Is this the first DC points resale listing on ebay?

[windje2000]

All,

It looks like I'm going to be outbid -- someone else has come in that pushed my bid up to $510. I'm still high bidder, but I don't expect that to last for long.

Some thoughts on buying resale points:

1) I don't think its a functional problem that these things can't access the Exchange Inventory. I have (rented) legacy points for that, and it's really no different from what Trust Point users are reporting. I would just have to book Day 1 and Day 2 with my resale Trust Points, and then Day 3-7 with legacy points
2) At my high bid price ($1,000) I think it is inconceivable that Marriott would not ROFR the points. I think it would be disastrous for them to let it go at that price.
3) If I did get them for $1,000, I believe that I would be able to pay an additional $2,000 to get Initiated, so my basis for 1,500 Trust Points is $3,000.
4) At that point, I would have points with Base Plus access, but not Special Benefits
5) At this point in time, I don't really value Special Benefits. The only thing that would bum me out is if Ritz Carlton ultimately came into DClub, but came in as a Special Benefit. And if it does, I'm totally blocked anyway because I have no intention of buying 10,000 Trust Points.
6) The obvious risk of course is that they won't let me Initiate my cheapo Trust Points. In which case I'm limited to 60-day ressies. If that occurs, I am probably limited to the Properties that are deep in the Trust (Ko Olina, MOC, Timber Lodge, NCV). I could tolerate that, but it would be inconvenient and require creativity to get my desired reservations -- but I think this is a modest risk of occuring and do not expect it would happen.

So.....it's an interesting experiment. I never thought I'd be winning bidder at $203.50, and I don't expect to get it for $1,000. But we will see!

I'll keep TUGgers apprised of the process if I actually end up with the things.

Best,

Greg

You may want to take another look at this old post LINK

 

[GregT]

You may want to take another look at this old post LINK

Yes, I agree - there is risk here, hence my low bid.

Somebody has to figure it out though, and I think my chances of maximizing it are as good as anybody's? I would welcome the opportunity - wish me luck!

Best,

Greg

 

[windje2000]

Yes, I agree - there is risk here, hence my low bid.

Somebody has to figure it out though, and I think my chances of maximizing it are as good as anybody's? I would welcome the opportunity - wish me luck!

Best,

Greg

Rootin for you

 

[SueDonJ]

Yes, I agree - there is risk here, hence my low bid.

Somebody has to figure it out though, and I think my chances of maximizing it are as good as anybody's? I would welcome the opportunity - wish me luck!

Best,

Greg

Wow, I'm really surprised you (or anyone) would take a risk on resale DC Points. What will you do if you're the high bidder, Marriott doesn't exercise ROFR, you have to pay the ROFR waiver and transfer fees, and your usage is as extremely limited as the governing docs make it appear it will be? True, your initial outlay might be worth the experiment, but with the $600 annual MF (1,500 x .40c) you're putting a lot more on the line. And to get out from under, won't you have to convince someone else that there's value in what you'll be selling? I honestly thought when I first saw this thread that Perry might be the only TUG-connected person who might use this resale as an experiment.

 

[mkahanek]

I am still curious. Why would someone already be selling these points after at most a year of ownership? Didn't they just lose their shirt?

 

[SueDonJ]

I am still curious. Why would someone already be selling these points after at most a year of ownership? Didn't they just lose their shirt?

Probably. But sometimes life happens and your finances change so much that routine travel and annual MF become luxuries that you can't afford. Maybe a year ago the owner had a solid marriage and a good job with a nice paycheck, but now one or all of those things is gone?

 

[mkahanek]

Probably. But sometimes life happens and your finances change so much that routine travel and annual MF become luxuries that you can't afford. Maybe a year ago the owner had a solid marriage and a good job with a nice paycheck, but now one or all of those things is gone?

Wow. I guess. I just figured in that time frame there had to be some hint of instability that would have scared said person away from the purchase. But who knows.

