DC Resale Points (Junk) Transfer Fee Hiked To $500 Per BI

[kds4]

The headline says it all. I just received the email below a few minutes ago.

"Dear XXX Realty employees and Points Customers,

I wanted to update you on a very sad change MVCI made to intentionally restrict the sale of points in the resale market. A customer had brought to my attention today that Marriott kept quoting him a transfer fee of $500 per interest instead of the traditional fee of $200 per interest.

I contacted the Licensed Timeshare Resale Brokers Association which we are part of and one of the agents emailed [Deleted.] MVCI resales department, to get the correct answer.

He responded saying that as of June 17th, Marriott did indeed increase the transfer fee from $200 to $500 and the minimum transfer fee is now $3,000 instead of $2,000. This is absolutely abusive and unfair to all owners (now and in the future) that we're helping to sell their Marriott points.

Please inform all your points sellers to contact MVCI immediately to complain about this. This is horrible, not only for Points sellers but also for Points Buyers...........great for Marriott.

The LTRBA has a call in with [Deleted.] tomorrow to get clarification on this. We're hoping this is simply a "word of mouth" increase to discourage resales.

Best Regards,

Xxx Licensed Broker/Owner

Xxx Realty

 

[rahulgopi]

I was going back and forth with Marriott, TRCS and agent on this. This will prevent me from buying resale points @ $4. This will also affect sellers who are trying to get rid of points.

 

[KenA]

I was just going to post the same information. I made an offer for a 2500 points package to a broker and he replied by email that it appears this increase has occurred. BUT... it does appear there is a chance it is not true based on the wording.

What is Marriott doing? Going to sell people a product they claim has value and then intentionally make it hard to re-sell.

Even still, it seems that ROFR is about $4.25 per point. Even with the new fees, its still much cheaper than from Marriott. I suspect it will kill some sales though.

I was at $36,000 on the package I bought from Marriott for 3500 points (before rescinding).
If the new fees are true, at $4.25 per point it is about $22,200 give or take.

 

[Saintsfanfl]

It's a Westgate style move that will hurt owners down the road that want out.

All the more reason to stay far away from buying very many points. The more they sell the less value they have. The market will eventually be flooded with points that risk going unused.

 

[icydog]

Mayan all over again. Thousands of $$ to get rid of your timeshare!! Total BS!!!

Is this a bait and switch scheme? No place in our points contract is a clause that says Marriott will make it impossible to sell the point contract. This is just usury. Has Marriott turned into the Mayan Palace? What a horrible turn of events

 

[JIMinNC]

As I posted in another thread where this was mentioned, we were recently told by a Marriott salesperson that Marriott would soon begin doing DC Points resales, just as they currently resell weeks through their resale operation. If true, it is possible the increased initiation fee is designed to make the cost of third-party resale transactions closer to whatever price point Marriott plans to use for resale points. I suspect they would likely routinely waive the fee for points bought from them if and when they start doing point resales, but assess the fees for third party transactions.

 

[SueDonJ]

Am I understanding correctly that this email is coming from a broker and that no TUGgers have official written notice from a Marriott rep? I just want to be clear on where this is coming from.

Earlier today TUGger rahulgopi mentioned that he heard it from a telephone rep (see Buying Resale MVCD points [and Other Marriott Purchase Options].) I thought it was worth pursuing so wrote an email to an exec contact who has on a few occasions provided information to share with TUGgers. I haven't received a reply yet and don't expect to today, but when it comes I'll be sure to ask permission to share it here. In the meantime, please try to limit the discussion about DC Points Resales fees to this thread. Thanks!

 

[kds4]

As I posted in another thread where this was mentioned, we were recently told by a Marriott salesperson that Marriott would soon begin doing DC Points resales, just as they currently resell weeks through their resale operation. If true, it is possible the increased initiation fee is designed to make the cost of third-party resale transactions closer to whatever price point Marriott plans to use for resale points. I suspect they would likely routinely waive the fee for points bought from them if and when they start doing point resales, but assess the fees for third party transactions.

