VGF, thoughts on purchase price?

[beamreach]

Hello all,

I just put an offer on a VGF-1 500 pt. listing…
The contract had 1000 points for 2022, 500 points for 2023 and 500 points for 2024.
I offered $162. What are your thoughts on this price for this listing given the current market conditions?

At that price point, I would buy Direct...actually, we just did. Direct point are good for future resorts, Blue DVC card and extras, etc and going Direct now for less than predicted...my price was 190 PP after incentives and we got a large contract.

 

[KTownRaider]

$162 is a nice discount over direct- especially loaded. That said, I'm not sure I'd ever buy a single 500 point contract of anything. Once VGF2 sells out in <2 years and price goes back to $255 or more, the fair value of the contract might be around $175-200/pt (or about $87.5K-100K total). For me, that's just too narrow of a buyer market (those with $87.5-100K in disposable income) if you ever find yourself in the position of wanting/needing to sell down the road. And that's if the economy remains relatively stable (I'm reading that some economists are forecasting a possible recession). I never plan to sell, but I always want to prepared when life happens...

 

[DisDad22]

At that price point, I would buy Direct...actually, we just did. Direct point are good for future resorts, Blue DVC card and extras, etc and going Direct now for less than predicted...my price was 190 PP after incentives and we got a large contract.

Yeah I hear you, but we’ve always loved the Grand Floridian and enjoyed its proximity (and now walkabiity!) to MK, our favorite park. We never stay anywhere else so it’s a perfect match for us. The blue card perks simply weren’t worth it to us. And with the extra banked points that I’ll rent out and put into the purchase price, it became a very attractive price point.

 

[DisDad22]

Did they accept the offer?

 

[DisDad22]

I’m excited. My initial thoughts were to place an offer that would pass ROFR. I didn’t want to go too low because the contract is loaded. But it’s a large contract… I wonder if a lower offer would have really been fair market and passed ??

 

[wilkydelts]

Honestly I think you could have gotten 152-155, but if you are good combined with the difference is negligible over the life of the contract.

 

[DisDad22]

Honestly I think you could have gotten 152-155, but if you are good combined with the difference is negligible over the life of the contract.

I thought a little lower as well but my broker talked me out of it fearing the exercise of ROFR. I’m not so sure it would pass ROFR that low with all of the 2021 points included… but I haven’t been watching VGF resales for a long while so I really don’t know… I’m curious to know what this contract would have sold for back in the day.

 

[wilkydelts]

Assuming the traditional results of WDW not ROFRing contracts at resorts of active sales I think you would have been fine against ROFR

 

[Mexacajun]

I thought a little lower as well but my broker talked me out of it fearing the exercise of ROFR. I’m not so sure it would pass ROFR that low with all of the 2021 points included… but I haven’t been watching VGF resales for a long while so I really don’t know… I’m curious to know what this contract would have sold for back in the day.

Super unlikely to ROFR a property that is currently on sale.

 

[pianomanzano]

I thought a little lower as well but my broker talked me out of it fearing the exercise of ROFR. I’m not so sure it would pass ROFR that low with all of the 2021 points included… but I haven’t been watching VGF resales for a long while so I really don’t know… I’m curious to know what this contract would have sold for back in the day.

Broker should know enough about the market that Disney won't exercise ROFR while VGF is in active sales. Also it's in their favor to get a higher price for the contract. $162 vs a price of $150 on a 500 pt contract means an extra ~$500 in commission.

 

[Jimmy Geppetto]

I thought a little lower as well but my broker talked me out of it fearing the exercise of ROFR. I’m not so sure it would pass ROFR that low with all of the 2021 points included… but I haven’t been watching VGF resales for a long while so I really don’t know… I’m curious to know what this contract would have sold for back in the day.

You may want to consider a new Broker. It's unfortunate they provided you with that perspective while not also sharing that DVC rarely ROFRs resorts that are not sold out.

 

[RamblinWreck]

I thought a little lower as well but my broker talked me out of it fearing the exercise of ROFR. I’m not so sure it would pass ROFR that low with all of the 2021 points included… but I haven’t been watching VGF resales for a long while so I really don’t know… I’m curious to know what this contract would have sold for back in the day.

I don’t think Disney would have even considered ROFR’ing that contract. Not while they are actively selling VGF points.

And it may seem counterintuitive, but stripped contracts have tended to be taken more often than loaded ones. It may partially be because they tend to sell for less.

 

[DisDad22]

Super unlikely to ROFR a big roperty that is currently on sale.

Super unlikely to ROFR a big roperty that is currently on sale.

