The MF thing on resales confuses me

[Tamar]

What would be the most common scenario for what the buyer assumes in MF if they buy the following resale? (yes, I know everything's negotiable, I just want to know if there is a starting point that is the "typical" expectation:

December UY, 150 points

no 2006 points
75 2007 points
150 2008 and beyond points

DH and I totally disagree on what's normal for a contract like this, so there is a footrub riding on you guys giving the right answer (the suspense is already killing me!).

Thanks!

 

[mikeandkarla]

You, the buyer, would be responsible for 75 points for the 2007 UY and 150 points thereafter. Multiply your associated resort per point assesment to get your total dues.

 

[RobDoc]

With a December Use Year, you are looking at a contract with no current points and only 1/2 of the points that will come on December 1, 2007.

You should consider NOT offering to pay any maintenance fees at all for the current Use Year (2006). If you purchase this contract prior to Jan 1, 2008 you will be responsible to pay all of the 2008 maintenance fees to DVC - even though you will only get 75 points in December. If you agree to pay 1/2 of those fees, be aware that they are likely to go up for next year anyway - and you will be all of that increase if you have already accepted the contract. There are NO points in the current Use Year. You will not get a full compliment of points until December, 2008.

Having said that, you should also do the math and not allow a few hundred $$$ come between you and this contract if it otherwise meets your needs.
Good luck with your decision.

 

[Tamar]

More clarification needed....do we pay 1/2 of 2007 calendar MF (starting now), or 1/2 the MF for the time we have 2007 points available to us for our December UY....which would start in June 2008?

 

[ZekeKelso]

I just made an offer on a resale and had a good conversation about this with the Timeshare Store folks. Although anything is possible, Doc is exactly right. At time of closing, typically you will pay (# points you get for the 2007 use year) x (annual maintenance cost/point).

So for "my" contract </knock wood>, I'm getting full 2006 use year point, full 2007 use year point, and full 2008 points. The seller had to pay the 2006 maintenance. At closing (hopefully in 45 days) I will pay the full 2007 maintenance charge. The seller has been paying monthly 2007 maintenance and will get back his 2007 payments. On Jan 2008, I will be responsible for paying the full maintenance for 2008 (or set up with Disney to pay monthly).

Hope this is clear,
Zeke

 

[ZekeKelso]

More clarification needed....do we pay 1/2 of 2007 calendar MF (starting now), or 1/2 the MF for our December UY....which would start in June 2008?

If you sign anytime in 2007, you pay 1/2 the 2007 maintenance at closing, and the owe the full 2008 maintenance in Jan 2008. Maintenance fees are due on a calender year and are independent of use year. Everybody, regardless of use year, owes their maintenance at the same time.

Note - all of this describes what is typical when buying resale. Direct purchases from Disney are different.

PS - Not that you asked, but I found that contracts with full current points, and even banked points, sell for only a few $$/point more than contracts with stripped points.

 

[jarestel]

The fair thing is for you to pay the dues on the points that are available for your use and for the seller to pay the dues for those he has already used. If the seller insists that you pay dues for the points he used then, as Doc said, you'll need to evaluate how badly you want this particular contract and decide if it's worth it to you or not.

 

[Amy5000]

Having read on this board quite a bit, I'll say there are 2 ways to allot MFs to points.

1. Common but possibly less correct way. Many people roughly equate points that come with a specific use year with the calender year MFs. So they would say that you are getting 1/2 of your Dec 2007 allotment and will suggest you pay 1/2 of the 2007 MFs (which covers the period of Jan to Dec 2007).

2. Possibly more correct Caskbill has written many posts pointing out that the correct way to allot MFs is to assign the MFs to on a pro rata basis to the different Use Years which they cover. In your case, the 2007 MF would cover 11 months of your 2006 Use Year and and 1 month of your 2007 Use Year. Since no 2006 points, you would not pay for 11 months worth of 2007 MFs. In theory you would pay for 1/2 the MFs for your 2007 Use Year, so that would be 1/2 month of 2007MF (Basically 1/2 of Dec's MF) plus 1/2 of MF for the first 11 months of 2008.

Confusing...yep. Also, as most DVCers are not as sophisticated as Caskbill, they will not be understanding when your proposal is that they pay 1/2 of 11months of 2008MFs. I also think many realtors who specialized in DVC don't really want to do the difficult calculation involved in this method and instead just allot the MFs paid with respect to a calender year to the Points that become available during that calender year.

Not really sure if this answered your question...but good luck.

(P.S. What were the methods of calculation on which you and your DH bet?)

Amy

 

[vwlvette]

Go with what you are comfortable with, If it was me, I would not pay the 2007 fees, or at least make your offer as the price of contract points plus no MF fees until 2008, I would try to justify this by saying that half the contract for 2007 is gone, Now keep in mind I am not taking into consideration the UY Month.

Good luck.

 

[Tamar]

Amy, those are the two ways that we are seeing as most likely.

