Contracts selling with no points till 2018

I'm trying to buy resale now. Our contract has all 2016 points banked to 2017 and all 2017 points and forward. It actually has 2015 points banked into 2016. The use year is August, so the 2105 banked points expire in two weeks. Those are worthless. We passed ROFR on 6/19 and today 7/14 received the contract to sign for closing. It took almost a month just to get the contract to sign. As time goes by we are losing more and more time in our booking window with all those points. When we finally get them we will be limited on what we can do with the banked points because it's past our 11 month window and into our 7 month window on when we can take off of work for a trip. So when you buy a contract fully loaded, make sure you can really use all those points. If not, then save on the cost and MFs and get one with just next year's points.

We also bought an Aug UY but earlier this spring. It had '15 banked into '16 and '16 banked into '17 so we got 2 years of points with no dues. We were able to take a trip in May and can use the '16 points moving forward. We could have rented the points out essentially bringing our $PP down by around $26PP but of course decided to use them instead lol.
 
Until DVD has a property that people want, on with studios, 1 and 2 BR units, resales will stay strong. CC may help them, but it will take a long time to get over the blunder of the studio only at the Poly. I don't count the over priced over water mistakes as a useful option.
 
I saw one the other day that had no points until 2019 and couldn't close until Feb 2018. Who would buy this? Why when you can find loaded ones that can close quickly? It just made me wonder. We just bought a contract that still had 2016 points banked into 2017, so nice to have a year with lots of points in it.
I always look at the loaded contracts over the stripped ones.

I am in the process of buying a contract with Dec UY, that doesn't have points until 2018 with a delayed closing of the end of November 2017. We are buying this because we felt the price was good at $75/pt and we didn't need points before these would be available. Plus, by having the delayed closing, it gave us an extra 5 months before we had to pay for it. For us, it fit our needs. Yes, we could have tried to find one with 2017 points and then tried to transfer or rent, but just didn't feel that outweighed the ability to wait to purchase!!
 
I agree that using or renting any banked and current year points does maximize the return to the seller, but taking away next year's points is a good way to prevent an immediate sale and cause the contract to sit unsold for weeks or months.

Not when its a sellers market - which it currently is - and the seller isn't looking for too much money. You can't get a premium for a stripped contract, but it will sell. And IF you can find a loaded contract, it will sell for less than the points on it on worth, so smart sellers understand the current delta and play into it - which means stripping the contract, then letting it go for what looks like a low price.
 


I wonder what percentage of resale buyers are current owners? As a current owner, I wouldn't mind if a contract is stripped if the price is good at the resort I want with the right UY, as I already have points to use. I would probably pass on anything that does not have some amount of 2018 points. Inventory is currently quite low, so the seller can certainly wait for the price they are looking for. I have a 50 point AKV contract I may unload at some point, and I would probably sit on it until someone comes close to my (reasonable) asking price, as I'm in no hurry to sell it. And I probably would at least use current UY points before selling it.
 
I am surprised at many of the contracts for sale that have no points banked or available till 2018... and I see that some of these stripped contracts do sell although be it at a lower price.....any comments on this??
Comparatively speaking there can be a $25 per point (or more) value difference between the extremes of stripped vs loaded depending on the specifics but the sale prices aren't that different, maybe roughly $10 pp. As a seller it's a better deal to rent the points and sell stripped even if it takes a little longer to sell. As a buyer it's often a better deal to buy loaded even at a higher price assuming one can use or rent the points in question. It does appear to be the new norm to a degree, likely for that reason. Unless the prices reflect the true value difference at some point, I suspect we'll see this trend continue.
 
We ............(snip)..... plan on retiring to the west coast of Florida in a few years and we wanted a small resale contract and a small contract direct (for the perks). .........
Since you will be a Florida resident, you will be able to purchase the Florida resident annual passes. Those comparable to the DVC passes are the same price and you will have additional annual options not available to DVC members. You may want to revisit your plan to buy even a small direct contract to be sure the other perks are worth the large premium to buy direct. They wouldn't be to me, but YMMV.
 


