Dec uy and annual fees

[Duck1]

I'm looking at resales with dec uy. If the contract has the full points for 2017 is it typically expected that the buyer will pay full fees for the year? I appreciate everything is negotiable but in my mind I wouldn't be inclined to agree to pay the 2017 fees as I wouldn't take a trip until 2018. I know that theoretically I could use the points in December of this year but assuming I reached a deal, by the time everything was in place etc there would not be anything left to book. But I'm new to this and perhaps I'm overlooking something. Thanks in advance for any assistance!

 

[amccu18007]

I think that you may be confusing annual dues and use year. Use year is when your points hit your account, annual dues are due in January regardless of when your use year hits. Just because you have a DEC use year, it doesn't mean the trip will fall in 2017. It means that you have from Dec to July 31 to bank your points.

 

[Duck1]

Thank you for the reply. The seller in the contract I'm negotiating with wants credit for 2017 dues which I thought was odd and that's why I posted the question as I thought that perhaps I'm missing something

 

[amccu18007]

That would be typical. If you have use of the points as the buyer then the MF's tend to be paid for by the buyer. If the seller used the points already, they usually offer a purchase credit for points used. Dec UY points haven't yet been loaded so this Dec 2017, your 2017 points should be added.

 

[TexasChick123]

I'm looking at resales with dec uy. If the contract has the full points for 2017 is it typically expected that the buyer will pay full fees for the year? I appreciate everything is negotiable but in my mind I wouldn't be inclined to agree to pay the 2017 fees as I wouldn't take a trip until 2018. I know that theoretically I could use the points in December of this year but assuming I reached a deal, by the time everything was in place etc there would not be anything left to book. But I'm new to this and perhaps I'm overlooking something. Thanks in advance for any assistance!

Oh goodness. Here I go...like someone said before the maintenance fees (MF's) follow the calendar year, and the points are loaded according to UY. Most buyers want you to pay the 2017 dues if you are getting the points at any point in 2017. My reasoning has been that since you don't get them until December of 2017, the seller should pay 11/12 of the fees because the Dec 2016 points were allotted for 11 months of 2017. The 2017 dues are really from January 2017-December 2017, so I never thought I should be paying for that person's points before my new ones kicked in. This is not the generally accepted method however. Generally, if there are points coming on with the number 2017 behind them, then the seller will want you to pay all of the 2017 dues even though you only had your points for one month in 2017, and they had their Dec 2016 points for 11 months. If you can get the contract at a great deal, then paying MF's is fine. However, I wasn't willing to budge when I thought the price per point was in the middle range. Same would be true for June points where I think I should pay 7/12 of dues and them pay for 5/12. Sellers won't agree, and that isn't the standard practice, but there you have it.

 

[sndral]

I believe when DVC sells direct they pro rate the dues - so if you buy a Dec. use year & close by the end of June you'd pay for 6 mo.s worth of MFs (50%.) You'd get 2016 points immediately and 2017 points on 12/1/17.
Brokers don't handle it that way and the norm seems to be to ask for MFs on 2017 points irrespective of use year.
Everything is negotiable, so you can say my offer is seller pays MFs & see if they accept. Or you can say - ok I'll pay MFs but my price per point is lower. Or you can offer to split MFs or agree to pay MFs and ask sellers to pay closing costs - it's all negotiable.
Some owners pay their MFs monthly instead of one lump sum at the beginning of the year.

 

[TexasChick123]

I just wanted to add that every broker, and I mean EVERY SINGLE ONE that I talked with has said that DVD is snapping up most of the contracts via ROFR when you have the seller pay MF's on points you're getting AND having the seller pay closing costs (i.e. contract comes with full 2017 points but seller pays 2017 dues and closing...yes, I actually got a seller to agree to do this, but DVD took it ). DVD takes the total amount they would have to pay for the contract which includes contract price, MF's, and closing costs into account when deciding which ones to buy back as well as a myriad of other mysterious factors. It really stinks because you spend all this time negotiating things like this, and then they take them. Trust me, I would know! I'm not saying don't go for it if you are getting say 2016 points in a Dec UY contract and tell the seller you will not reimburse for the 2017 dues, but DVD is taking a lot of those through ROFR. However, don't overpay to get it to pass. Look at the ROFR thread where some go higher, and they still get taken when others pass for lower amounts. It's complete craziness.

