MVCI points purchase via the secondary market

[kds4]

The way you describe this transaction, it sounds like this may have been a direct purchase from a seller rather than a transaction through a broker who might play games with folding upfront fees or closing costs into the price submitted to ROFR. Is that true? If so, then the $3.30 would appear to be an all-in, "real" price that passed ROFR rather than one of the ones where Marriott saw a different price than what the buyer is actually paying out. Or was this through a broker that may have been putting together a creative transaction structure in order to pass?

Also, I think you said your purchase was for 1000 points, so I'm wondering if MVC is more likely to pass at a lower price on these smaller lots, since the cost to close the transaction is the same as a larger batch?

Interesting point about Marriott possibly passing on smaller points purchases based on the closing costs. On the other side of that coin, Marriott is also getting a larger proportion of 'junk' fee income off of a small points purchase they allow to pass ROFR since they get at least the minimum of $3,000 in fees (regardless of the amount of points purchased). That, in combination with the closing costs they would have to pay, may be enough incentive to let smaller points purchases pass at a lower price per point.

 

[kds4]

The broker did not volley between Marriott. It was the actual Seller. Originally the broker said she had a seller and that she would get me a contract. However after 2 days the contract did not come. I asked her where it was and she said the Seller contacted Marriott and received a price where net proceeds were higher. I asked what the Marriott offer was and it was the same price as what I offered. A few days later, she told me the Seller wanted to move forward with me. Maybe the seller wanted to spite Marriott since they were taking a loss on the sale. We will never know.


The transaction was through a broker. We folded the fees all-in and the contracted purchase price was $6800 with the Seller paying all transfer fees and closing costs. The way I had the contract worded, if Marriott exercised their right, they would have to pay the purchase price of $6800. Not $6800 less transfer fees.

I went through this process 2 other times where Marriott exercised. However the way I had the contact worded, on instance they would have to pay the full purchase price. The other instance, they would only have to pay the net price. I still need to follow up with the broker when Marriott Exercised even though they would have to pay the full purchase price to see if the Seller actually received the full purchase price.

Very interesting in that the seller was able to 'fish' an offer out of MVCI based on your interest. Also, very impressive in structuring the contract in a way that (short of a poison pill) would make an exercise of ROFR less appealing to MVCI. Please let us know your findings on whether the seller did ever receive the full purchase price where your contract was still ROFR'd.

 

[kds4]

In my opinion, while your costs were the same as if the ROFR price were $3.30 in a transaction where the buyer pays the transfer fee (I think that is the more typical model), Marriott was essentially passing ROFR at $6.80/pp since that was the contracted "price".

So from your perspective, ROFR was clearly at $3.30/pp, based on the more typical model. But from Marriott's perspective, they were passing on a transaction that would have cost them $6.80/pp. So the question is, what price should be reported on a site like ROFR.net? I can make an argument for either way, I guess - but I lean more toward feeling that sale should be reported at $6.80/pp since that is what Marriott was basing their decision on and would therefore represent a better apples-to-apples comparison with the other entries on ROFR.net - assuming that the purpose of ROFR.net is to be a guide on what price it takes for MVC to pass on ROFR. If someone used the $3.30/pp price to make a more typical buyer pays offer, they would likely be disappointed when the transaction failed. Either way, it points out that in all of the entries on ROFR.net, unless we know who paid the fees/closing costs, the numbers might not be 100% comparable.

Any other thoughts from anyone else?

I agree. My initial response regarding ROFR prices dropping was using the $3.30 perspective. However, as you point out, the real 'valuation' may be entirely different depending on which side of the transaction you are looking at this from - thanks to what appears to be some well constructed contractual language (whch Steven may someday be persuaded to share with other interested potential resale points buyers ...?)

 

[kds4]

Going back to the original question, the points do count toward status. My points posted to my account today and I am now Presidential. Previously I was Executive. I was 775 points short. Added 1000 points to cross the 10000 threshold. I now have 2000 trust points, 4950 from a Ko Olina week, and then 3275 from a Grand Chateau week.

The points I purchased matched my existing anniversary. I specifically looked for a contract where they would match.

Well done and welcome to the club within the club ...

 

[kds4]

MVCI Presidential is a great status level to have. It also gets you Marriott Platinum Elite status, if you aren’t already.

I wonder, how quickly will Marriott reflect the Platinum status update? Does it happen automatically? And will a linked SPG account also automatically update?

When MVCI DC status changes mid year, I assume you just pay any difference the following year when DC dues payment is due (ie. moving from Select to Presidential increases dues)?

