Thoughts on Lowball Offer

[npatellye]

I just came across a 60 BLT point contract up for auction through a bankruptcy company on eBay. Current bid is $6100. I’m not looking for BLT but it sure is tempting!

 

[Hopfather28]

Patience pays off. Found a contract that was a bit bigger than I had wanted but only by 25pts. 275 points at Poly in a June UY that was stripped until 21. Asking $148pp accepted $120pp.

 

[rachaelg]

I just came across a 60 BLT point contract up for auction through a bankruptcy company on eBay. Current bid is $6100. I’m not looking for BLT but it sure is tempting!

Ooooh! That's super tempting! I would love to hear from anyone who has gone this route to purchase a contract! What is the process like?

 

[Cyberc1978]

I’ll admit I really wanted $90 and even debated just waiting to see if eventually the right AKL, CCV or Poly came out. Ultimately I probably should’ve been patient. But keeping our annual fees low is desirable, and I happened to read a post about how for low point contracts, that few dollar per point contract is not a lot of money, do you want to lose the contract for that? So I decided I’d accept $95, especially as the Poly I was offering on I couldn’t get the sellers below $135. If it were a larger contract, I’d have cared a lot more about getting to the price point I wanted, but in the long term we decided $500 was not that much and it was the right contract for us.

Sorry to have snatched it from you, though! It almost had been yours as we almost picked up a 160-point AKL last week instead but then someone bid higher than us while we were going back and forth with the owner. That’s part of the reason I was convinced to not quibble over a small amount. If I had accepted their counter at $108/point I’d have gotten a fully loaded AKL contract, but I had really wanted lower. Ah, well. Only paying for another 100 points of dues is probably better anyway.

Exactly $5 is not that much in this case and seen over the life of the contract it’s pennies. We all need to know when to pick our battles.

 

[iflyjetzzz]

I just came across a 60 BLT point contract up for auction through a bankruptcy company on eBay. Current bid is $6100. I’m not looking for BLT but it sure is tempting!

Note that it has another 22 days left on bidding. It may move up a little more before the end of auction, but it's the last few minutes where it should move up in price.

Ooooh! That's super tempting! I would love to hear from anyone who has gone this route to purchase a contract! What is the process like?

I bought a contract from this company on ebay back in January - same deal; bankruptcy. One complication here is that the contract is owned by two people but only one's going through bankruptcy. It says the other will file a quit claim deed, but that will make things a bit more complicated with the Orange County Comptroller when you file the deed.
I got the signed deed for my property in mid-Feb (it took a while due to having to get a few signatures.
I sent the deed into the Orange County Comptroller and got the deed registered.
At that point, I should have heard from DVC, but I didn't because they were expecting the bankruptcy trustee to pay the 2020 dues. I finally was able to get someone to allow me to pay the 2020 dues last week.
I am still waiting for DVC to have this registered to me in their system.
So the process is a lot longer than a normal sale.

 

[mrte62]

Very interesting! So its possible the listing did sell quickly, but not necessarily at full price.

That is what happened to us. Settled on a $6 less than list SSR contract that had been only posted for a few days... Broker posted as agreed at full price.

 

[mmackeymouse]

Update again:

So, here is what I was told about the holding points by the broker.

None of the points in holding are bankable. I guess, I am curious/confused. I understand why other years' points wouldn't be bankable. But, I guess I don't quite understand how 2020's points would be in holding/not bankable.

She also said that DVC frowns upon points-renting, so she could not comment on whether or not they are rentable. She also said points were not transferrable. Not sure if that statement was specific to these points or just a blanket statement to cover themselves.

At 81.25, it still feels like a decent deal, but not a great deal. I am torn. There is a decent chance I will end up using a good portion of the points anyway later this year. But, if I don't, I'd really like to be able to rent them, which....I have a feeling they would be rentable.

Thoughts?

 

[KAT4DISNEY]

Update again:

So, here is what I was told about the holding points by the broker.

