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Why are DVC resales almost never cheaper when buying “bulk” points?

Discussion in 'Disney Vacation Club' started by HansGruber, Aug 9, 2017.

  1. HansGruber

    HansGruber Member

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    The general trend I see: unless the number of points offered is significantly low (under 100 points), the price-per-point cost is almost always the same regardless of how many points are being offered.

    To me, it seems like the owner is at a disadvantage when owning a single large membership (300+ points) versus several smaller memberships (three 100 point packages).

    Can someone enlightening me as to why the price-per-point cost is pretty static for any offering over the 100 point threshold?
     
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  2. nickys

    nickys Well-Known Member

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    I don't really understand the question.

    When the owner bought, they would have paid the same price per point, no matter how many points he bought. A "bulk buy" discount might apply to toilet rolls, but I don't see why it would apply to a DVC resale.

    As for the one large vs multiple smaller points packages, there are 2 sides to this. I wish we had bought 2 smaller ones, so we could leave 1 to each of our sons. But if selling, you might be left with points that you couldn't get rid of for much longer. A smaller package is probably easier to sell though.

    I don't have any experience of selling though.
     
  3. ParentsOf4

    ParentsOf4 Well-Known Member

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    The price per points did vary years ago when DVC resales took a downturn. Several sites had large inventories and shoppers had plenty to pick from. Price variability based on size of contract was needed in order to sell larger contracts. For example, the price per point of a 240 point contract was lower than a 160 point contract. (Smaller contracts tend to be in higher demand.)

    Today's DVC market is different. It's very much a seller's market. In this environment, sellers can demand top price on even the largest contracts.
     
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  4. helenabear

    helenabear Well-Known Member

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    I have noticed that much larger contracts will be lower. Contracts in the 100 and under are the most costly. In those cases one needs to do math to see if it is worth saving to do a resale. In the up to about 300-350 or so range they are pretty close to the same. Over that (definitely over 500) it drops again. I recently was looking at points and did notice it will vary.

    Now the bigger difference in cost though is through the resort itself. The other thing to take into consideration is how many points are available now or if the contract is stripped or not. That can account for other variances in asking price.
     
  5. HansGruber

    HansGruber Member Original Poster

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    Because:

    1. Harder to sell much larger contracts
    2. More beneficial to purchase 2-3 medium contracts vs. a single larger contract
     
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  6. HansGruber

    HansGruber Member Original Poster

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    What made the market change?

    I have noticed similar. 2 years ago, popular sites would easily have 70+ contracts available. Now, they are down to a few dozen.
     
  7. nickys

    nickys Well-Known Member

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    Well yes, both statements are true.

    But at the same time, if I had a large contract I would still be trying to get as much for it as I could. If there's a market price for points at a particular resort, I would not be starting off trying to go lower than that, even if I was prepared to accept a lower offer.

    However I have no experience on which to base this theory, so who knows?!
     
  8. Phonedave

    Phonedave Well-Known Member

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    Smaller contracts usually go for more because people are using them as an "add on" contract. They are also less of them out there. You cannot buy 25 point or 50 point contracts direct anymore. If you are looking to add on a few points to your existing contract, it is harder to find a small contract. It's supply and demand.

    We were looking to add on to our existing 160 point contract a few months back. My wife would stalk various sites, looking for the fabled "unicorn contract" - 50 points, where we own, in our use year. One popped up and I called about it. The broker said she allready had 4 bids on it, and was going to close the sale in 2 more hours (it had only been up for about 2 hours). She said she was advising people to make their "highest, final bid" - we bid 10% over the asking price, and then added on $50 more (just to make it higher than anybody who just went 10% over) and we ended up winning the contract. No idea what the next lowest bid was. When watching the sites for a contract, we saw lots of 50 point contracts go up for sale, and then be listed "pending sale" in under a day.
     
