Resale brokerage question

[kilik64]

Highly doubt you'll find any contracts that are "owned" by DVC Resale Market.

You will however find multiple LLCs that own a lot of their listed contracts that are in turn owned by employees of DVC resale market.

When we bought our SSR resale from them, turned out that the LLC that owned it prior to us was owned by an employee of them and that same LLC has loads of contracts bought and sold.

There tons of ways to get around the 8000 points limit...

(Im not making a judgement either way regarding the practice, just pointing out the facts based on my own research related to my specific purchase from there. Price at the time I bought was inline with the market, they did make a profit most likely as from what I could tell it was obtained from a foreclosure auction, but who knows if they had to pay back dues on it too. Its a big rabbit hole if you go looking at stuff.)

Probably off topic, but where you can make an argument regarding the practice is that the same company also has a huge rental business. This allows them to buy loads of contracts and rent them if they cant sell for what they want, can help to manipulate the resale market some (granted ROFR or lack thereof has a much bigger impact).

 

[kilik64]

Agree with @RoseGold , end of the day broker doesnt much matter really. The title company actually does all the work on getting the contract closed, all the broker is doing is putting a buyer and seller together and sending the paperwork over to the title company. All the money exchange goes through the title company.

So really your question regarding resale should be who the best title company is.

 

[Genie+]

Probably off topic, but where you can make an argument regarding the practice is that the same company also has a huge rental business. This allows them to buy loads of contracts and rent them if they cant sell for what they want, can help to manipulate the resale market some (granted ROFR or lack thereof has a much bigger impact).

That would also fall into commercial use where rentals are concerned. Explicitly not permitted in DVC contract. Was also one of only a few things my guide was required to tell me when we purchased direct last month.

 

[CVG]

My view is that if they are wanting to hide it then they are shady. There's no other reason not to be open about ownership.

It would help me to know so that I have a better idea of what contracts are worth trying to negotiate on. Personally, I just ignore brokers with a high ownership rate (I look at how many of their contracts are stripped). I'll start thinking about doing business with them once they become more transparent.

 

[Genie+]

The issue with brokers also selling contracts owned by them or coworkers etc is certain questions will be answered with bias.

 

[CVG]

....these brokers also seem to be overly-keen on educating me!

 

[DanCali]

Is there a reason why DVC owners have avoided listing directly and saving the 7%-10% commission?

Being an owner of multiple Marriott and Westin weeks, but relatively new to DVC, I find it pretty incredible how the DVC resale market is dominated by brokers. I've purchased pretty much all of my non-DVC resales via Redweek or tug marketplace and the majority were listed by the owner and not by a broker representing the owner. As a buyer paying for closing costs, I would pick my closing company (a small 2-3 person shop in Orlando area with reasonable costs, which also advertises DVC closings by the way) and they would take care of a sales contract, if needed, and escrow.

But there are just about 10 DVC resales currently listed on Redweek (half of those Aulani), and even those are all listed by brokers.

 

[RoseGold]

But there are just about 10 DVC resales currently listed on Redweek (half of those Aulani), and even those are all listed by brokers.

Because Redweek requires a membership.

I almost completed a private sale on Facebook. There are tons of groups for sales and rentals. Problem is you have to have a buyer educated enough to understand what you are posting, but they are out there. And someone has to handle the legwork of contacting the title company and all of that.

 

[DanCali]

Because Redweek requires a membership.

The Redweek membership is about $20/year (and listing fee another $30).

The commission on selling an average 200 points contract can be over $2000....

 

[Sandisw]

Is there a reason why DVC owners have avoided listing directly and saving the 7%-10% commission?

Being an owner of multiple Marriott and Westin weeks, but relatively new to DVC, I find it pretty incredible how the DVC resale market is dominated by brokers. I've purchased pretty much all of my non-DVC resales via Redweek or tug marketplace and the majority were listed by the owner and not by a broker representing the owner. As a buyer paying for closing costs, I would pick my closing company (a small 2-3 person shop in Orlando area with reasonable costs, which also advertises DVC closings by the way) and they would take care of a sales contract, if needed, and escrow.

But there are just about 10 DVC resales currently listed on Redweek (half of those Aulani), and even those are all listed by brokers.

For me, it was worth it to have them handle everything. Finding the buyer, dealing with contracts, etc.

No desire ever to handle it on my own. Sort of like selling a house on your own vs a realtor.

Get there are less expensive options but all I have sold…about 6 to 8…were stress free.

 

[DanCali]

For me, it was worth it to have them handle everything. Finding the buyer, dealing with contracts, etc.

No desire ever to handle it on my own. Sort of like selling a house on your own vs a realtor.

Get there are less expensive options but all I have sold…about 6 to 8…were stress free.

Sure - there are non-DVC sellers who value that convenience too (and then their brokers will list on Redweek).
But in the end, it's just a timeshare - not a condo or single-family home. There are no showings or inspections or attorneys to deal with. No putting stuff in storage or bringing model furniture to make it more appealing. No painters and plumbers to call in to fix things. No fixing or replacing broken appliances. It's really not that hard to sell on your own... And having been through several DVC resale closings by now (as buyer), the process doesn't seem too different at all.

So I would have expected a more balanced split in the broker vs. direct listings, and not a 99.9% skew towards brokers. There are always those who haggle over $5-$10/point when buying or $5-$10/point when selling but then everyone willingly pays that same amount (or more) to a broker as part of the sales process almost as if there is no other option...

 

[Sandisw]

Sure - there are non-DVC sellers who value that convenience too (and then their brokers will list on Redweek).
But in the end, it's just a timeshare - not a condo or single-family home. There are no showings or inspections or attorneys to deal with. It's not that hard to sell on your own. And having been through several DVC resale closings by now, the process doesn't seem too different at all.

So I would have expected a more balanced split in the broker vs. direct listings, and not a 99.9% skew towards brokers. There are always those who haggle over $5-$10/point when buying or $5-$10/point when selling but then everyone willingly pays that same amount (or more) to a broker as part of the sales process almost as if there is no other option...

In 2017, I was a buyer and seller at the same time and the broker I used lowered my rate to 5%.

But, in the end, for us, it was still much easier and worth the commission, timeshare or not.

 

[BessaB]

Thanks, everyone. I’m learning so much.

 

[chcknctlt]

I wonder how much negotiating leverage you have with commissions with these sites in times where inventory is low...seems like there are times you see them really asking for points to sell and that is probably the time to play hardball with the rate.

 

[Cyberc1978]

I wonder how much negotiating leverage you have with commissions with these sites in times where inventory is low...seems like there are times you see them really asking for points to sell and that is probably the time to play hardball with the rate.

My assumption is not much if any at all, but I think it all depends on the current situation. If the broker can sell all they get in then zero room for negotiations but if they have a lot of listings then maybe. Also think it depends what kind of price you expect for your contract. If the price is below or match the current market then it should be an easy sell and the broker might be more inclined to lower his commission.

 

[kilik64]

Its the same reason people sell on Ebay, convenience of getting a buyer and seller together, which percentage wise, ebay takes an even bigger cut. And has less "work" to do to boot lol.