A third way is paying MF from the month you purchase a contract on (when you have points available to borrow), and a fourth would be paying from Dec 1 on (when you actually have current points available)

 

[Dean]

Given this contract, even if one pays no fees for 2007, you will be paying fees on points you do not get the use of. Fees are charged on a calendar year basis non on a use year basis. In this situation the seller would have to pay part of the 2008 fees to make it a neutral circumstance. Of course one is look at the overall process to see what value your truly getting. Between the maintenance fees and the closing cost, it's not difficult to pay up to a dollars per point more than you think you're paying.

 

[castleri]

Having read on this board quite a bit, I'll say there are 2 ways to allot MFs to points.

1. Common but possibly less correct way. Many people roughly equate points that come with a specific use year with the calender year MFs. So they would say that you are getting 1/2 of your Dec 2007 allotment and will suggest you pay 1/2 of the 2007 MFs (which covers the period of Jan to Dec 2007).

2. Possibly more correct Caskbill has written many posts pointing out that the correct way to allot MFs is to assign the MFs to on a pro rata basis to the different Use Years which they cover. In your case, the 2007 MF would cover 11 months of your 2006 Use Year and and 1 month of your 2007 Use Year. Since no 2006 points, you would not pay for 11 months worth of 2007 MFs. In theory you would pay for 1/2 the MFs for your 2007 Use Year, so that would be 1/2 month of 2007MF (Basically 1/2 of Dec's MF) plus 1/2 of MF for the first 11 months of 2008.

Confusing...yep. Also, as most DVCers are not as sophisticated as Caskbill, they will not be understanding when your proposal is that they pay 1/2 of 11months of 2008MFs. I also think many realtors who specialized in DVC don't really want to do the difficult calculation involved in this method and instead just allot the MFs paid with respect to a calender year to the Points that become available during that calender year.

Not really sure if this answered your question...but good luck.

(P.S. What were the methods of calculation on which you and your DH bet?)

Amy

Definitely agree with # 2 above.

 

[Donald is #1]

Having read on this board quite a bit, I'll say there are 2 ways to allot MFs to points.

1. Common but possibly less correct way. Many people roughly equate points that come with a specific use year with the calender year MFs. So they would say that you are getting 1/2 of your Dec 2007 allotment and will suggest you pay 1/2 of the 2007 MFs (which covers the period of Jan to Dec 2007).

2. Possibly more correct Caskbill has written many posts pointing out that the correct way to allot MFs is to assign the MFs to on a pro rata basis to the different Use Years which they cover. In your case, the 2007 MF would cover 11 months of your 2006 Use Year and and 1 month of your 2007 Use Year. Since no 2006 points, you would not pay for 11 months worth of 2007 MFs. In theory you would pay for 1/2 the MFs for your 2007 Use Year, so that would be 1/2 month of 2007MF (Basically 1/2 of Dec's MF) plus 1/2 of MF for the first 11 months of 2008.

Confusing...yep. Also, as most DVCers are not as sophisticated as Caskbill, they will not be understanding when your proposal is that they pay 1/2 of 11months of 2008MFs. I also think many realtors who specialized in DVC don't really want to do the difficult calculation involved in this method and instead just allot the MFs paid with respect to a calender year to the Points that become available during that calender year.

Not really sure if this answered your question...but good luck.

(P.S. What were the methods of calculation on which you and your DH bet?)

Amy

I agree with option 2. You will not get any use in the 2007 calendar year out of this contract except for potentially in December when you only get 1/2 of the points.

 

[RobDoc]

If you were to purchase the same contract directly from Disney - you would have all 150 current points, you would pay prorated maintenance fees from today (less than 50%) for the current year and will get all 150 points again on December 1, 2007. You will pay all fees again (for 2008) in January (or use the monthly debit program to pay them).

IMO, if you pay ANY of the 2007 dues, it should be prorated based on when you will get the points, and then only on the points you will receive - in this case it would be 1/24 of the normal dues since you are getting 1 month's use of 1/2 of the points during the 2007 calendar year.

As I said earlier though and others have agreed with, I would consider the whole package and what you ability to use the points in the near future before dismissing an otherwise good deal for your family for a few hundred dollars.

Good luck with your decision (and good luck with that footrub!)

 

[Tamar]

So, going by the posts above, if someone buys an April contract for 150 points, all 2007 points gone, all 2008 points intact, they shouldnegotiate to pay dues starting in April 2008 when points become available?

 

[Amy5000]

So, going by the posts above, if someone buys an April contract for 150 points, all 2007 points gone, all 2008 points intact, they shouldnegotiate to pay dues starting in April 2008 when points become available?

Yup. You also have to consider if the resale contract is a bargain if it's stripped of points. Current points are the most valuable. It would easily cost $10 ppt to replace those stripped pts and you could probably rent them out for that much.

As WebmasterDoc pointed out, if you bought this contract from Disney you would be getting an additional 225 pts. (150 2006 pts and the full pts for 2007 so that's 75 more pts than you are getting). The market value of those points is about 2250...b/c it would probably cost you $10 ppt to replace them. Then you really have to consider whether it's a deal to buy resale vs from Disney.