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  9. nickys

    nickys Well-Known Member

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    I thought, from reading other sites that these small contracts often offer little savings over buying direct. And since you CAN buy 25 or 50 points direct as add-ons, I suspect these small contracts are also going fast just because they are small and therefore more affordable. I don't think they are always just from those looking to add on, unless of course not too many people realise they could add on for little more and therefore get access to some of the discounts only available to direct buyers.
     
  10. helenabear

    helenabear Well-Known Member

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    It depends on where you buy. In my case I wanted a newer resort. The resale price was in the $150 ish range. If you could get your hands on one. The closing costs were significantly higher with resale ($600-700 vs $140) which cut into it. The end result with the rewards we got, the extra year of points (no MF paid) and a reallocation of my points, it was a slightly better value over all to do direct. We already had perks so not a big deal.

    Now some other resorts even in the under 100 point range are going for as little as $89/point and closer to $115 with a lot in the $100 range. Those would be cheaper to buy resale than direct. Really it all depends and I always say look and run the numbers. Perks can come and go (as we debated ad nauseam elsewhere lol) so for some those don't matter as much.
     
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  11. Phonedave

    Phonedave Well-Known Member

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    Exactly, as you get into smaller and smaller contracts the savings over direct become less and less. However there still is a savings (if there was not, why would anybody buy the resale then). There is a hard ceiling on the price of resale contracts, which is the break even price of buying direct.

    The 50 point contract that we bought was at a savings over a direct contract. Direct SSR contracts are $145 a point (I believe - they were when I bought the resale) and we bid $101 a point (I can't remember what they were asking but it in the mid $90's range) That represents a savings of $44 a point, or $2,200 on the 50 point contract. Even with the extra closing costs of about $450, it was still a savings. Even if we overbid by a couple of dollars a point, we still saved over a direct contract. We were willing to pay a bit more over what was the going resale rate for a contract in this case because this contract matched our existing one perfectly.

    Member perks did not enter the equation in this case because our existing 160 point contract is a direct contract, so we have those perks anyway (and perks do come and go)

    -dave
     
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  12. HansGruber

    HansGruber Member Original Poster

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    There is ALWAYS a savings buying resale over retail.
    I haven't kept up with the market, but a few years ago I don't think there was ever a situation where retail was a better value than resale.
    Perhaps times are changing, but anything older than a BLT contract use to be an immense amount savings.
    Saratoga use to be the best value as you got ~35 years of a contract for around $80/point.
     
  13. helenabear

    helenabear Well-Known Member

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    My post you quoted explained exactly how it became a better value. Yes I could buy SSR, but I really don't like it there at all. I never would want it as my home and wanted to add on to a place with a longer contract. Below are specific details.

    When resale is in the $150s ($155 average) and the closing costs are adding $500 more and I got about $300 in rewards on my credit card, an extra year of points for no extra charge and no MF fees, that original idea of saving money was lost. When I added in my rewards and savings im closing costs, the difference was around $250. 50 points rented at $15 is $750 in value and saved $301.56 in maint. fees made the direct value better. It pays to run numbers

    Now if you want a cheap resort that is in low demand and low direct buy in, then yes it's cheaper, but it isn't always for higher demand or newer resorts.
     
  14. helenabear

    helenabear Well-Known Member

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    Resale for some resorts are the only ways to buy (VGF and VGC for example) so there is that as an option for those with resale. If we didn't have our credit card rewards (can't use cc on resale) it would have made it closer. We also got 6 months interest free if we wanted LOL. I know I could have picked another cheaper resort, but we wanted where wanted for a reason (fear the difficulty of booking at 7months and we'd want 2 rooms).

    Most resale is a great deal! I always tell my friends to look there first when buying in. I've done both myself (direct after resale actually) and see good to both.
     
  15. HansGruber

    HansGruber Member Original Poster

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    But you have to seriously question if the incredibly inflated price-per-point for the newer resorts is a better value than the older resorts. A BLT contract is only 6 additional years but is just short of DOUBLE the cost for Saratoga Springs (resale pricing). That's NOT a very good trade-off.
     