None of the points in holding are bankable. I guess, I am curious/confused. I understand why other years' points wouldn't be bankable. But, I guess I don't quite understand how 2020's points would be in holding/not bankable.

She also said that DVC frowns upon points-renting, so she could not comment on whether or not they are rentable. She also said points were not transferrable. Not sure if that statement was specific to these points or just a blanket statement to cover themselves.

At 81.25, it still feels like a decent deal, but not a great deal. I am torn. There is a decent chance I will end up using a good portion of the points anyway later this year. But, if I don't, I'd really like to be able to rent them, which....I have a feeling they would be rentable.

Thoughts?

Renting is expressly allowed by DVC so the broker doesn't sound completely knowledgeable about using DVC. They would of course be rentable but only for reservations 60 days or less from check in.

Points in holding means they are restricted because of a cancellation 30 days or less prior to check in. The basic premise is that a last minute cancellation means the room might go unfilled or at least has been tied up when other members may have wanted it so while the points aren't lost they are placed back into your account with restrictions that mean you can only use them towards a last minute booking of 60 days or less in advance. ie - cancel last minute = only able to rebook last minute.

Another restriction with holding points is that they remain in that UY and are not bankable. So that is why none of the points are bankable. They were probably partially incorrect about transferring. Current points can be transferred even if they are in holding so whatever number of points came from 2020 could be transferred. If the points were banked from 2019 or borrowed from 2021 they could not be transferred though. Holding points that are transferred remain in holding so there would probably be a more limited interest in them as the person getting them could not bank them and would be restricted to the 60 day booking window.

The only reason the holding might be removed is because they came from a reservation that was cancelled due to the resorts being closed now.

 

[mmackeymouse]

Renting is expressly allowed by DVC so the broker doesn't sound completely knowledgeable about using DVC. They would of course be rentable but only for reservations 60 days or less from check in.



The only reason the holding might be removed is because they came from a reservation that was cancelled due to the resorts being closed now.

Thank you for the explanation on how holding points work and how these points can and cannot be used. You addressed some of the internal questions I had. I understood that other UY might be treated differently, but figured that 2020 points would still be transferrable.

The second point is the part that I am wondering about. With a February UY, I have to assume that those points were collected for use sometime between February and now. (Considering the borrowing from 2021; they wouldn't be able to borrow from 2021 into 2019, so I'm assuming that time frame) So, if that's the case, I would assume those points would have been returned to the 2020 UY. The new holding account rules were only for those with April/June UYs. Unless maybe the vacation was sometime in Feb/March and was cancelled by the member within 30 days...that's the only thing I can think of.

All that is neither here nor there at this point. I guess my question would be...is it still worth it?

 

[MICKIMINI]

Only you can make a judgement, however I would listen to that "voice" in your head...it's usually right!

 

[ABE4DISNEY]

Okay, I have always looked at stripped contracts because I don't really NEED a glut of points next year--first time we have ever banked. (However, if I end up with a bunch, I will use them!)
Please help me look constructively at this contract so I can figure out strategy in the future.

120 pts at $100. April Use Year
2020 210pts, 90 banked
2021 120
2022 120

If purchased what are the maintenance fees for 2020--do you pay for the 120 or the 210?

The 90 banked points--do they expire by 11/30/20? Use them or lose them?

The 210 points? I'm assuming some are carried over from 2019? How many of those are bankable into 2021?

A lot of amateur questions-- Your thoughts/expert opinions?
Thanks!

 

[CarolMN]

Okay, I have always looked at stripped contracts because I don't really NEED a glut of points next year--first time we have ever banked. (However, if I end up with a bunch, I will use them!)
Please help me look constructively at this contract so I can figure out strategy in the future.

120 pts at $100. April Use Year
2020 210pts, 90 banked
2021 120
2022 120

If purchased what are the maintenance fees for 2020--do you pay for the 120 or the 210?

