend, maybe its got a few more miles on it than you wanted, maybe it isn't the perfect year or the perfect model - but unless you are willing to wait for the perfect car to show up, you'll compromise.

 

[VrBchJ]

I bought a stripped BWV contract because it had the number of points I wanted with the UY I wanted. I wasn't planning a trip for a year and the home resort and UY were more important to me than current points.

 

[Brian Noble]

From a sellers perspective, stripping is very attractive. The resale market seems to value those points a good bit under $10pp. It is especially favorable if the buyer assumes dues for the stripped years (and few listings specify that the seller will pay them, so I assume that some buyers are willing.)

 

[FLYNZ4]

Using SSR as an example, stripped goes for about $80, standard for about $82 and loaded for $84 . But rent those points out PRIOR to selling and you make $9 more a point
on the stripped.

Bob,

You are correct... but MOST of the time... the buyer of the stripped contract does not pay the current year MFs... so in that case, the $9 extra profit is reduced to $4-$5.

/Jim