Why the massive point price disparity?

[belias21]

I've been keeping my eyes out for an AKV contract for sale, but I just can't understand why the asking prices are so variable. I've seen 160pt contracts asking anywhere from $69 to $112/pt. I guess I can understand that the quantity of points might cause some variance in the per pt pricing, but these are all the same quantity.
I know that the standard real estate market has some craziness, but this is the equivalent of two identical houses sitting right next door where one is asking $200K and the other $300K.
Are the folks with a high asking price really just not terribly interested in selling quickly? Are they maybe trying to make up for an outstanding loan?
I'm just trying to make sure I'm not missing some "inside" information here.

 

[zeferjen]

Some people took out loans to buy their DVC contract and need to sell it for a certain amt per point in order to pay it back.

 

[BrerNashville]

When I had an offer rejected by a seller asking waaay too much for his points, I was told the seller needed to pay off some financing debt. Given the economy, there's bound to be a lot of that out there.

 

[gray52]

There are some who didn't realize until much later that others paid a lot less for AKV than they did... Combine that with loans, interest charges and realtor commissions, and some feel like they can justify the higher asking price. Unfortunately for them, buyers of the resale market are typically much more informed than someone on property for the first time and doing "the tour".

 

[cz4ever]

Are the folks with a high asking price really just not terribly interested in selling quickly? Are they maybe trying to make up for an outstanding loan? I'm just trying to make sure I'm not missing some "inside" information here.

As PP's have said, one reason is that some sellers are paying off loans and "need" to make that amount. Since Buyer's couldn't care less why a Seller is selling, that strategy has "Fail!" written all over it.

In general, the DVC market (and timeshare market in general) is full of low-information buyers and sellers. Just like there are a lot of buyers who are unaware of the resale market entirely, so they blissfully buy from Disney w/o carefully considering the alternative, there are a lot of sellers who do not understand the resale market either. Sometimes that leads to them setting a price that no buyer will ever consider, e.g., $100+/point AKV or SSR contracts, and sometimes that leads to the awesome deals (for buyers) sometimes reported here in the ROFR thread.

I haven't sold a DVC contract before, but I get the impression that the selling agents do not provide a lot of guidance regarding proper pricing. Since they are not acting as a seller's broker (in the legal sense of the term "broker"), they may be on thin ice if they provide too much pricing guidance. Thus, you get Sellers picking prices without a good understanding of the current market price. Presumably they would benefit from the "How high can you go?" thread on that other popular DVC owner site. Do the major sellers list their recent sales (contract size, UY, resort, and price) anywhere or share that information with new sellers (or buyers)? Probably not...

 

[Raisincain]

These are all great responses.

Some people ask for the moon initially and get a lot more negotiable when there's cash on the table.

I really believe that most sales are unique; some people trying to cover debt, some selling a bequeathed membership looking for maximum cash, etc. To me the most common scenario would probably be the person who paid too much for the property initially (as mentioned above) and now thinks for some reason they can ask a price close to their original investment. It's crazy, since the market won't bear it, but it is definitely a mindset that is out there.

FWIW, my $.02 is to be very patient, take your time and get a broker that will TRULY present all offers, and explain to them up front that you may be making dozens of offers before one is accepted. If they don't seem to warm to this idea, get a new broker. Additionally, I have bought contracts that have banked points on them with the intention of selling the points (which I couldn't use due to time constraints) to bring down the price of the initial investment. Good luck!

 

[joeyrose]

i think high prices are driven primarily by naivete and low primarily by desperation.

 

[crisi]

i think high prices are driven primarily by naivete and low primarily by desperation.

I suspect the low ones are some "I don't care, I just want to not have to deal with this."

We have 150 Boardwalk points - paid for in cash a decade ago. If I were to sell right now, I really don't care if I get $65 a point or $60 a point, that's a whole $750 before the commission - not really enough to sweat. Our value has been gotten out in the past decade of use. If I listed at $60, I'd have it out of my hands and done quickly.

 

[joeyrose]

I suspect the low ones are some "I don't care, I just want to not have to deal with this."

We have 150 Boardwalk points - paid for in cash a decade ago. If I were to sell right now, I really don't care if I get $65 a point or $60 a point, that's a whole $750 before the commission - not really enough to sweat. Our value has been gotten out in the past decade of use. If I listed at $60, I'd have it out of my hands and done quickly.

yes, i agree. if i were in this situation, i would price middle of the road and probably take any decent offer that came in. i expect i'll do that on all my contracts in 10 years or so (i'll be in my early 70's then).

 

[belias21]

I suspect the low ones are some "I don't care, I just want to not have to deal with this."

We have 150 Boardwalk points - paid for in cash a decade ago. If I were to sell right now, I really don't care if I get $65 a point or $60 a point, that's a whole $750 before the commission - not really enough to sweat. Our value has been gotten out in the past decade of use. If I listed at $60, I'd have it out of my hands and done quickly.