 

[DougEMG]

All things are negotiable. Just figure out what your total costs are going to be which includes price/point + any closing + any MF and determine if you are fine with that. There are basically 3 buckets for costs and which bucket it is in doesn't matter. If you don't like paying the MF, offer lower price/point or to split closing.

 

[Duck1]

Thanks for all the advice! I think I have a better understanding of the issue now. Very much appreciated!!

 

[ELMC]

Oh goodness. Here I go...like someone said before the maintenance fees (MF's) follow the calendar year, and the points are loaded according to UY. Most buyers want you to pay the 2017 dues if you are getting the points at any point in 2017. My reasoning has been that since you don't get them until December of 2017, the seller should pay 11/12 of the fees because the Dec 2016 points were allotted for 11 months of 2017. The 2017 dues are really from January 2017-December 2017, so I never thought I should be paying for that person's points before my new ones kicked in. This is not the generally accepted method however. Generally, if there are points coming on with the number 2017 behind them, then the seller will want you to pay all of the 2017 dues even though you only had your points for one month in 2017, and they had their Dec 2016 points for 11 months. If you can get the contract at a great deal, then paying MF's is fine. However, I wasn't willing to budge when I thought the price per point was in the middle range. Same would be true for June points where I think I should pay 7/12 of dues and them pay for 5/12. Sellers won't agree, and that isn't the standard practice, but there you have it.

This is exactly right. However, many brokers have a policy "you get the points, you pay the dues". I've been told that verbatim from several different brokers. I understand why they do this as it is much cleaner, but that doesn't make it mathematically correct. That being said, I agree with those who say that everything is negotiable. But at the same time you should know that you will be "competing" for contracts with buyers who will reimburse the maintenance fees without a second thought. So really you have to decide how badly you want the contract and how much extra you are willing to pay for it.

Doug is correct, though, it doesn't really matter to you how you frame your offer once you have figured out the total dollar amount you want to spend. Offering "split" closing and "split" maintenance fees comes across as more friendly and less adversarial, so it's probably a good idea to divide up your offer like that with and take a few dollars off per point. A request that a seller pays the maintenance fees can be viewed as offputting or adversarial, especially with brokers repeating that mantra over and over. It's actually more money in the seller's pocket if you frame it as a lower price per point and you pay the maintenance fees because sales price is commissionable but maintenance fee reimbursement isn't.

 

[Dean]

I'm looking at resales with dec uy. If the contract has the full points for 2017 is it typically expected that the buyer will pay full fees for the year? I appreciate everything is negotiable but in my mind I wouldn't be inclined to agree to pay the 2017 fees as I wouldn't take a trip until 2018. I know that theoretically I could use the points in December of this year but assuming I reached a deal, by the time everything was in place etc there would not be anything left to book. But I'm new to this and perhaps I'm overlooking something. Thanks in advance for any assistance!

While it is negotiable, fees are paid on a calendar year basis. That means i you got Dec, 17 points and reimbursed the fees, you're paying fees on 11 months of the 2016points you didn't have. If you got the 2016 points AND the 2017 points you'd be getting a free one month of fees. The "you get the points, you pay the fees" is simply incorrect and unfortunately it's perpetuated by the brokers. The nicest thing to say is they're simply misinformed on DVC and it goes downhill from there.

 

[Duck1]

That is very helpful. Thanks to both of you! I had not even considered structuring the offer so as to lower the commission. Thanks again!

 

[Dean]

That is very helpful. Thanks to both of you! I had not even considered structuring the offer so as to lower the commission. Thanks again!

While technically this is all negotiable, realistically most brokers hold the "you get the points you pay the dues" philosophy and thus they'll push for that. The main advantage of knowing the info is to compare between contract and to evaluate the overall feasibility of a given contract. While I've been successful in the past educating brokers on this item and thus paying the correct dues similar to if I'd been buying retail, any broker who's set in their ways is unlikely to change quickly if at all.