To protect your direct purchase DVC value...

[MoreTravels]

Make sure you buy it in small 50 point increments. You will get to sell it at 20% higher later. So don't buy a 300 point-contract... buy 6 of 50 points! Annoy your guide... maybe even in 25-point portion, so 12 contracts instead of 1, for a total of 300 points for example.

 

[twinsouvenirs]

we went 50/30/30 on our gfv contract--it means an extra $100 in closing costs but will be worth it if /when we go to sell.

 

[BestDadEver]

Make sure you buy it in small 50 point increments. You will get to sell it at 20% higher later. So don't buy a 300 point-contract... buy 6 of 50 points! Annoy your guide... maybe even in 25-point portion, so 12 contracts instead of 1, for a total of 300 points for example.

Your guile 6 50 point contracts would annoy me . I think 100 splits would be fine . Selling 6 contract could be quite a hassle plus added commissions .

 

[Minniesgal]

Your guile 6 50 point contracts would annoy me . I think 100 splits would be fine . Selling 6 contract could be quite a hassle plus added commissions .

Is commission not a percentage of the sale amount?

 

[Missyrose]

Is commission not a percentage of the sale amount?

Yep, usually about 10 percent of each sale.

 

[ELMC]

Your guile 6 50 point contracts would annoy me . I think 100 splits would be fine . Selling 6 contract could be quite a hassle plus added commissions .

Do you mean added closing costs? Commissions are a percentage of the sale. So if you are paying "added commissions" that means you are making more money on the sale, which I think we can all agree is a good thing.

So you know, there is a huge distinction between 50 and 100 point contracts when it comes to resale. The difference in demand for the two is substantial.

 

[bobbiwoz]

I think there is an up front cost for splitting, direct. You pay something for each part.

I have many sized contracts, 25 to 200, but I also think 100 points is a good amount in a contract.

Bobbi

 

[JimMIA]

If the DVC timeshare salesperson is selling you points at $130-$165 per point, they will put up with a little extra paperwork and laugh all the way to the bank. Plus, depending on how overboard you go, there could be some significant extra closing costs.

I really don't see any sense in going through all this for 100 points or less. The reality is that 100 points or anything less will generally sell very quickly on the resale market if the points have an attractive home resort. Even 150 point contracts tend to sell quickly.

It's a little amusing to pay $150 per point and then worry about getting $5-$10 more per point getting out. That's especially true if you are buying direct at a resort where you could buy resale for half the price (or less). Paying double going in, but worrying about your eventual exit price point is a classic example of being "penny smart, pound foolish," IMHO.

If you pay a huge premium for buying direct, and also finance, but use the small contract exit strategy as a partial justification, I think someone is really just kidding themselves. That person is really paying $200-$250 per point (or more) including financing costs and worrying about pennies getting out.

To me, there are two legitimate reasons why breaking contracts up into smaller chunks can be advantageous -- quickness to sell, and the ability to tailor your holdings to the size you want as your family's needs change. If you have a sizable DVC holding, multiple smaller contracts allow you do downsize more easily and precisely.

If you only own 100 points, selling 25 of them is not going to have much effect on anything; if you have 80 points and you sell 50, what do you have left? 30 points -- what are you going to do with 30 points?

But if you have 400 and can easily sell 100 of them that's a real plus.

There also may be some small advantage in being able to pass smaller contracts on to children equally, but of course that assumes the kids are going to want the ongoing annual dues obligation. If they don't, you're just "giving" them a financial burden.

 

[JimMIA]

I also see one other advantage to small contract purchases -- the situation where the person only starts with what they can afford to pay cash for, and then adds on in small increments as they can afford them. THAT is a very sound strategy because it avoids all those finance charges and spreads the cash outlay out over time.

That person is still paying a big premium for buying direct, but at least they are going about it in a more sensible manner.

 

[disfanforlife]

We bought 200 AKV points direct in 2008. If I could do again I would have split into two 100 point contracts. But, I am not planning to sell anytime soon. Infact, we just added 100 points resale at BWV a few months ago. Can't wait to use them for the first time in March!

 

[DenLo]

I think there is only a few dollar difference per point between a 25, 50, 75 or 100 point contracts. If you are thinking you will have a higher profit later by purchasing 50 point contracts then, you are not looking at the additional expenses a seller has. There are fees.

This is from the TimeShare Store's website:

$20 Right of First Refusal Fee, less a $50 Estoppel Fee and a commission. Any outstanding liens, mortgages, maintenance fees or late fees that may have been assessed to your property will also be deducted.

You might end up with $50 higher on the 50 point contract versus a 100 point contract. Or less if to get a bargain, the buyer asks the seller to pay the closing costs. This request is often made if the contract is not fully loaded. Sure you don't have to sell the contract, but isn't the idea of a small contract is that it sells quickly? And if you do sell it at a profit, aren't income tax issues (capital gains) involved too?