I bought resale b/c I was looking for a smaller contract (100 pts). It came fully loaded and I saved maybe $1000 by buying resale. That said, I would have taken a contract that wasn't loaded b/c I was looking for something that Disney wouldn't sell me...a smaller contract. I don't know your resort or price...but you are pretty close to Disney's minimum purchase of 160 pts.

Good luck in your decision.

 

[Tamar]

This has been helpful. Even though right now we are selling one of our three contracts (so I wish the discussion above had gone a different way), after we sell, we will re-invest; we want more BWV points.

So, it sounds like buying direct from Disney 1-3 months before your UY comes up might get you a bunch of extra points (assuming they'll let you bank them)??

 

[ZekeKelso]

Yup.

Amy (and others with similar opinions)...

Are you saying that's how you think it would be fair to structure a resale, or are you saying, based on your knowledge, that is how resale contracts are typically structured?

I just had detailed conversations with my "guide" at one of the big resellers, and he explained that maintenance points are paid on a calendar year for whatever points are received in that calendar year, so that is how resales are typically structured. Whatever current year use points you get, you pay that year's maintenance fess on. Your 2008 maintenance fees cover the cost of points you receive in 2008, not that portion of your "2007 use year" that occurs in 2008, and the portion of your "2008 use year" that falls in 2008.

Did my guy mislead me?

 

[Amy5000]

Amy (and others with similar opinions)...

Are you saying that's how you think it would be fair to structure a resale, or are you saying, based on your knowledge, that is how resale contracts are typically structured?

I just had detailed conversations with my "guide" at one of the big resellers, and he explained that maintenance points are paid on a calendar year for whatever points are received in that calendar year, so that is how resales are typically structured. Whatever current year use points you get, you pay that year's maintenance fess on. Your 2008 maintenance fees cover the cost of points you receive in 2008, not that portion of your "2007 use year" that occurs in 2008, and the portion of your "2008 use year" that falls in 2008.

Did my guy mislead me?

hmmm...I'd say not really...or maybe...

If you go back and read post #8, I suggested that this method is the preferred method among DVCers on DISBoards. (Not a typical group of DVCers). My post at #8 suggests that even though DISBoarders calculate what's fair this way, I think most realtors just assign the MFs to the points recieved in that calender year:

I also think many realtors who specialized in DVC don't really want to do the difficult calculation involved in this method and instead just allot the MFs paid with respect to a calender year to the Points that become available during that calender year.

Having re-read what I wrote, I'm not sure if its because the realtors don't want to get involved in the calculation, don't want to explain it to their clients or are not familiar with it. Let's face for contracts with borrowed points, do we even know what MF will be next year? Also, I suspect many DVCers are not as savvy as DISBoarders and don't want the 20 minutes lecture explaining this method allocation.

When I first read about the method of assigning MF to Use Years on a pro rata basis, I thought it was somewhat arbitrary. Afterall, I figured that if a purchasers got 50 yrs allotment of pts and had to pay 50 years of MF to those points, what was the big deal with just doing it the way the realtors do it. I guess the intial purchaser would get a boon by only pay for a partial year for the first allotment...but it seemed a more simple way and all future purchasers could just use the simple method. Disney even aids the boon by not making MF payable until you purchase and often letting you bank late in your use year. So if you purchase close to the end of your Use Year you pay relatively little in MF. What do we do about this boon to the initial purchaser....not much!! Anyway, the DISBoards peer pressure has worked on me and I've starting to view the correct way to calculate to be the more difficult way.

And what does that mean in purchase...not much. I would let it guide me in my offer b/c everything is negotiable. But I wouldn't let myself get bent out of shape over relatively small potatoes if I found the contract I wanted. Only you can decide what's small potatoes to you.

I do agree that most realtors don't suggest that the proper way to calculate MFs to be the way we do it on the DISBoards.

Sorry for the long winded response.

Amy

 

[Amy5000]

Are you saying that's how you think it would be fair to structure a resale, or are you saying, based on your knowledge, that is how resale contracts are typically structured?

Despite my long winded response I didn't answer this question directly. I do think it's fair to structure transactions this way but I doubt (based on highly limited knowledge) that most are structured that way.

One reseller told me I wouldn't pay 07 MF since there were no 07 pts on the contract I was bidding on. (Pts were coming in Feb of 08 but I would have paid all 08 MF rather than just 11 months). That contract was ROFR'd.

The other reseller let me make the proposal over MF (asked what I wanted and didn't suggest any method). I got full Oct 06 pts and full Oct 07 points and I offered to pay MF for 07. Technically I should have paid for 3 months of 06 MF under my method or all of 06 MF under the other method. (But even the broker who told me just to assign point to the use year they became available did not suggest paying MF for banked points.)

I guess I don't know how most deals are structured, but I wouldn't be surprised if most used the more unofficial method suggested by your resale "guide."

To put it in perspective in using the SSR 2007 MFs of 4.12 ppt for both 2008 or 2006, I would have over paid roughly $35 on the first contract I bid on and underpaid by roughly $103 on the second contract I bid on. At least on a smaller contract I don't think it made a significant difference.

Good luck. Amy