  16. GoofGoof

    GoofGoof Well-Known Member

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    I think as @ParentsOf4 said there was a time when you could definitely buy a larger contract for much less per point. The larger contracts had less potential buyers due to the total cost to buy in. The resale market seems to be pretty strong right now and there are less "discounts" out there.
    I think that depends on personal taste. If you want to stay at BLT or you really don't want to stay at SSR then it's probably worth the extra cost. If you don't really care which resort you stay at, SSR resale is a good deal and has low MFs. When I bought my resale contract at BLT it was during the resale downturn and BLT points were going in the $90s while SSR and OKW were as low as $60. I was willing to pay 50% more to ensure I got to stay where I wanted. BLT also had a few more years on the contract but that didn't factor in a whole lot for me.
     
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  17. HansGruber

    HansGruber Member Original Poster

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    Right, but you can still stay at BLT with a SSR contract. The inflated BLT cost just guarantees you BLT each visit....which, if you don't stay at every single time, will completely negate the inflated price tag. So, while I agree BLT is a fantastic resort, any deviation to another resort, on any DVC trip, will result in a theoretical financial loss.
    The higher price tag will financially "handcuff" you into staying at BLT.
     
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  18. helenabear

    helenabear Well-Known Member

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    If you want a harder to book room at BLT (standard view) then SSR won't do you any good though. Or if you want VGF you might be out of luck.

    The bulk of our points are at OKW so I get what you are saying, but sometimes if where you want to be is a harder to book location or if you know
    you will need multiple rooms, then you pay the premium. That is where we fell with our add on. We didn't want just any points, we wanted the home resort advantage with the add on.

    For me I will never buy where I do not want to stay, that means SSR and BLT are out. Tried them with OKW points and don't want them. We have specific desires for rooms and locations and buying where we want to stay will do that.

    Given our overall average cost of price per point spent is around $80, I'm good with what we have. Just know that there are enough people saying it is getting harder to book at 7 months that it should be a consideration to buy where you want. I'm not sure we have really seen it, but I believe them. We would be happy if we never stayed anywhere but our current home resorts.
     
  19. dreamfinder

    dreamfinder Well-Known Member

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    AS @ParentsOf4 said, bulk contracts most definitely used to be less per point. If you can dig up some of the old ROFR tracker threads on other boards you might get a better idea of that. I just don't see nearly the same number of large point deeds being offered as before. Either they are getting snapped up much faster, or with the larger number of properties/smarter owners, people are buying several smaller deeds instead of one large deed.

    The market overall is very robust right now. For instance, we own at AKL, and at one broker I just checked, every single (pending and active) AKL listing they have is at least $10 more than we paid 8 years ago, and in most cases $15-30 more than we paid. And our contract is on the smaller side.
     
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  20. GoofGoof

    GoofGoof Well-Known Member

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    It's a little more complicated than that. When I was deciding to buy in the resale market was in the toilet. We had no guarantee that it would recover like it did. BLT was holding value much better so if I needed a quick out I figured it was better to own the more desireable property.

    Plus it really wasn't more money overall. The fixed points are only a portion of the total cost per stay. BLT had much lower MFs than SSR or OKW so over time I also factored that savings in. Even though BLT price per point was 50% higher upfront the cash out over the life of the contract (including factoring in the time value of money) by 2042 when OKW would expire would have been more total dollars than buying the same points at BLT and I would still have 18 years left on the BLT contract. Nobody could predict that BLT would have much larger MF increases than the others. It's now on par with SSR but still cheaper than OKW.

    If you think about it purely from an initial cost perspective you'd be better off buying a non-DVC timeshare and trading in via RCI. There are a bunch of other reasons that plan may not work for you which is probably a topic for another thread but the point is if you only consider initial price per point no DVC purchase makes economic sense.
     
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