 

[dioxide45]

I wonder if Marriott will treat resale buyers of trust points differently if they are already enrolled in the DC program or are brand new buyers?

The problem is that they have to have encumbrances on the points. They can't be enrolled in the DC program. Marriott mentioned this restriction in an SEC filing. My guess is that they can't just change that policy without making that that change known.

 

[dioxide45]

I do hope that a Tugger is the winning bidder, though it won't be me. The only way we will be able to truly tell how Marriott will handle these is from first hand experience by someone who shares those details.

 

[dioxide45]

I honestly thought when I first saw this thread that Perry might be the only TUG-connected person who might use this resale as an experiment.

Maybe he is experimenting also, but if he is, he can't post about it.

Looks like Greg was outbid.

My initial estimate a while ago were that these points wouldn't sell for any more than $1 a point. Looks like they could beat that estimate.

 

[GregT]

Maybe he is experimenting also, but if he is, he can't post about it.

Looks like Greg was outbid.

My initial estimate a while ago were that these points wouldn't sell for any more than $1 a point. Looks like they could beat that estimate.

Dioxide,

Indeed it will be interesting to see where this goes. I suppose its good for Marriott that this thing isn't going to sell for $1 (like Wyndham points) but Marriott still has to prove that there is a reasonable path forward to having these points be transferred and useable.

As with RBERR, I've made contact with the broker and at least I can track the process from the sidelines, if not as the active purchaser. Perhaps we'll learn enough from the broker on how easily the transfer occurred, and if full rights transferred too.

Best to all,

Greg

 

[dioxide45]

Funny, I predicted it would be about a year for these points to start appearing on the re-sale market and was pooh-poohed. Now here they are.

I fully expected points to become available for resale; however I didn't expect them to be listed on EBay first. I would have expected sellers to first try listing on places like TUG, Redweek or My Resort Network. People usually don't realize that what they purchased is now worth so little, so they list them on these sites for unrealistic prices.

I wouldn't have figured someone was desperate enough only one year in to go the EBay route. Uninformed sellers usually sell for bargain basement prices once they have realized what they own is not worth anywhere close to what they paid the developer. This sometimes takes years of listing it for unrealistic prices.

 

[dioxide45]

The smallest package is 250 points so would you own at one or six resorts or somewhere in between? Where can you stay if you own six resorts of 250 points each?
.

While a BI (Beneficial Interest) is equal to 250 points. The smallest package of points that Marriott sold was for four BIs, 1000 trust points. I doubt they allow individual BIs to be deeded out.

They could have easily made a BI 1000 or 2500 points. Not sure how they landed on 250 points, or why they even need BIs in the first place.

 

[m61376]

Greg- My impression is the seller doesn't know any more than we do. I got the same blanket response to my initial inquiry, and when I copied and pasted the excerpt from Marriott's regulations and asked for further information I didn't receive a response as to how usage rights would transfer. I'm guessing he is as confused as the rest of us.

I applaud you for considering taking the plunge. Ultimately, it might be a great deal for the buyer, as everyone tries to navigate through the system. I am not even sure Marriott knows what to do with resale points. But, for the same reasons Sue pointed out, I'm too conservative to be the one to take that chance, because ultimately it might mean being saddled with a $600 yearly outlay or choosing to pass along an albatross to someone else.

And, who knows, btw, if Perry isn't the high bidder there? It would be a perk for him to be the one to figure it all out....

 

[windje2000]

Greg- My impression is the seller doesn't know any more than we do. I got the same blanket response to my initial inquiry, and when I copied and pasted the excerpt from Marriott's regulations and asked for further information I didn't receive a response as to how usage rights would transfer. I'm guessing he is as confused as the rest of us.

I applaud you for considering taking the plunge. Ultimately, it might be a great deal for the buyer, as everyone tries to navigate through the system. I am not even sure Marriott knows what to do with resale points. But, for the same reasons Sue pointed out, I'm too conservative to be the one to take that chance, because ultimately it might mean being saddled with a $600 yearly outlay or choosing to pass along an albatross to someone else.