I cannot see how Marriott will make points resales work for them in a way that doesn't undermine their 'new' points sale operations. Who would buy 'new' points for $12.xxx if they can buy 'Certified Pre-Owned' points for $7 or $8 from MVCI?

The only scenario I can see t hat would limit the impact on the new sales operation is if you have to be a current owner of 'x,xxx' trust points to be able to buy 'additional resale points' from MVCI. Of course that will restrict their potential buyer pool.

 

[SueDonJ]

As far as the rumors that Marriott will "soon" begin an internal DC Points resale operation, it may well be happening soon and if this price increase thing is real, it could be related. But that's a rumor that's been floating around since almost the day the DC was implemented. Not trying to say anything here except that Internal Points Resales are not a new rumor.

 

[kds4]

Am I understanding correctly that this email is coming from a broker and that no TUGgers have official written notice from a Marriott rep? I just want to be clear on where this is coming from.

Earlier today TUGger rahulgopi mentioned that he heard it from a telephone rep (see Buying Resale MVCD points [and Other Marriott Purchase Options].) I thought it was worth pursuing so wrote an email to an exec contact who has on a few occasions provided information to share with TUGgers. I haven't received a reply yet and don't expect to today, but when it comes I'll be sure to ask permission to share it here. In the meantime, please try to limit the discussion about DC Points Resales fees to this thread. Thanks!

Hi Sue,

You are correct that a broker sent the email to me, and the rest of his points clients, this afternoon. Besides myself, this broker has worked with other TUGgers in handling their resale points purchases and has been spoken of positively in various posts. Until proven otherwise, I am confident in taking what I have received from him at face value. As his email points out, the professional association is working to get the Marriott Exec this information allegedly came from on a conference call to formally discuss this 'news' tomorrow. I expect to hear more once that has occurred, and will relay whatever the broker conveys to me with his consent for the information of all. I truly hope it turns out to be misinformation. However, if it does not, I don't believe the fault will lie with the messenger (broker).

 

[KenA]

In my opinion, it would not be a resale program, but a "buyback" program. If Marriott can attract those who want to sell their points with an easy out, then Marriott can then resell those points during their presentations at full retail. The increase (if its true) in the transfer fees will make their offers more attractive to sellers, thereby giving them the ability to buy more points back directly without having to deal with the ROFR.

I can't see any scenario where Marriott has resale points cheaper than what they offer during their presentation. Why would anyone buy points at retail then?

I certainly hope we can get some confirmation soon as to whether or not this rumor of the price increase is true.

 

[SueDonJ]

Hi Sue,

You are correct that a broker sent the email to me, and the rest of his points clients, this afternoon. Besides myself, this broker has worked with other TUGgers in handling their resale points purchases and has been spoken of positively in various posts. Until proven otherwise, I am confident in taking what I have received from him at face value. As his email points out, the professional association is working to get the Marriott Exec this information allegedly came from on a conference call to formally discuss this 'news' tomorrow. I expect to hear more once that has occurred, and will relay whatever the broker conveys to me with his consent for the information of all. I truly hope it turns out to be misinformation. However, if it does not, I don't believe the fault will lie with the messenger (broker).

Thanks! I'm not looking to find fault anywhere, just for official confirmation. I also hope it's not true; it certainly reduces the attraction of resold Trust Points.

 

[kds4]

I also received the following this evening with a request to share on TUG from the same broker:

"Post this on TUG also. This was my response in an email to the LTRBA group upon hearing of these changes:

Since Marriott doesn't offer a resale option for their owners, let's discuss how this impacts them:

Points will now decrease from $4.50 on average in the resale market to about $2 per point.
Sellers will be netting drastically lower amounts.
Sellers will no longer want to list their timeshares
Buyers will no longer wish to buy resale points
Sellers will probably have to eat half the closing costs
Marriott points sales will drive up internally
Marriott gets super rich from this
A class action lawsuit from owners will most likely be on the horizon."

