Large contract worth less than smaller contracts ?

[davidjonmichael]

How would everyone value a 500 point contract vs multiple 160 point contracts.
How much less is the 500 point contract worth on the resale market ?

5% 10% 15% 20% less ?

Thanks for your opinions.

[ovalhead96]

I'd say the biggest challenge is getting someone that wants that many points.

Another thing is people starting out will be more likely to buy a smaller contract.

[dschwarzbauer]

The problem lies in the number of people who can afford to buy such a large contract. With so few people being able to buy such a large contract it lowers the value plus anyone interested would know that when it come time to sell it could be very difficult. Of course you would have to look at the different resorts. Let's look at SSR. If you were to sell 4 small contracts of $125 you could probably get $60. If it's one 500 point contract then I would say you are looking at around $45. Of course you also have to look at banked points and borrowed points and if Disney is buying them.

[lovindisney]

Originally Posted by dschwarzbauer

The problem lies in the number of people who can afford to buy such a large contract. With so few people being able to buy such a large contract it lowers the value plus anyone interested would know that when it come time to sell it could be very difficult. Of course you would have to look at the different resorts. Let's look at SSR. If you were to sell 4 small contracts of $125 you could probably get $60. If it's one 500 point contract then I would say you are looking at around $45. Of course you also have to look at banked points and borrowed points and if Disney is buying them.

In general. smaller contracts sell for more and are more attractive. However, if you intend to keep the points until they expire, it is more cost effective to buy one larger contract because of closing costs, etc. If you plan to sell your points down the road, it is easier to sell smaller contracts but the exclusion to that would be a desirable DVC. In that case, a larger resale contract may not be an issue.

[eileenkeeney]

If I wanted 500 points, then I would value a 500 point contract as more valuable than two 250 point contracts.

If I did not think I wanted 500 points, then I would not buy a 500 point contract no mater how you priced it.

Based on the visiting habits of many who frequent this site, 500 points does not seem like it would be too many points.

With 19 rentals allowed per year, 500 points does not seem like too many.

[tomandrobin]

Originally Posted by davidjonmichael

How would everyone value a 500 point contract vs multiple 160 point contracts.
How much less is the 500 point contract worth on the resale market ?

5% 10% 15% 20% less ?

Thanks for your opinions.

A few years ago It was 15%-20%, but the past year I think it more around 10%.

[Delaware Mike]

Here's the thing... If someone had a 500-point contract listed on the resale market, they (1) must need to sell it, and (2) realize they haven't the "selling power" as someone with two 250-point contracts. While both point levels would be difficult to move, the 500-point contract would be a tougher sell.

I think Tom is right in that a year ago, the higher level contract would be priced 15% lower per-point. However, I'd be willing to bet that contract is valued even lower now.

But with all this being said, the DVC resales market is much like any other real estate market... buyer's set prices. The one difference is that Disney has a say in the matter (ROFR). However, Disney also knows that if they ROFR a large contract, they won't have that revenue stream associated with 500 points. They already made their money on the initial contract, and if they exercise ROFR on 500 points, they will need to make a cash outlay, then sell those points again, while forgoing that revenue on the MF. (And one other thing I believe... the timeshare market isn't as strong right now as Disney would have us believe...even at Disney. Selling 500 points, even when broken into smaller contracts, is going to be tough in this economy, IMHO.)

So, if you find a 500-point contract that you want, go for it... price it where you'd want to buy it, and let the chips fall. If you're not too greedy in your offer, you might be pleasantly surprised in it passing ROFR. (I'd offer 20% less per point...)

[Breyean]

In the past 2 weeks or so, two VGC contracts, 500 points each, sold. Asking price was $88/point. Each contract also came with 500 banked points, for a total of 1000 immediately available points.

I was surprised they sold so fast, as many of the prior comments here have pointed it - it's not that easy to move large contracts.

Now I wonder if they will pass ROFR since even if they went at the asking price, that's right on the cusp of what Disney has been buying back VGC at from what I've seen.

That's a boatload of points, even at a resort with a relatively high points chart. Wonder if they were bought by someone who does a lot of renting out.

[eileenkeeney]

Originally Posted by Breyean

In the past 2 weeks or so, two VGC contracts, 500 points each, sold. Asking price was $88/point. Each contract also came with 500 banked points, for a total of 1000 immediately available points.

I was surprised they sold so fast, as many of the prior comments here have pointed it - it's not that easy to move large contracts.

Now I wonder if they will pass ROFR since even if they went at the asking price, that's right on the cusp of what Disney has been buying back VGC at from what I've seen.

That's a boatload of points, even at a resort with a relatively high points chart. Wonder if they were bought by someone who does a lot of renting out.

I bet they do ROFR It, because they can split it up in to multiple smaller contracts, and they have a waiting list for VGC.

[lovindisney]

Originally Posted by Breyean

In the past 2 weeks or so, two VGC contracts, 500 points each, sold. Asking price was $88/point. Each contract also came with 500 banked points, for a total of 1000 immediately available points.

I was surprised they sold so fast, as many of the prior comments here have pointed it - it's not that easy to move large contracts......

I can't speak to others, but I said in my reply that it depended on the desirabilty of the resort. VGC is desirable to those who like DL because it is a smaller resort (thus harder to get into) and the MF are lower. The contracts, as you point out, were also loaded. That makes them even more desirable.