 

[BWV Dreamin]

My thoughts exactly ( I was just going to post the same thing). I don't think it is worth buying small contracts. I won't buy anything less than 100 points.

I think there is only a few dollar difference per point between a 25, 50, 75 or 100 point contracts. If you are thinking you will have a higher profit later by purchasing 50 point contracts then, you are not looking at the additional expenses a seller has. There are fees.

This is from the TimeShare Store's website:


You might end up with $50 higher on the 50 point contract versus a 100 point contract. Or less if to get a bargain, the buyer asks the seller to pay the closing costs. This request is often made if the contract is not fully loaded. Sure you don't have to sell the contract, but isn't the idea of a small contract is that it sells quickly? And if you do sell it at a profit, aren't income tax issues (capital gains) involved too?

 

[ELMC]

If the DVC timeshare salesperson is selling you points at $130-$165 per point, they will put up with a little extra paperwork and laugh all the way to the bank. Plus, depending on how overboard you go, there could be some significant extra closing costs.

I really don't see any sense in going through all this for 100 points or less. The reality is that 100 points or anything less will generally sell very quickly on the resale market if the points have an attractive home resort. Even 150 point contracts tend to sell quickly.

It's a little amusing to pay $150 per point and then worry about getting $5-$10 more per point getting out. That's especially true if you are buying direct at a resort where you could buy resale for half the price (or less). Paying double going in, but worrying about your eventual exit price point is a classic example of being "penny smart, pound foolish," IMHO.

If you pay a huge premium for buying direct, and also finance, but use the small contract exit strategy as a partial justification, I think someone is really just kidding themselves. That person is really paying $200-$250 per point (or more) including financing costs and worrying about pennies getting out.

To me, there are two legitimate reasons why breaking contracts up into smaller chunks can be advantageous -- quickness to sell, and the ability to tailor your holdings to the size you want as your family's needs change. If you have a sizable DVC holding, multiple smaller contracts allow you do downsize more easily and precisely.

If you only own 100 points, selling 25 of them is not going to have much effect on anything; if you have 80 points and you sell 50, what do you have left? 30 points -- what are you going to do with 30 points?

But if you have 400 and can easily sell 100 of them that's a real plus.

There also may be some small advantage in being able to pass smaller contracts on to children equally, but of course that assumes the kids are going to want the ongoing annual dues obligation. If they don't, you're just "giving" them a financial burden.

Some very good points here. I think the value of this conversation is as it pertains to VGF. Otherwise you are correct, the buyer is paying a $50+ per point premium for the novelty of having smaller contract sizes. Personally, I don't think I'll ever be able to micromanage my holdings down to the 25 or 50 point level. I have several contracts, all in the 100-200 point range, and downsizing would consist of selling those off one at a time.

 

[KAT4DISNEY]

I've posted before that the added costs of selling virtually outweigh any additional couple of dollars in price you might gain from a sale. And especially with the closing costs now charged by Disney on the front end that are increased if you split.

So unless one had real concerns about downsizing in the future I don't think there's anything significant - if at all - to be gained with many very small contracts. 100 Pts is a pretty good number. And these days even the "normal" size contracts of 150, 160 don't stick around too long.

 

[Dean]

Make sure you buy it in small 50 point increments. You will get to sell it at 20% higher later. So don't buy a 300 point-contract... buy 6 of 50 points! Annoy your guide... maybe even in 25-point portion, so 12 contracts instead of 1, for a total of 300 points for example.

There are a number of assumptions here that may or may not work out in the future. They include that smaller contracts will net more per point in selling long term. IMO this is a big MAYBE. It also assumes buying retail to start with but NOT buying the fixed week option. Personally I wouldn't go with 6-50 even though on my single retail purchase I did go with 4*25 with the intent of selling soon, not much later. And to take the same approach resale adds significant costs to do so.

 

[BestDadEver]

Is commission not a percentage of the sale amount?

I ment the closing costs but I guess you can get the buyer to pay that to . Plus you would need 6 buyer instead of 3 but I guess those small contracts get taken quick , so i guess there is no downside to doing this . The $100 sure isn't a big deal .

 

[JimC]

Buying and selling contracts involves many variables, personal priorities and market factors. And they all change. We need to be mindful that the best advice last year may not be the best advice this year, nor the best advice in six months.

 

[DebbieB]

That's one regret I have - I bought 250 BWV points in one contract. I wish I would have split it 150/100. When VGC opened, I would then have sold the 100 and bought 100 VGC.

 

[Dean]

I ment the closing costs but I guess you can get the buyer to pay that to . Plus you would need 6 buyer instead of 3 but I guess those small contracts get taken quick , so i guess there is no downside to doing this . The $100 sure isn't a big deal .

I think most closing companies would do this for one closing if selling multiple to a single person. However, if you had them on one deed and sold part, you'd have to do a new deed for yourself in addition to the new one for what sold.

 

[bakerworld]

don't forget the incentives when buying direct - now they're not so great but you don't get much at 50 pts and back in '08 the incentives were significant