It's entirely negotiable for resale. MF are for the calendar year, not the use year. Since there are additional points available in 2020, I'd probably be willing to pay 2020 fees, but not reimburse for any from prior years.

The 90 banked points--do they expire by 11/30/20? Use them or lose them?

What is the original use year of the banked points?

If it was 2019, then the points will expire at the end of the 2020 use year, which is 3/31/2021.

If it was 2018, then the points would expire on 9/30/2020. These points would have had to be from a cancelled reservation that was supposed to occur in the latter half of March or the month of April.

(The 11/30/2020 expiration is for June use year points that were originally from the June 2018 use year, and were returned to the owner due to a cancelled reservation for Mar 16-31 or April of this year).

The 210 points? I'm assuming some are carried over from 2019? How many of those are bankable into 2021?

A lot of amateur questions--but we ALWAYS use our points so I never bank! Your thoughts/expert opinions?
Thanks!

The 2020 points that aren't banked are current use year points. They can be banked to 2021 as long as it is done by 11/30/2020.


You might find this thread helpful:

Understanding Use Year

 

[ABE4DISNEY]

Thank you, CarolMN, for taking the time to break this all down for me.

I will definitely check out that thread!

 

[KAT4DISNEY]

Thank you for the explanation on how holding points work and how these points can and cannot be used. You addressed some of the internal questions I had. I understood that other UY might be treated differently, but figured that 2020 points would still be transferrable.

The second point is the part that I am wondering about. With a February UY, I have to assume that those points were collected for use sometime between February and now. (Considering the borrowing from 2021; they wouldn't be able to borrow from 2021 into 2019, so I'm assuming that time frame) So, if that's the case, I would assume those points would have been returned to the 2020 UY. The new holding account rules were only for those with April/June UYs. Unless maybe the vacation was sometime in Feb/March and was cancelled by the member within 30 days...that's the only thing I can think of.

All that is neither here nor there at this point. I guess my question would be...is it still worth it?

My guess is that the owner cancelled a reservation that was for the time prior to the resorts closing. In that case points the normal cancellation rules were still in effect. Also, just to clarify, the removal of points in holding currently applies to all UY's if the reservations were during resort closures or even are upcoming thru the summer. It isn't just for April and June UY's. The specialized treatment that April and June UY's are receiving is to have their banked points extended for an additional 6 months and that their banking deadlines were extended to allow them to bank 2019 points that came from cancelled reservation even though they were past their banking deadlines.

Whether it's worth it is subjective and really the question is if it's worth it to you. I personally don't look at the deal and consider it at all bad. I'd learn more towards it being still being good. I just don't know if you could find better. I'm sure you could find worse. There also is still going to be some value in those holding points but the question during these times is how much.

 

[bookbunny]

Ok, quick calculations here: 210 @ $121.50 PP = $25,515, $1057+ MF's (?), $1200+/- close = $27, 772

Thinking is, an odd number will get someone's attention - I've used this strategy before. Only 151 points to reimburse seller for MF's so they feel it is a win. Close after August is a negative for them and should get you a lower price. I suggest giving them 24 hours to give you and yes or no.

I would say something like "I'd like to make an offer on a BCV contract I saw listed. It is the right UY for me, but I really am unsure about the after vacation August close...which means I won't even see the points until Halloween! (Pause) I just thought I would call and make an offer since it is the right UY. (Pause) I am willing to pay ****, cover the sellers MF's for 2020 and pay closing costs....(pause...wait...keep waiting...hold your breath). " When they tell you they will present it to the seller, then you say "Oh, and I'd like an answer in 24 hours please" in your sweetest voice! It's really important to pause, stay silent when appropriate and let them think about it!

Negotiations is what I have done pretty much my entire career...that is exactly what I would say if you sent me a check and told me to spend it LOL!

So I contacted them with an offer of $119 PP. They sent me a counter within 5 minutes for $125 PP. I figure I will give them 24hrs before I reply back. With a counter. I was thinking to ask them to pay the dues and I would cover the closing. Or should I do it the other way around.