 

[JIMinNC]

I cannot see how Marriott will make points resales work for them in a way that doesn't undermine their 'new' points sale operations. Who would buy 'new' points for $12.xxx if they can buy 'Certified Pre-Owned' points for $7 or $8 from MVCI?

Valid point, although prior to the transition to Destination Club, Marriott ran their weeks resales operation in parallel with their "new" weeks sales operations for many years. Much the same argument could have been made then - who would buy a "new" developer week when they could buy a pre-owned week at somewhat less cost from MVCI Resales. I don't recall how the "New Marriott Week" prices compared to the "Pre-Owned Marriott Week" prices back then, but that relative differential might yield some insight into what level Marriott Points resales might be at if and when they ever do start doing that.

I think the reason they were successful running parallel "New" and "Pre-Owned" weeks operations is they promote and market the "New" operation but the resales operate somewhat in the shadows and it seems you have to know about them and seek them out. One delivery channel for educated buyers and one for everyone else.

 

[dioxide45]

This change would have to be placed in an amended/updated Exchange Procedures. The Exchange Procedures on the MVCI website when you attempt to enroll is dated 12.18.13 and still indicates the $200/BI with $2000 minimum. There is no updated Exchange Procedures with a date on or around June 17.

I am not saying that this isn't or didn't happen. Just no official verification yet.

 

[SueDonJ]

Valid point, although prior to the transition to Destination Club, Marriott ran their weeks resales operation in parallel with their "new" weeks sales operations for many years. Much the same argument could have been made then - who would buy a "new" developer week when they could buy a pre-owned week at somewhat less cost from MVCI Resales. I don't recall how the "New Marriott Week" prices compared to the "Pre-Owned Marriott Week" prices back then, but that relative differential might yield some insight into what level Marriott Points resales might be at if and when they ever do start doing that.

I think the reason they were successful running parallel "New" and "Pre-Owned" weeks operations is they promote and market the "New" operation but the resales operate somewhat in the shadows and it seems you have to know about them and seek them out. One delivery channel for educated buyers and one for everyone else.

Another reason is that the Resales Operations had inventory that was from formerly sold-out resorts, that the onsite and corporate Sales Offices did not actively promote. In my experience of buying a direct resale, it cost the equivalent of full direct pricing at the time and has always had all the ownership/usage rights of a developer-direct purchase.

Of course this isn't relevant to Points resales because there is no home resort or specific unit type/view advantages with Points. Just mentioning it in the context of why/how developer-direct and internal resales of Weeks could co-exist.

 

[dioxide45]

I also received the following this evening with a request to share on TUG from the same broker:

"Post this on TUG also. This was my response in an email to the LTRBA group upon hearing of these changes:

Since Marriott doesn't offer a resale option for their owners, let's discuss how this impacts them:

Points will now decrease from $4.50 on average in the resale market to about $2 per point.
Sellers will be netting drastically lower amounts.
Sellers will no longer want to list their timeshares
Buyers will no longer wish to buy resale points
Sellers will probably have to eat half the closing costs
Marriott points sales will drive up internally
Marriott gets super rich from this
A class action lawsuit from owners will most likely be on the horizon."

These were my thoughts. By increasing the fees, they are driving down the resale price per point. This allows MVCI to acquire points cheaper through ROFR since they are not concerned about the initiation fees.

As to a resale points program. I don't see MVCI ever doing that. They may offer a buyback program, but I don't see them endorsing cheaper points on the resale market since in DC a point is a point.

 

[rahulgopi]

I had two conversations with Marriott Sales rep and her Manager, both of them were very clear about the Junk / Initiation price increase. I went via the closing company and agents association to see if we can get more information. I really hope this is not true as this will diminish my chance of getting into the Destinations Club program.
True, I can buy from developer via COMBO at a good price BUT if the resale market is tarnished, I will have a hard time getting out, if required.

