New Trade In Program

[dis_hrnichs]

The board sponsor announced a new resale trade in program for DVC contracts. I find it very interesting and can't wait to see how it goes for anyone who tries it in the next few months...

 

[pianomanzano]

Looks like a decent, hassle-free alternative to selling a contract and buying what you want. I think it'd be a better program if all of the listings were eligible, but perhaps they selected contracts that they may own from a previous instant cash offer or other contracts where owners are firm on the price listed? I'd like to hear from the broker, perhaps on the dvc show or other shows they sponsor to learn more details about the logistics of it all.

 

[dis_hrnichs]

Looks like a decent, hassle-free alternative to selling a contract and buying what you want. I think it'd be a better program if all of the listings were eligible, but perhaps they selected contracts that they may own from a previous instant cash offer or other contracts where owners are firm on the price listed? I'd like to hear from the broker, perhaps on the dvc show or other shows they sponsor to learn more details about the logistics of it all.

Yes. It will be interesting to see how they value whatever current contract you have. Will they really make it competitive with other listings for similar contracts to incentivize using the trade in program vs just selling separately?

 

[pianomanzano]

Yes. It will be interesting to see how they value whatever current contract you have. Will they really make it competitive with other listings for similar contracts to incentivize using the trade in program vs just selling separately?

According to the website, they value your contract based on the instant sale tool on their website.

 

[geargrinder]

I see it as an extension of their Instant Quote process.

They will probably offer a little more knowing they are making commission off both ends.

 

[dis_hrnichs]

According to the website, they value your contract based on the instant sale tool on their website.

thank you - I must have missed that before

 

[pianomanzano]

thank you - I must have missed that before

Sorry, my mistake that info wasn't on the website, but they did mention it in some posts on FB.

 

[Sandisw]

Interesting. What happens if DVD takes it in ROFR?

 

[geargrinder]

Interesting. What happens if DVD takes it in ROFR?

Probably same as usual. Both sides are sellers, they get paid regardless. The buyer would just have to find another contract and start another purchase process.

I don't see these as contingency transactions. They are simultaneous but independent.

 

[Sandisw]

Probably same as usual. Both sides are sellers, they get paid regardless. The buyer would just have to find another contract.

I don't see these as contingency transactions. They are just simultaneous and independent.

What i meant is what happens if the contract one is trading for gets taken, but your contract passes…do you have to still sell and owe the commission?

But, I agree it’s basically that you sell and buy at the same time…which one can do now with the instant sale.

 

[geargrinder]

Which is sort of my point. The instant quote option is pretty much there now and does the same thing.

But, it doesn't sound as cool as "Trade In".

 

[theMoreDisneytheBetter]

We were offered $64 after fees for our OKW contract. Adding insult to injury there is no negotiation for the contract we would have bought. No thanks!

 

[kilik64]

Pretty much exactly what I expected ^

 

[Littlelulu01]

I see it as an extension of their Instant Quote process.

They will probably offer a little more knowing they are making commission off both ends.

Do they ever not both sides? I always wonder how it works with the broker as the agent on both end of the deal and the “low” commission of 9.25%. Do they really have buyers represented by their own outside of their agency agents that take half of the commission? Can the seller negotiate the commission or does it just keep raising to sky is the limit? I see today it’s 9.25% but only till the end of March.

 

[Sandisw]

Do they ever not both sides? I always wonder how it works with the broker as the agent on both end of the deal and the “low” commission of 9.25%. Do they really have buyers represented by their own outside of their agency agents that take half of the commission? Can the seller negotiate the commission or does it just keep raising to sky is the limit? I see today it’s 9.25% but only till the end of March.

Each broker sets their own commission rate. I will say I bought and sold one through the same broker who did indeed charge me less because of it..selling 200 abs buying 500!

It was 10% when I sold my first contract in 2010 and has been up and down since then in what I paid depending on what the broker was advertising at the time.

 

[E2ME2]

We were offered $64 after fees for our OKW contract. Adding insult to injury there is no negotiation for the contract we would have bought. No thanks!

Yes - I just inquired about this, and was offered roughly $75/PP for my SSR contract in trade - -
Their average PPP on SSR contracts listed as Trade Eligible is $106/PP-
Not an equitable trade!
Interesting concept, given current status of ROFR, but the huge devaluation of my contract is a harder pill to swallow than the risk of ROFR being exercised on the contract I'd be seeking.

 

[CraigInPA]

This is a classic case of arbitrage. They're buying low from both sides and selling higher to both sides. If they get stuck with a contract for some reason, they have a large margin to hold it until they find a new buyer.

The model is pretty sound from a business perspective, with minimal risk to them. The people doing the swaps, however, aren't getting the full value of their assets, and are likely paying a commission on top.

 

[pianomanzano]

This is a classic case of arbitrage. They're buying low from both sides and selling higher to both sides. If they get stuck with a contract for some reason, they have a large margin to hold it until they find a new buyer.

The model is pretty sound from a business perspective, with minimal risk to them. The people doing the swaps, however, aren't getting the full value of their assets, and are likely paying a commission on top.

Yep, I find most of their promos as ultimately benefiting themselves but providing convenience for the seller/buyer. They had a different promo late last year where buyers could choose to rent out points or trade those points for park tickets from a contract that they purchased. The price they paid for those points was less than what they paid out from their other business unit, DVC rental store. This trade-in promo is another good example.

 

[E2ME2]

This is a classic case of arbitrage. They're buying low from both sides and selling higher to both sides. If they get stuck with a contract for some reason, they have a large margin to hold it until they find a new buyer.

The model is pretty sound from a business perspective, with minimal risk to them. The people doing the swaps, however, aren't getting the full value of their assets, and are likely paying a commission on top.

Love it!
I had to double-check the definition for "Arbitrage"
But I think that is an under-statement for what they are doing here. It borders on being predatory, to me.
The Trade-Eligible contracts are listed 20 to 30% higher than what's been going through ROFR this year.
AND, the trade-in value allotted to the interested "swapper" is about 20% below that same 2023-ROFR average. WOW!

 

[pianomanzano]

Love it!
I had to double-check the definition for "Arbitrage"
But I think that is an under-statement for what they are doing here. It borders on being predatory, to me.
The Trade-Eligible contracts are listed 20 to 30% higher than what's been going through ROFR this year.
AND, the trade-in value allotted to the interested "swapper" is about 20% below that same 2023-ROFR average. WOW!

Predatory might be a little bit strong, but I agree that people who take part in the program really sacrifice value for convenience. Depending on the contract you have to trade-in, you're looking at a couple months to find a buyer, go through ROFR and closing and rinse/repeat for buying the new contract. Listings on their site have always been higher compared to other brokers, but there's always opportunity to haggle and get prices down to a more affordable range (which based on the blog post describing the promo, one can still submit offers).

What doesn't make sense to me why all of the listings on their site aren't eligible for this trade-in promo. My guess is the ones marked trade-in eligible are ones that they may own from previous instant cash offers they've done and are trying to clear inventory.