 

[Sophie Weaver]

So, I've been checking every few days on the "instant sales" quote to see what they have up versus what is actually being posted to the website. Can confirm that for the majority of the resorts, the broker estimate and instant sale offers have come down by $15-25 bucks. Still waiting for my unicorn AKL contract but at this rate, maybe I'll end up with more Copper points instead

 

[Sophie Weaver]

Okay, sadly, it looks like my unicorn AKL may never pop up but our second thoughts were for SSR. I found one that fits what I want point wise and use year (Under 100 points, December UY) but it's set as one of those small contacts, seller will only accept full asking/closing cost. The contract has been floating around since late February/early March and I definitely think it's overpriced.

Do you think that type of note prevents people from low-balling? Does the broker have to present a low-ball offer that's below asking if the seller has that note? Thoughts. Give me your thoughts! Please?

 

[Sandisw]

Okay, sadly, it looks like my unicorn AKL may never pop up but our second thoughts were for SSR. I found one that fits what I want point wise and use year (Under 100 points, December UY) but it's set as one of those small contacts, seller will only accept full asking/closing cost. The contract has been floating around since late February/early March and I definitely think it's overpriced.

Do you think that type of note prevents people from low-balling? Does the broker have to present a low-ball offer that's below asking if the seller has that note? Thoughts. Give me your thoughts! Please?

Brokers are required to present all offers to the seller, regardless of the note,

I think It’s worth a shot to offer if you think it’s a contract you want, Worst is you get a no!

 

[CarolMN]

Brokers are required to present all offers to the seller, regardless of the note,

That's incorrect. Here's a section of the Florida Statute Chapter 475 that covers transaction brokers (which almost all agents operate under for timeshare sales:

"475.278 Authorized brokerage relationships; presumption of transaction brokerage; required disclosures.—
(1) BROKERAGE RELATIONSHIPS.—
(a) Authorized brokerage relationships.—A real estate licensee in this state may enter into a brokerage relationship as either a transaction broker or as a single agent with potential buyers and sellers. A real estate licensee may not operate as a disclosed or nondisclosed dual agent. As used in this section, the term “dual agent” means a broker who represents as a fiduciary both the prospective buyer and the prospective seller in a real estate transaction. This part does not prevent a licensee from changing from one brokerage relationship to the other as long as the buyer or the seller, or both, gives consent as required by subparagraph (3)(c)2. before the change and the appropriate disclosure of duties as provided in this part is made to the buyer or seller. This part does not require a customer to enter into a brokerage relationship with any real estate licensee.
(b) Presumption of transaction brokerage.—It shall be presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established, in writing, with a customer.
(2) TRANSACTION BROKER RELATIONSHIP.—A transaction broker provides a limited form of representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity or as a single agent. The duties of the real estate licensee in this limited form of representation include the following:
(a) Dealing honestly and fairly;
(b) Accounting for all funds;
(c) Using skill, care, and diligence in the transaction;
(d) Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
(e) Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
(g) Any additional duties that are mutually agreed to with a party."

 

[Lorana]

Okay, sadly, it looks like my unicorn AKL may never pop up but our second thoughts were for SSR. I found one that fits what I want point wise and use year (Under 100 points, December UY) but it's set as one of those small contacts, seller will only accept full asking/closing cost. The contract has been floating around since late February/early March and I definitely think it's overpriced.

Do you think that type of note prevents people from low-balling? Does the broker have to present a low-ball offer that's below asking if the seller has that note? Thoughts. Give me your thoughts! Please?

One other thought to consider, if you feel that you can manage the extra in MF fees each year and slightly higher initial cost, is to look for a slight larger contract that you can lowball. For example, a 100-point contract at $120/point is $12,000. But a 125-point contract at $98/point is only $12,250. Even if you got a 150-point contract at $90/point, you're only looking at $1500 more on the purchase price, and then you get 150 points instead of 100.