Comparatively speaking there can be a $25 per point (or more) value difference between the extremes of stripped vs loaded depending on the specifics but the sale prices aren't that different, maybe roughly $10 pp. As a seller it's a better deal to rent the points and sell stripped even if it takes a little longer to sell. As a buyer it's often a better deal to buy loaded even at a higher price assuming one can use or rent the points in question. It does appear to be the new norm to a degree, likely for that reason. Unless the prices reflect the true value difference at some point, I suspect we'll see this trend continue.

Add in that the current owners are usually dealing with better information based off experience and make the decision on what to sell, when and for how much, and it won't change unless the stripped contracts stop selling at the price they sell for now. And that isn't likely to happen as long as there is a significant delta between resale and direct and a healthy resale market.
 
Comparatively speaking there can be a $25 per point (or more) value difference between the extremes of stripped vs loaded depending on the specifics but the sale prices aren't that different, maybe roughly $10 pp. As a seller it's a better deal to rent the points and sell stripped even if it takes a little longer to sell. As a buyer it's often a better deal to buy loaded even at a higher price assuming one can use or rent the points in question. It does appear to be the new norm to a degree, likely for that reason. Unless the prices reflect the true value difference at some point, I suspect we'll see this trend continue.

When looking at BLT, I have found that if you buy a contract with just the current year's points, the value is $9.38 difference between having those points and it being stripped of current year's points if taking rental potential into account. Simple math is $15pp (rental amount per point) - $5.62pp (MF) = $9.38pp. Granted, this is not the extreme you are referring to, but that is a simple way to look at it. Closing costs add a different factor into the mix, but you will pay closing costs if you buy direct from DVD. If you negotiate for the seller to pay closing, then you can take that amount off the price. Basically, if I buy 200pts at $100pp with no 2017 points and no MF's for 2017, I've paid the equivalent of $109.38pp because of the potential loss of income. If you want to get really particular, you need to account for the fact that DVD prorates MF's depending on when you buy and take that into account. So, if I'm buying Feb UY in April 2018 and paying all 2018 MF's, then the seller got you for 3 months (January, February, and March) of MF's that DVD would have covered had you bought direct (someone please correct me if I'm wrong about this). Also, if you buy prior to the start of any particular month, DVD will "load" the contract with the current UY's points that you're in right before it turns over to the next UY. This is difficult to value because if you buy on Feb 1st, you don't get the points from the UY that ended on January 31st. If you close on 1/31, then DVD will bank those points into the next UY. I know everyone debates this "value", and people are entitled to their own formulas, but that is mine.
 
Add in that the current owners are usually dealing with better information based off experience and make the decision on what to sell, when and for how much, and it won't change unless the stripped contracts stop selling at the price they sell for now. And that isn't likely to happen as long as there is a significant delta between resale and direct and a healthy resale market.
That may account for part of the reason they're not as different as maybe they should be but doesn't change the realities as a new buyer which is that generally a loaded contract is a better deal than a stripped one even at a "higher price". But it does depend on specifics including lead time. IMO it's helpful to understand the extremes to help one understand the nuances of a given contract situation. But there are other factors including how difficult the UY, points package and home resort would be to get but these are often also much higher priced options, mostly VGF, VGC and BCV; all also a much lower value in terms of savings. Some of those factors also apply to BLT and BRV but not to the same degree.
 