As far as status updates, it should happen automatically. However, experiences have varied as to how quickly it posts. Marriott and SPG accounts should be linked, so upon posting the status change to Marriott it should post to your SPG account as well. Don't forget to link your SPG account to Delta Crossover Rewards (similar to how Marriott and United share some reciprocal benefits). SPG Platinum does get some consideration with Delta if you link those accounts. There have been previous posts on TUG regarding the various account linking opportunities as a result of MVC ownership status providing Marriott Rewards Elite status. You should be able to find them with a search.

 

[kds4]

I just found out that my Marriott account has been upgraded to Platinum Elite. However, I didn't find out from Marriott. I found out from SPG through an email that said "You're Platinum with SPG." That prompted me to login to Marriott and there it was. So it looks like 2 days from when Marriott recorded and transferred the points to my account to when it was also reflected on Marriott.com for status.

Excellent. Next stop, Delta Crossover Rewards (via the SPG website).

 

[JIMinNC]

Very interesting in that the seller was able to 'fish' an offer out of MVCI based on your interest. Also, very impressive in structuring the contract in a way that (short of a poison pill) would make an exercise of ROFR less appealing to MVCI. Please let us know your findings on whether the seller did ever receive the full purchase price where your contract was still ROFR'd.

Steven answered that question in the ROFR sticky thread https://tugbbs.com/forums/index.php?threads/rofr-metric-ongoing-rofr-activity.226718/page-22

See posts #544 through #551

 

[kds4]

Steven answered that question in the ROFR sticky thread https://tugbbs.com/forums/index.php?threads/rofr-metric-ongoing-rofr-activity.226718/page-22

See posts #544 through #551

Found it. Thanks for the reference. Very interesting reading.

 

[MadMike3]

Going back to the original question, the points do count toward status. My points posted to my account today and I am now Presidential. Previously I was Executive. I was 775 points short. Added 1000 points to cross the 10000 threshold. I now have 2000 trust points, 4950 from a Ko Olina week, and then 3275 from a Grand Chateau week.

The points I purchased matched my existing anniversary. I specifically looked for a contract where they would match.

Thanks Steve. Were the 1000 points you owned originally purchased from Marriott or on the secondary market?

 

[Steve Arnold]

I just found out that my Marriott account has been upgraded to Platinum Elite. However, I didn't find out from Marriott. I found out from SPG through an email that said "You're Platinum with SPG." That prompted me to login to Marriott and there it was. So it looks like 2 days from when Marriott recorded and transferred the points to my account to when it was also reflected on Marriott.com for status.

Hi Steven,

My ownership I believe is similar to what you had and just wanted to verity your experience since it has been about 6 months since you purchased points via resale market.
I own 3 time share weeks from Marriott in Hawaii and as a legacy owner am also enrolled in the MVCD program so I can exchange them for points - their point exchange comes out to 8125 per use year.

My plan/goal is to purchase 2000 pts in the resale market at about $4 per point and pay the transfer "junk" fee which is now $3 per point so the purchase rate is about $7 per point verses direct from Marriott which is currently $13.96 per point.

We attended a Marriott roadshow today to get their pricing and incentives for comparison.
The sales manager insisted that if I purchase MVCD points from resale market they cannot be used to increase my MVC level from Executive to Presidential.

Your postings and experience goes counter to the salesman statement.
1 - If I understand your experience, your resale purchase of points where added to your MVC account - not kept separate?

2 - The resale points you purchased are classified as direct ownership points and can be combined with your legacy exchange points in any given use year?

3 - The resale points you now own have been combined with your legacy points to determine your MVC status/level?

6 - You have the same use/exchange/banking priviledges for your level as anyone else - no restrictions due to some points being acquired from the resale market?

5 - The MVC benefit for Marriott rewards Elite upgrade was applied promoting you in your case to Marriott Rewards Platinum Elite

6 - Given the legacy ownership and the MVCD point direct ownership via your purchase of points, your points use year is based on an annual basis to coincide with your legacy point conversion usage

or do you need to consider the point usage anniversary of the points that you purchased?

7 - You may not be able to answer this question yet, Since you are now MR Platinum Elite by August 18 - you will be grandfathered as Platinum Premier Elite in the new program?


Anything else I need to be aware of if I am going to purchase resale points as noted here?

 

[Steve Fatula]

Hi Steven,

My ownership I believe is similar to what you had and just wanted to verity your experience since it has been about 6 months since you purchased points via resale market.
I own 3 time share weeks from Marriott in Hawaii and as a legacy owner am also enrolled in the MVCD program so I can exchange them for points - their point exchange comes out to 8125 per use year.

My plan/goal is to purchase 2000 pts in the resale market at about $4 per point and pay the transfer "junk" fee which is now $3 per point so the purchase rate is about $7 per point verses direct from Marriott which is currently $13.96 per point.