And, who knows, btw, if Perry isn't the high bidder there? It would be a perk for him to be the one to figure it all out....

Here's hoping the ultimate buyer understands what is being offered for sale. An uninformed buyer reading that ebay ad copy certainly would not be aware of the limitations on use many believe are associated with resale points.

If an uninformed buyer wins, the selling price will not reflect the true attributes of the product.

One would think the broker would have modified the ad copy to state points usage can only occur consistent with the Marriott rules and regs, especially after being put on notice by TUGGERS that there are many open questions as to what that usage might be.

Should be an interesting auction.

 

[kds4]

I have to question how this will even be possible for the seller to complete as a transaction. We specifically questioned our representative at the Orlando Sales Center back in April during our DC points presentation when we decided to enroll our week about what resale options any owner who purchased points would have.

We were specifically told that points cannot be resold (ie. Marriott would not recognize a resale of points). We were told they could be transferred via an estate (death of the owner), but that was the only way Marriott would change the ownership. "While you can rent points from another owner, the only place you can buy them is from Marriott directly."

If that is still true, Marriott won't even have to ROFR (and pay the owner/seller anything). They will just refuse the transaction altogether. The only way the owner/seller can get out of the maintenance fees will be to quit paying and let Marriott 'repossess' them.

This will be an interesting test case of that approach. We knew it would come eventually.

 

[GregT]

All,

I've had some contact with Judi Kozlowski, who is a well-respected broker on the HGVC board. I bought my HGVC through her, and I'm now on her email list of new listings.

In her last email blast, she indicated that she is now approved to be a resale broker for Marriott. I followed up with her and posed some questions.

She indicated that Marriott is actively working on their resale program and she believed it was close to introduction. She indicated there was a July 25 conference call scheduled for the authorized brokers where a number of the open questions should be addressed. She cautioned that it is possible that there could be further delays in the formal introduction, and she encouraged me to contact her after July 25 to see if she could answer some of my questions. She also confirmed that Marriott is exercising ROFR selectively, which is consistent with what we've heard before, but just haven't seen much of on TUG. She also confirmed that Hilton is ROFRing extremely aggressively.

So, we should know more after the 25th, and I'll post what I learn!

BTW, despite my inquiries to Judi and my low-ball bid on eBay, these are more driven by curiousity than a desire to own Trust Points. I'm very happy with the points rental activity that has developed in a short time (thank you TUGgers!) and I continue to believe that legacy points will function well for the near to medium term, and who knows what will happen in the long term.

Best,

Greg

 

[jimf41]

Just ended at $3750. I dropped out at $1150.

 

[dioxide45]

:whoopie: Yahoooo.






Okay, I didn't win (or bid for that matter). I was surprised that it sold for the price that it did. Hopefully we will find out the status of ROFR.

 

[windje2000]

2) At my high bid price ($1,000) I think it is inconceivable that Marriott would not ROFR the points. I think it would be disastrous for them to let it go at that price.

So.....it's an interesting experiment. I never thought I'd be winning bidder at $203.50, and I don't expect to get it for $1,000. But we will see!

Greg - I think you are right about MAR ROFR. Here's why I think Marriott must ROFR these points.

Short answer - to prevent arguments about inventory impairment.

What is the right answer on point value to measure potential impairment of inventory? $10/pt or the newly established ebay price

Suppose you were auditing MAR timeshare. One audit question is carrying value of points inventory. Marriott sells points inventory @ approx $10/pt. Here we have a points resale transaction on ebay which reached a price decidedly less (approx 75%) than $10.

MAR will argue that this is one isolated transaction and they are selling tons of points @ $10.

The ebay price is an 'under the hammer' no reserve auction value, which can only generate an indication of value at or (more likely) below fair market value. (Note that the technical definition of fair market value assumes no compulsion to act on either the buyer or seller. A no reserve auction by definition doesn't meet that criterion - the property is sold for whatever the highest bid is when the auction ends.)