When looking at BLT, I have found that if you buy a contract with just the current year's points, the value is $9.38 difference between having those points and it being stripped of current year's points if taking rental potential into account. Simple math is $15pp (rental amount per point) - $5.62pp (MF) = $9.38pp. Granted, this is not the extreme you are referring to, but that is a simple way to look at it. Closing costs add a different factor into the mix, but you will pay closing costs if you buy direct from DVD. If you negotiate for the seller to pay closing, then you can take that amount off the price. Basically, if I buy 200pts at $100pp with no 2017 points and no MF's for 2017, I've paid the equivalent of $109.38pp because of the potential loss of income. If you want to get really particular, you need to account for the fact that DVD prorates MF's depending on when you buy and take that into account. So, if I'm buying Feb UY in April 2018 and paying all 2018 MF's, then the seller got you for 3 months (January, February, and March) of MF's that DVD would have covered had you bought direct (someone please correct me if I'm wrong about this). Also, if you buy prior to the start of any particular month, DVD will "load" the contract with the current UY's points that you're in right before it turns over to the next UY. This is difficult to value because if you buy on Feb 1st, you don't get the points from the UY that ended on January 31st. If you close on 1/31, then DVD will bank those points into the next UY. I know everyone debates this "value", and people are entitled to their own formulas, but that is mine.
My previous post addresses much of this. IMO it's important to understand what you're getting and NOT getting, esp since maint fees are charged on a calendar year basis so you have to consider future fees into the equation. One can use whatever number they want for value but IMO, the price one could rent those points for through a broker is the floor. The maintenance fees applicable to those points, any fees reimbursed, who pays closing and how much as well as the lead time to use the points all factor into the final "difference". And since we're talking about at most 4 years worth of points but realistically 3 years and eventually you end up at the same place long term, this is a short term financial comparison and one can not reasonably look at the cost over the life of the contract or any longer term after they contracts are the same. There is some minor variability on home resort and fees but I think it's little enough to ignore for most situations. Closing generally would be the same for purposes of this comparison and realistically as well. Thus it's the value of renting 3 years worth of points subtracting the fees reimbursed and the fees paid in the future on those points only plus any applicable taxes as the spread. Potentially as much as $45-48 pp on 3 years if one got the seller to pay next years dues. Realistically assuming the buyer pays all the dues going forward and reimburses (usually overpays) for this years points, that drops to more the in $25 pp range since generally one doesn't have to pay additional dues on the banked points. Obviously there are variables such as lead time till point expiration. And even if one decides not to rent them out, they still have the same inherent value so effectively one is paying the same additional for the stripped contract even if they wouldn't have rented the points.
 
That may account for part of the reason they're not as different as maybe they should be but doesn't change the realities as a new buyer which is that generally a loaded contract is a better deal than a stripped one even at a "higher price". But it does depend on specifics including lead time. IMO it's helpful to understand the extremes to help one understand the nuances of a given contract situation. But there are other factors including how difficult the UY, points package and home resort would be to get but these are often also much higher priced options, mostly VGF, VGC and BCV; all also a much lower value in terms of savings. Some of those factors also apply to BLT and BRV but not to the same degree.

Yes, but the other reality at play is that a new buyer tends to have an emotional investment in getting the deal done - so won't wait around for that better deal. And honestly, possibly shouldn't wait around for that better deal, since it might be a long time coming - the good deals often have multiple offers and it could be months of shopping before you have something that has been accepted and is through ROFR.

For those adding on a second or third (or seventh) contract, waiting can make a lot more sense - and those people are often a lot more knowledgeable. But those stripped contracts will go at a premium as long as there are people posting here with "my spouse just agreed we can buy DVC! I hear resale is a good deal! I can't wait!!!!!"
 
Yes, but the other reality at play is that a new buyer tends to have an emotional investment in getting the deal done - so won't wait around for that better deal. And honestly, possibly shouldn't wait around for that better deal, since it might be a long time coming - the good deals often have multiple offers and it could be months of shopping before you have something that has been accepted and is through ROFR.

For those adding on a second or third (or seventh) contract, waiting can make a lot more sense - and those people are often a lot more knowledgeable. But those stripped contracts will go at a premium as long as there are people posting here with "my spouse just agreed we can buy DVC! I hear resale is a good deal! I can't wait!!!!!"
I think the best way to look at this info is as an evaluation tool, not everyone will get the best deal. However, I feel many new buyers buy too quickly and make poor decisions doing so. Anything that can delay them somewhat and increase their level of knowledge and confidence is a good thing up to a point. IMO that point is around 6 months of active investigation and sufficient online and DVC experience. Trying to buy quickly and get that next trip on points often costs more than the trip itself would done OOP. But it does go to support my point on why resale prices won't tank unless all of WDW does.
 