We attended a Marriott roadshow today to get their pricing and incentives for comparison.
The sales manager insisted that if I purchase MVCD points from resale market they cannot be used to increase my MVC level from Executive to Presidential.

Your postings and experience goes counter to the salesman statement.
1 - If I understand your experience, your resale purchase of points where added to your MVC account - not kept separate?

2 - The resale points you purchased are classified as direct ownership points and can be combined with your legacy exchange points in any given use year?

3 - The resale points you now own have been combined with your legacy points to determine your MVC status/level?

6 - You have the same use/exchange/banking priviledges for your level as anyone else - no restrictions due to some points being acquired from the resale market?

5 - The MVC benefit for Marriott rewards Elite upgrade was applied promoting you in your case to Marriott Rewards Platinum Elite

6 - Given the legacy ownership and the MVCD point direct ownership via your purchase of points, your points use year is based on an annual basis to coincide with your legacy point conversion usage

or do you need to consider the point usage anniversary of the points that you purchased?

7 - You may not be able to answer this question yet, Since you are now MR Platinum Elite by August 18 - you will be grandfathered as Platinum Premier Elite in the new program?


Anything else I need to be aware of if I am going to purchase resale points as noted here?

I did the same thing right before Steven. I can answer:

1. Resale points added to the same MVC account, as long as the use periods are the same between your points in the MVC account and the resale points. Some points have different use periods. Marriots policy is to make a new account if use periods are different on resale points.

2. The points function identically as other points you may own.

3. It does impact ownership level / status

4. You do have the same privileges

5. The elite upgrade applied including the resale points

6. I answered this in #1

7. No one knows for sure as it has not been announced.

 

[Steve Arnold]

Hi Steve F,

Thanks for answering my questions.
To guarantee that my purchase of resale points are the same use period between existing properties I own and the points that I plan to purchase;

• If I understand use period for my existing week ownership Marriott Properties (legacy owner) belonging to MVCD program it is Jan 1 to December 31 for each each of my properties per statement below.

As an Enrolled Owner, your Use Year begins on January 1 and ends December 31 each year. This is the period of time when you may use your Vacation Club Points for vacations. For example, you may use your 2017 Vacation Club Points for Vacations which occur between January 1 and December 31, 2017.​

• For the points I plan to purchase how do I verify what their use period would be?

Thanks for helping with my lack of knowledge on this subject, but want to make sure I shop and purchase the right thing.

 

[Steve Fatula]

Hi Steve F,

Thanks for answering my questions.
To guarantee that my purchase of resale points are the same use period between existing properties I own and the points that I plan to purchase;

• If I understand use period for my existing week ownership Marriott Properties (legacy owner) belonging to MVCD program it is Jan 1 to December 31 for each each of my properties per statement below.

As an Enrolled Owner, your Use Year begins on January 1 and ends December 31 each year. This is the period of time when you may use your Vacation Club Points for vacations. For example, you may use your 2017 Vacation Club Points for Vacations which occur between January 1 and December 31, 2017.​

• For the points I plan to purchase how do I verify what their use period would be?

Thanks for helping with my lack of knowledge on this subject, but want to make sure I shop and purchase the right thing.

When you close on the purchase, after ROFR, you will be putting your MVCI account # on the paperwork so it goes into your existing account. It appears you have no existing points? If not, then the use period caveat should not matter as far as matching the points. Just purchase resale points with Jan 1 use period start date.

I actually called MVCI for assistance to verify what the agent told me was true, they can verify your information for you to make sure your resale purchase will go into the existing account, in case anything has changed since 2 years ago when I did it. At the time I did it, it was only that the account # was correct, and, the names matched what was on file, and the use period matched.

 

[Fasttr]

• For the points I plan to purchase how do I verify what their use period would be?

The Use Year is spelled out in the deed of the Trust points. The owner should know what their Use Year is, but taking a look at the deed will tell you for sure.

 

[taterhed]

Isn't it funny that you can get such clear answers and guidance on buying---here on TUG?

Too bad the information isn't as 'fair and balanced' when you go to a sales presentation....

 

[Jeffrey]

Just to confirm, the latest formal information is that the Marriott junk fee for resale points is $3/point ?

 

[Fasttr]

Just to confirm, the latest formal information is that the Marriott junk fee for resale points is $3/point ?

Correct.

 

[StevenTing]

Just to confirm, the latest formal information is that the Marriott junk fee for resale points is $3/point ?

The junk fees and the reference can be found in my resale calculator that I created. It is link #2 in my signature. At the bottom I have notes referencing the specific section in the exchange procedures document and will also provide you with estimated closing costs. I will have to update the exchange dues and MF beginning 1/1/2019 to reflect the updated amounts.