 

[dioxide45]

I had two conversations with Marriott Sales rep and her Manager, both of them were very clear about the Junk / Initiation price increase. I went via the closing company and agents association to see if we can get more information. I really hope this is not true as this will diminish my chance of getting into the Destinations Club program.
True, I can buy from developer via COMBO at a good price BUT if the resale market is tarnished, I will have a hard time getting out, if required.

It won't necessarily make it more expensive to get in, just start reducing your offers based on the higher fees. In the end, people will take all fees in to account when they determine how much they want to pay. They won't pay more out of pocket just because of the junk fees. Of course it may make the points more likely to be bought back by MVCI via ROFR.

 

[JIMinNC]

This change would have to be placed in an amended/updated Exchange Procedures. The Exchange Procedures on the MVCI website when you attempt to enroll is dated 12.18.13 and still indicates the $200/BI with $2000 maximum. There is no updated Exchange Procedures with a date on or around June 17.

I am not saying that this isn't or didn't happen. Just no official verification yet.

As I read the Exchange Procedures document we received a couple weeks ago with our combo purchase (It is the one dated 12-18-13), it sounds like they can increase the fee without modifying the document. Here is the relevant wording, bolding is mine:

The current initiation fee is $200 per Interest with a $2,000 minimum initiation fee; however, Exchange Company reserves the right to adjust the amount of the initiation fee from time to time and to waive the initiation fee on a case-by-case basis in Exchange Company's sole discretion.

I am not an attorney, but as I read that, they have the flexibility to change the amount without amending the Exchange Procedures.

 

[jeepie]

...$200/BI with $2000 maximum.

Isn't it $2000 minimum?

 

[dioxide45]

Isn't it $2000 minimum?

Correct, I updated my post.

 

[dioxide45]

As I read the Exchange Procedures document we received a couple weeks ago with our combo purchase (It is the one dated 12-18-13), it sounds like they can increase the fee without modifying the document. Here is the relevant wording, bolding is mine:

The current initiation fee is $200 per Interest with a $2,000 minimum initiation fee; however, Exchange Company reserves the right to adjust the amount of the initiation fee from time to time and to waive the initiation fee on a case-by-case basis in Exchange Company's sole discretion.

I am not an attorney, but as I read that, they have the flexibility to change the amount without amending the Exchange Procedures.

It is possible, but this is a pretty material change. There have been six versions to date of the Exchange Procedures. Some which I couldn't even tell what the change was. So in four years they change the document 5 times but for this they don't update it? That doesn't make sense. This is the governing document for the Exchange Company. The Initiation Fees allow resale trust points to play in the Exchange Company.

Note that the verbiage doesn't indicate that they can change it without warning or prior written notice. That type of verbiage is often seen in these types of scenarios but is not present here.

Though they could have an updated version, but just haven't published it.

 

[m61376]

I find it surprising that they would devalue any ownership at a tome when they are defending a class action suit from a weeks owner. Whether or not his claim has merit remains to be seen, but it seems that even the appearance that they would be devaluing any MVCI ownership would be something to be avoided now.

It would be hard to argue that more than doubling the transfer fee doesn't effectively devalue any points previously purchased, since it. Directly impacts the resale value of any such points.

 

[Saintsfanfl]

It's genius of Marriott to do this in order to lower the average expense of the ROFR exercise but it should make it illegal. If this is true they are simply manipulating the resale value to manipulate their expense on ROFR. That is most definitely not legal and should be challenged.

They will never sell "resale" points. The entire notion is absurd. When the salespeople original referenced controlling the resale market this supposed act is exactly what they were talking about. I know I was told this in a presentation although I did not believe Marriott would or could take these measures legally.

I'm not sure why I am surprised considering it was already $200 per BI. Why not make it $2,000 per? What is stopping them?