The other piece of the equation is that not everyone is prioritizing best price - and that will also skew the market. On both sides, buyer a seller, there may be other factors in play. A seller may be prioritizing quick sale over getting dollar value - and might be willing to let the contract go for a relative song - and loaded - whereas one sitting on a loan might be unwilling to budge on a higher price. A buyer may want something specific - the right resort, the right use year, and an uncommon number of points might be worth more to them than a good deal, or they too might be looking for quick and willing to pay more.
 
I've seen people boast about flipping contracts in some of the DVC FB groups I belong to. They are buying up contracts and using the points then selling them right after. Claims that that is profitable. I wonder if there are more people doing that then we think.

With closing costs today, I find that hard to believe. Sure they would only pay that expense when buying, but still those dollars add up. I think a number of buyers buy a contract and find out they cannot afford it, so they want to use as many points as they can, thinking that will help pay for the dues that are owed.
 
I saw one the other day that had no points until 2019 and couldn't close until Feb 2018. Who would buy this? Why when you can find loaded ones that can close quickly? It just made me wonder. We just bought a contract that still had 2016 points banked into 2017, so nice to have a year with lots of points in it.
I always look at the loaded contracts over the stripped ones.
We put in an offer in late Feb even though there was a delayed closing of late June.

It was the resort we wanted, with a use year that works well for our vacation travel, and it was a "small" 100 point contract. Exactly what we wanted because we know we'll likely add on later.

We had most of the cash saved up but the extra time allowed us to save/earn more, so in the end, we financed none of the purchase. AND, had we waited, we'd have slim pickings of contracts (and would have paid more) since it's such a sellers market. It was a buyers market in Jan and Feb (common trend for resale).

Now, waiting till February feels far away, but if you aren't going any time soon...

Just make sure you have some sort of penalty in the contract if the seller backs out.

It'd make more sense if prices are low so you can lock in a good price. But BLT is going for $15pp higher than when we signed in February.
 
Last edited:
I saw one the other day that had no points until 2019 and couldn't close until Feb 2018. Who would buy this?

From a different point of view: the seller has nothing to lose listing this contract for sale. They know they want to sell after the last vacation in February. If they can find someone who wants the contract, they'll save time and close immediately after their last vacation, otherwise they'll just wait, as February approaches and goes by the contract will be more and more interesting and they will eventually sell it. As prices for resale are only going up and economy is going well, a buyer may see some value locking the price now to get points they don't need immediately. It's like betting that prices would go up more in the next year.
That's what I would do if I wanted to sell: strip it for one last vacation and list it for sale.
 
For anyone interested in using the 11 month window to full effect, 2018 is absolutely in play right now. While you can't stay in a room until 2018, you need the points now to book it.
 
With closing costs today, I find that hard to believe. Sure they would only pay that expense when buying, but still those dollars add up. I think a number of buyers buy a contract and find out they cannot afford it, so they want to use as many points as they can, thinking that will help pay for the dues that are owed.

i don't know why that would be hard to believe. Let's say I bought a loaded 400 point contract. My closing costs are about $1600. I borrow 2018 points and sell rent out 800 points. At $13 a point that comes to $10,400. I then sell the contract. Even if I got $4 less per point on the sale, my costs would be $1600 on the closing, $1600 on the loss during the sale, and the commission (at 10%) to the broker for the sale. I would still make money on the sale, anywhere from $3 to $5 thousand with very little effort on my part.
 
i don't know why that would be hard to believe. Let's say I bought a loaded 400 point contract. My closing costs are about $1600. I borrow 2018 points and sell rent out 800 points. At $13 a point that comes to $10,400. I then sell the contract. Even if I got $4 less per point on the sale, my costs would be $1600 on the closing, $1600 on the loss during the sale, and the commission (at 10%) to the broker for the sale. I would still make money on the sale, anywhere from $3 to $5 thousand with very little effort on my part.
You'll also have to cover the fees on the points you rented in most situations, esp any that were not already banked going in. And there are income taxes due at marginal rates.
 

GET A DISNEY VACATION QUOTE

Dreams Unlimited Travel is committed to providing you with the very best vacation planning experience possible. Our Vacation Planners are experts and will share their honest advice to help you have a magical vacation.

Let us help you with your next Disney Vacation!









Top