The auditor might say sure, but that $10 includes access to the exchange company, an intangible asset. The ebay price is measuring the just property rights in the trust -- exclusive of the value of that intangible asset. That's a much more direct indication of the property value in the trust than the tons of points sales (which include the access to the exchange company intangible) and have a huge overlay of selling expense.

MAR will come back to the auditor and say - look, we're selling access to the exchange company to our legacy owners for as little as $500. In addition here's what it costs anyone to join II or RCI. (Note that the Dclub initiation fee excludes present value of the skim, which for a legacy is a ongoing and perpetual cost of access.)

No way access to the exchange company is worth the price difference between a $10 sale in due course of our ordinary business and an auction value of around $2 on ebay. (Note that a primary motivator for many to join is the bundled fee and savings which currently can be obtained.)

So what's the correct answer? -- There isn't one. At least one and probably both of these price points are wrong.

But here's the real motivator for MAR. If MAR doesn't exercise ROFR, how will they explain the fact that they didn't to the auditors. Not exercising would be an action consistent with the view that the underlying property value of points is far less than $10. Not a good position to defend to the auditors.

MAR is absolutely compelled to exercise ROFR. Exercising ROFR would be entirely consistent with the notion that the points are worth what they are selling for ($10) which is much more than the ebay high bid.

We all should remember that Marriott took a $0.75 B write off on inventory. No way they want to go down or even near that road again. That was probably the issue that put the spin-off transaction on the front burner.

The best course of action for Marriott is to simply stay away from arguing about the import of points sales prices in venues other than developer sales and exercise ROFR.

 

[RBERR1]

Greg - I think you are right about MAR ROFR. Here's why I think Marriott must ROFR these points.

Short answer - to prevent arguments about inventory impairment.

What is the right answer on point value to measure potential impairment of inventory? $10/pt or the newly established ebay price

Suppose you were auditing MAR timeshare. One audit question is carrying value of points inventory. Marriott sells points inventory @ approx $10/pt. Here we have a points resale transaction on ebay which reached a price decidedly less (approx 75%) than $10.

MAR will argue that this is one isolated transaction and they are selling tons of points @ $10.

The ebay price is an 'under the hammer' no reserve auction value, which can only generate an indication of value at or (more likely) below fair market value. (Note that the technical definition of fair market value assumes no compulsion to act on either the buyer or seller. A no reserve auction by definition doesn't meet that criterion - the property is sold for whatever the highest bid is when the auction ends.)

The auditor might say sure, but that $10 includes access to the exchange company, an intangible asset. The ebay price is measuring the just property rights in the trust -- exclusive of the value of that intangible asset. That's a much more direct indication of the property value in the trust than the tons of points sales (which include the access to the exchange company intangible) and have a huge overlay of selling expense.

MAR will come back to the auditor and say - look, we're selling access to the exchange company to our legacy owners for as little as $500. In addition here's what it costs anyone to join II or RCI. (Note that the Dclub initiation fee excludes present value of the skim, which for a legacy is a ongoing and perpetual cost of access.)

No way access to the exchange company is worth the price difference between a $10 sale in due course of our ordinary business and an auction value of around $2 on ebay. (Note that a primary motivator for many to join is the bundled fee and savings which currently can be obtained.)

So what's the correct answer? -- There isn't one. At least one and probably both of these price points are wrong.

But here's the real motivator for MAR. If MAR doesn't exercise ROFR, how will they explain the fact that they didn't to the auditors. Not exercising would be an action consistent with the view that the underlying property value of points is far less than $10. Not a good position to defend to the auditors.

MAR is absolutely compelled to exercise ROFR. Exercising ROFR would be entirely consistent with the notion that the points are worth what they are selling for ($10) which is much more than the ebay high bid.

We all should remember that Marriott took a $0.75 B write off on inventory. No way they want to go down or even near that road again. That was probably the issue that put the spin-off transaction on the front burner.

The best course of action for Marriott is to simply stay away from arguing about the import of points sales prices in venues other than developer sales and exercise ROFR.