Broker should know enough about the market that Disney won't exercise ROFR while VGF is in active sales. Also it's in their favor to get a higher price for the contract. $162 vs a price of $150 on a 500 pt contract means an extra ~$500 in commission.

Thanks everyone. If you all are right, sounds like they’re just giving this away. Gosh though, I called other brokers who had nothing to do with this sale before I put the offer in… none echoed these sentiments. In fact, I had the feeling my offer was on the low side.

Taking into consideration the 500 points from 2021 to rent out, could someone help me out with a little math and tell me what I paid per point for this contract? Then after looking at $/point paid, did I really over pay? I just can’t see Disney allowing a cost savings of literally tens of thousands of dollars to buy this contract.

 

[RamblinWreck]

Thanks everyone. If you all are right, sounds like they’re just giving this away. Gosh though, I called other brokers who had nothing to do with this sale before I put the offer in… none echoed these sentiments. In fact, I had the feeling my offer was on the low side.

Taking into consideration the 500 points from 2021 to rent out, could someone help me out with a little math and tell me what I paid per point for this contract? Then after looking at $/point paid, did I really over pay? I just can’t see Disney allowing a cost savings of literally tens of thousands of dollars to buy this contract.

You didn’t overpay

You might have been able to get it down near $150

But something to keep in mind is that VGF contracts are scarce.

If you found the one that was right for you, of course you want a good deal but the fact that you even found it is a win on its own.

You paid a lot less than people had been paying over the last couple of years, too.

You definitely didn’t overpay. I’d say your deal is a solid one.

 

[DisDad22]

You didn’t overpay

You might have been able to get it down near $150

But something to keep in mind is that VGF contracts are scarce.

If you found the one that was right for you, of course you want a good deal but the fact that you even found it is a win on its own.

You paid a lot less than people had been paying over the last couple of years, too.

You definitely didn’t overpay. I’d say your deal is a solid

 

[DisDad22]

Yes, I think in effect it’s close to $150-ish/point (if my math is correct) after I sell the 500 banked points from 2021. I think it’s a pretty good deal looking at it this way. I really hope this passes. Regardless, this was the right number of points in the use year we were looking for at the only resort we stay. This was perfect for us.

 

[Sandisw]

You didn’t overpay

You might have been able to get it down near $150

But something to keep in mind is that VGF contracts are scarce.

If you found the one that was right for you, of course you want a good deal but the fact that you even found it is a win on its own.

You paid a lot less than people had been paying over the last couple of years, too.

You definitely didn’t overpay. I’d say your deal is a solid one.

This is what is important. If it meets your needs well it’s not worth it to struggle with the extra $10/point.

In the scheme of things that extra $5k potential savings would not have been much!!

 

[pianomanzano]

Thanks everyone. If you all are right, sounds like they’re just giving this away. Gosh though, I called other brokers who had nothing to do with this sale before I put the offer in… none echoed these sentiments. In fact, I had the feeling my offer was on the low side.

Taking into consideration the 500 points from 2021 to rent out, could someone help me out with a little math and tell me what I paid per point for this contract? Then after looking at $/point paid, did I really over pay? I just can’t see Disney allowing a cost savings of literally tens of thousands of dollars to buy this contract.

Don't sweat it, at the end of the day still a great deal versus going direct. If anything, this is a helpful experience in learning which brokers to avoid in the future. When I was on the hunt for VGF, I've had brokers tell me straight up lies. For example, one said that the new VGF direct price of $207/point was only if you you were buying 200+ points. Not sure if they were lying or just not knowledgeable about the market and tbh I don't know what's worse because it becomes a question of integrity and/or accuracy issue.

If you plan to rent out all 500 points that were banked, and can get $18/point for them, then you can knock your price down by that amount which would make your offer an even better deal (minus taxes on those profits). Then again using those banked points on a couple nights in a grand villa would be just as sweet!

Regarding Disney allowing cost savings of tens of thousands, they have roughly a half billion dollars worth of points they need to sell for VGF2, for which they're making tons of money off of since it's a refurb of existing infrastructure. They could care less about recouping the savings from a 500 pt contract.

 

[RoseGold]

I wouldn't buy a 500 point contract. It's just too hard to sell. I'd rather pay a few hundred bucks difference and get two smaller ones.

And LOL about ROFR. That broker is wow. DVC doesn't ROFR in active sales.

 

[Paul Stupin]

At that price point, I would buy Direct...actually, we just did. Direct point are good for future resorts, Blue DVC card and extras, etc and going Direct now for less than predicted...my price was 190 PP after incentives and we got a large contract.

Congratulations on being a new DVC owner!