That said... I'll take 'em for $60! ;-)

 

[belias21]

Thanks all for the feedback. Just like any other real estate there's not much consistency.
Fairly certain we're buying at this point but probably won't travel until later in 2013 so I've got some time to shop around for the right offer.

 

[DougEMG]

I've been keeping my eyes out for an AKV contract for sale, but I just can't understand why the asking prices are so variable. I've seen 160pt contracts asking anywhere from $69 to $112/pt. I guess I can understand that the quantity of points might cause some variance in the per pt pricing, but these are all the same quantity.
I know that the standard real estate market has some craziness, but this is the equivalent of two identical houses sitting right next door where one is asking $200K and the other $300K.
Are the folks with a high asking price really just not terribly interested in selling quickly? Are they maybe trying to make up for an outstanding loan?
I'm just trying to make sure I'm not missing some "inside" information here.

People having loans and people with unrealistic expectations are the main reasons.

 

[Kidanifan08]

I've been keeping my eyes out for an AKV contract for sale, but I just can't understand why the asking prices are so variable. I've seen 160pt contracts asking anywhere from $69 to $112/pt. I guess I can understand that the quantity of points might cause some variance in the per pt pricing, but these are all the same quantity.
I know that the standard real estate market has some craziness, but this is the equivalent of two identical houses sitting right next door where one is asking $200K and the other $300K.
Are the folks with a high asking price really just not terribly interested in selling quickly? Are they maybe trying to make up for an outstanding loan?
I'm just trying to make sure I'm not missing some "inside" information here.

I can't believe ther is a contract listed for $112! At this point in time, I don't think anyone will be able to get much more than $80-85/point for AKV, even for a small (<100) contract with all banked points. There is a glut of 160 point AKV contracts on the market right now. I just bought a 105 point AKV resale for $67/pt that came with 74 2011 points. If 160 is what you want, the board sponsor has one with 20 banked points for $65 right now. You could probably bid $60 and get $63. You certainly should not pay more than $67, unless it has all 2011 points banked and all points going forward. Even with that, you shouldn't pay much more than $70-72. Have fun hunting!

 

[ColonialMouse]

I've been keeping my eyes out for an AKV contract for sale, but I just can't understand why the asking prices are so variable. I've seen 160pt contracts asking anywhere from $69 to $112/pt. I guess I can understand that the quantity of points might cause some variance in the per pt pricing, but these are all the same quantity.
I know that the standard real estate market has some craziness, but this is the equivalent of two identical houses sitting right next door where one is asking $200K and the other $300K.
Are the folks with a high asking price really just not terribly interested in selling quickly? Are they maybe trying to make up for an outstanding loan?
I'm just trying to make sure I'm not missing some "inside" information here.

Just take a look at the ROFR thread to see what prices people are actually closing at. My impression is that the highest listed prices are from people still too naive to understand the market, but a lot in between will accept an offer. So find a contract that matches what you want and make an offer. Up to you whether you decide to offer a really low price and negotiate up or you take more of an approach of "here is what I'm willing to pay, let's see if any of these 8 sellers will accept it."

And always remember that maintenance fees and stripped vs loaded contracts are major factors in the price. Don't just focus on price/pt.

Bruce

 

[heathrow42]

One thing I haven't seen mentioned is UY.. How UY factors in to what a buyer is looking for. Some buyers may be willing to pay a bit more to get a certain UY or matching UY for pts they already have.

I tried being patient for almost a year to get the same UY as the contract we already have so that our pts would all be under the same member id. I was willing to pay a little bit more than what pts were going for in order to have the same UY. Well, I got tired of waiting and having all my offers rejected, as everything for my UY/resort was $15 or more per point than the average rate at that resort. In the end we figured that UY probably wouldn't make much of a difference given how we use the pts - that the money saved would be worth it in the end. Well a week later we saw a contract come up at $10 LESS than what we had been offering - so we jumped on it. Different UY, but we are going to save a lot of money.

I must have an odd UY -- but my preference would have been to have a matching UY - even if it cost a bit more (not outrageously more..)

--Heather

 

[BestDadEver]

I suspect the low ones are some "I don't care, I just want to not have to deal with this."

We have 150 Boardwalk points - paid for in cash a decade ago. If I were to sell right now, I really don't care if I get $65 a point or $60 a point, that's a whole $750 before the commission - not really enough to sweat. Our value has been gotten out in the past decade of use. If I listed at $60, I'd have it out of my hands and done quickly.

This is the way I would look at it . Say in 20 years when my kids no longer want to go to disney I want to unload it just do it quick and cheap . They likely got their moneys worth . And any money back would be gravy.

 

[DizBub]

If I listed at $60, I'd have it out of my hands and done quickly.

Trouble is that if you did list it for $60 most experienced buyers will offer $40 and expect you to accept.

 

[crisi]

Trouble is that if you did list it for $60 most experienced buyers will offer $40 and expect you to accept.

And you'd turn those offers down. You still wouldn't wait long for one at $60.