As a former auditor, I agree completely. My first question would have been why did you not ROFR this transaction if they are not imparied?

I am sure part of the reason a lot of the weeks transactions did not get ROFR because MAR has already written whatever weeks they owned down far enough that the e-bay transactions would not be materially different than the carrying value therefore would not create an additional impairment problem.

If points are sold for even $8/pt resale and they did not ROFR them then all of the arguments about the stuff that resale does not get might past muster but at $2-3/pt. Not a chance. They might be able to use the one transaction argument but the real risk for MAR now is that this is the only the first transaction (at least that we know about) and a whole bunch start occuring. It may depend on the number of transactions that occur before year-end. If this starts a trend and establishes a "market price" of $2-3/pt based on a series of transactions, then MAR may have an impairment problem.

Easiest way for avoid this whole thing is to ROFR them and go out and sell the same pts for $10/pt.

 

[vail]

What happens if I enroll my week for points---I think I read where I could trade my unit for points? and I now try to sell the points assuming Marriott willexercise ROFR.
I can take a unit that I basically will not get muc for but turn it in to points and have Marriott pick it up?
I am sure they are in the business of selling points---not purchasing points?

Also when they do trade points for weeeks--what do they do with all those weeks no one wants?

 

[Asia2000]

What happens if I enroll my week for points---I think I read where I could trade my unit for points? and I now try to sell the points assuming Marriott willexercise ROFR.
I can take a unit that I basically will not get muc for but turn it in to points and have Marriott pick it up?
I am sure they are in the business of selling points---not purchasing points?

Also when they do trade points for weeeks--what do they do with all those weeks no one wants?

1. Marriott will give fewer points for your week than the number of points required to stay for the same week (majority of the time). Many people call this "skim". Perhaps the single most upsetting variable of the whole program.

2. When ROFR happens, the seller will receive the price of the contract. No bonus money given by Marriott. 1500 points just sold for $3750. Bad deal. If Marriott exercises ROFR, then the seller will receive $3750.
Also, if you enroll your week, you would be selling your week as a week, not points. Point programs can only be sold if you bought "pure" points from Marriott (not a week that was converted to points).

3. Point values for the dud weeks are low. Two sets or buckets of weeks. Point users and Week owners. There are always unused weeks in the off season. Marriott or II will discount them to attempt usage.

 

[windje2000]

What happens if I enroll my week for points---I think I read where I could trade my unit for points? and I now try to sell the points assuming Marriott willexercise ROFR.
I can take a unit that I basically will not get muc for but turn it in to points and have Marriott pick it up?
I am sure they are in the business of selling points---not purchasing points?

Also when they do trade points for weeeks--what do they do with all those weeks no one wants?

You can 'trade' your enrolled unit for points to use annually. You could also rent out those points

You cannot 'trade' your enrolled unit for points representing ownership in the trust which would be subject to ROFR if you tried to sell them.

 

[kds4]

Greg - I think you are right about MAR ROFR. Here's why I think Marriott must ROFR these points.

I have to disagree that Marriott has to ROFR (as we traditionally think of ROFR). I took the following from Page 3, Section VI of the Marriott Ownership Resorts Inc. (MORI) disclosures guide at https://www.my-vacationclub.com/common/vc/en-us/pdfs/enrollment_legal_docs/disclosure_guide.pdf

"If the purchase of an Interest is not made from an Approved Broker, then the owner of such Interest(s) may not be entitled to Exchange Benefits in Exchange Company’s sole and absolute discretion, even if the initiation fee is paid. Additional payments may be required to access the Exchange Benefits."

So, it seems that MORI can refuse to grant buyer trading privileges with their newly purchased points? MORI can demand additional monies from the buyer to be able to exercise their newly purchased points? I'm not sure that sellers don't have an obligation to disclose these potential encumbrances on their points if they choose to attempt to sell them directly, or that if the seller doesn't disclose, they risk liability to their buyers.