Contracts selling with no points till 2018

[Buzzsgramma]

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??

 

[TinyTGO]

It's not that uncommon, or unusual for a member to want to use the points that they've already paid dues on. They may have even planned a one last big trip, and borrowed from the future year. Obviously, there are also people who probably rent out their points and try to cash out on a future year before selling.

As far as buyers are concerned, stripped contracts are a better fit for some vs. loaded or regular contracts, and vice versa.

 

[DduzDis]

Could be time of the year. I bought earlier this year and found many (if not most) of the contracts were loaded in some way. At that time it seemed people were selling before they had to pay their annual dues. I think it may be seasonal, but that is just a guess. For what it is worth, stripped contracts are going to be more likely to pass ROFR.

 

[MaryLovesPoohBear]

If we had to suddenly sell our contract, there wouldn't be available points until 2019. We've already booked with 2017/2018 points.

So the buyers wouldn't have anything available until our points drop in 2019.

 

[TinyTGO]

We are thinking about selling 2 of our contracts... one has full 2018s but the other is empty until 2019. I think if either had 2017s left, the thought to sell would not have even crossed our minds. The only thought would have been scanning Southwest airfares, and planning our next trip.

 

[JETSDAD]

The market doesn't seem to value available points very highly (or rather detract very much for non-available points). Any seller would be better off either using or renting out any available points and selling stripped.

 

[Marriedbythemouse]

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.

 

[mousehockey37]

Everyone has their reasons.

As a buyer, it's something you could actually negotiate on. If the seller wants X but it's stripped until 2019, then there's no value in it for the buyer until then, so price X should be negotiated to show that. Remember, to those that buy contracts like that, you're still going to pay the MF on it until you finally can use, unless the MF's are negotiated in the sale.

I agree though, that looking at what's out there, that it's like trying to buy a used car but you're missing tires, most of the engine and a steering wheel, lol. You want to be able to use the product when you buy it, for a good deal of contracts, this isn't the case.

 

[lalariner]

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 just had a contract sent to ROFR with 150 points - 24 points available in 2017 and full points in 2018. Right before our broker sent that contract, he sent another one with the same number of points but none available until 2019. The different was $2/point. Easiest $300 we ever spent - well, hopefully spent .

 

[Wakey]

Financially you are better as a seller selling stripped- it's worth a bit less but not 13 a point per year less you could get renting. As a result as a buyer it is better buying a loaded. I bought a loaded SSR contract and rented the banked points out immediately , immediately reducing the contract to under 64 a point.

 

[TexasChick123]

I wanted to chime in simply because I have dealt with this firsthand in both scenarios. I had 2 mostly loaded BLT contracts taken by ROFR. I just bought one with 14 points for 2017 and full 2018 points. On its face, it looks as though I'm making a worse deal with the current contract. However, I ran the numbers every time I tried to purchase, and the stripped contracts are not that bad (and are sometimes better) for the right price. I will explain with my contracts:

Contract 1 - June UY 200 points (taken)
179/2017 points; 200/2018 points; 200/2019 points
$106pp, buyer paying closing, buyer paying pro-rated MF's for 179 points

Contract 2 - September UY 250 points (taken)
179/2017; 250/2018; 250/2019
$102pp, seller paying closing, seller paying 1/2 of MF's on 179 points

Contract 3 - June UY 200 points (passed)
14/2017; 200/2018; 200/2019
$100pp, buyer paying closing, seller paying 2017 dues

On its face, it looks like the 2 contracts that were taken were better than the one I ended up with. However, when you run the numbers for ROI (return on investment), you will see Contract 2 was the best deal, followed by Contract 3, then Contract 1. Ironically, Contract 1 was the worst deal for me, and they took it (I won't go into my theories on why they take certain contracts for this thread). My point is that as long as you discount a contract appropriately when you have used all the current UY points, it will still sell and saves money at closing for the buyer because there is no reimbursement for 2017 dues. If you get the 2017 points, you will most likely have to pay MF's on them, even though that should follow calendar year and not UY, but I digress. A lot of people want to take "one last trip" with that AP or their points, so they are gone. Others rent out one more year to get the $$$ before selling which is why they're stripped. Just my $.02.

 

[fearthisinc]

I was actually just looking at a small 50 point contract that has no points until 2019.. It was an Animal Kingdom contract and they are asking $100 per point.. I sent an email to the broker handling my current contract and just for the hell of it I put in an offer.. It was the same Use Year as the contract we are in the process of closing on and same home resort so we figured why not give it a shot.. I told the broker that my offer was firm as I did not "need" the contract.. Broker wrote me back saying they have received numerous offers at $80 per point and someone "supposedly" offered in the $95-$97 range and the seller declined saying they were firm at $100 per point.. Honestly, I cant see the point in purchasing such a contract.. Come 2019 when you finally get your points, chances are that the value of the Animal Kingdom will have gone down from today's rates.. I paid $85 per point on my contract and still felt as though I paid higher then I should have.. Even the broker told me that they told the Seller that they should be considering a lower selling point as $80-$85 per point is more realistic.. That would be for a regular contract.. Being a stripped contract, I really couldn't see spending more then $75 per point.. I think what is happening is people are seeing that there is low inventory in the market so they are stripping the contracts and then putting them out on the market.. Eager buyers see the low inventory and figure they need to get in somewhere and buy the stripped contracts at a premium price..

 

[ELMC]

The market doesn't seem to value available points very highly (or rather detract very much for non-available points). Any seller would be better off either using or renting out any available points and selling stripped.

Financially you are better as a seller selling stripped- it's worth a bit less but not 13 a point per year less you could get renting.

I agree to a point, but I think when you get into situations where you are borrowing and stripping out future year's points you are making your contract very unattractive. Plus you'll have to reimburse MFs at closing, which gets taken out of the point rental income.

I think there's a sweet spot, and I think it is contracts that don't have any current UY points but having a full allotment of points coming in the very next UY. This works better with later UYs than with earlier ones, IMO.

 

[CraigInPA]

Any seller would be better off either using or renting out any available points and selling stripped.

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.

 

[CookieandOatmeal]

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.

 

[KnightFamily]

We bought a stripped contract that doesn't have points until 2018. We got a good deal. We just got back from a trip this March and decided to finally buy in. Since we just got back we knew our next trip was going to be Christmas 2019. Therefore we only needed 2018 and 2019 points. We ended up getting more points this way.

We got 100 AKL Dec contract for 78$ a point and seller paid our closing. In our situation we got a better deal then buying a loaded contract, even with rental income possibilities.

 

[allshookup]

We just bought a 50 point contract at SSR with no points till Feb/2019. We were willing to buy stripped because we 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). Our plan is to head to WDW a couple of times a year once we move and the price reflected the lack of current points. Smaller contracts go fast and usually at a higher price so we were glad to get what we did. We also sold a contract a couple of years ago that was stripped and it went in one day, but again our price reflected that and I think a lot of people like us are willing to buy stripped if it's for a reasonable price.

 

[gillep]

We bought a contract earlier this year that didn't have points available until 2018. Given that we travel in the Fall, we knew we wouldn't be able to book anything (BCV) until Fall of 2018 anyway, so it really didn't matter to us.

 

[erin1715]

As a buyer, I have no problem with a contract that doesn't have points until 2018 since that's only next year. I do have a problem with contracts that have none until 2019. But right now it's a sellers market so I'm trying to be patient!

 

[ITGirl50]

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.