Selling DVC

[Sandisw]

Really? When I listed my SSR contract with TSS I was told that I probably would not be able to sell my contract at the price I requested (which was not $69, but wasn't $80 either.) I have all my 2010 points and more than half of my 2009 points left. I was told that they would make an "exception" and list it, but that it probably would not sell unless I lowered the price. The broker stated that given the current listing prices, mine was a dollar or two higher than what they recommended and it would confuse the potential buyer. As to why, the broker said that the buyers could not understand why one would be listed at $69 dollars and another listed at $76 dollars.

If the brokers continue to persuade owners to list their contracts at such bottom dollar prices doesn't this just drop the over all dollar value of the DVC contracts? A few years ago you couldn't find a resale contract under $80. What happened? The brokers have convinced people that the current economy and the number of resale contracts available have caused the decline in the purchase price. While this may be part of the reason, I believe the brokers have contributed to the decline in prices as well. If everyone listed their resales at the same or close to the same level, would the resale buyers not still buy? (Taking into consideration # of pints available, fees due, etc.) Of course they would! Lets face it, if someone is truely interested in buying DVC resale, they are going to make that purchase whether the average price is $79 or $69. All that is happening is that the brokers are dropping the value of these memberships. $79 is still a substantial savings over $112!

Don't you think though that the broker was just trying to be honest with you about the market and what they are seeing. Some owners want a sale quickly and don't want to try to wait out the market. If the need to sell is immediate, then the owner may decide to list lower in hopes to secure a buyer, since once that happens, it's sold--either to the buyer or to Disney via ROFR>

When I listed a contract with the TSS, a range price was suggested, based on ROFR, and I chose to list higher because I had time before I needed it sold (had a reservation scheduled) and was willing to wait it out. Although I chose to do something different than what was recommended, they had no problem listing my contract for me. But, I went in it knowing that it could be awhile before I had a buyer.

In the end, I accepted an offer in the range that was suggested so, IMHO, their advice was spot on.

 

[MAGICX2]

Yes, there advice is spot on. Because they have more or less determined the spot. What would happen if they suggested to everyone that they list between $75-$85 instead of $65-$75? The sellers would probably list at that price and the buyers would probably buy at that price.
I am not denying the fact that there are those that can wait to sell and those that need to sell right away. The point I was trying to make is that it seems that the Brokers are pretty much setting the price point. I really am not trying to berate the TSS. They have been very pleasant with me and I currently have a contract listed with them. However, it is at a price that we are comfortable with, not neccessarily the price they recommended.
Quoted for an earlier post:
3) If you price your property correctly and have not borrowed any of your 2010 points it should sell within a 2 to 6 week period.
Jason at The Timeshare Store, Inc.®
How is it decided what the "correct price" is for your property....by the Broker.

 

[tink'smom2B]

Why would a seller care if Disney exercised ROFR? Doesn't the seller make the same amount of money either way?

 

[hellerjw]

Yes, ROFR only hurts the buyer. The seller still gets their same asking price and DVC gets the same terms as the buyer was going to get. We had an AKV contract for sale over the summer and DVC ROFR'd it away from our buyer. We weren't affected by ROFR at all but the buyer lost out on a good deal (apparently too good since DVC grabbed it).

 

[JimC]

I don't believe ROFR hurts the buyer. If Disney exercises its ROFR, the buyer's deposit is refunded and the search begins again.

ROFR does increase what the buyer will pay by setting an unknown and movable floor on prices sufficient for a private transaction to pass.

 

[hellerjw]

Its true that it might not hurt the buyer long-term, but it does limit their ability to pursue other contracts and ties up that deposit for several weeks while waiting on an answer.

 

[silmarg]

Here is my take on the resale situation.

There are a several things that impact the price of DVC contracts, including:

• the overall economy (which is not so hot) and is depressing vacation real estate prices in a big way (have you looked at condo prices in Celebration)
• the DVC resort (resorts like BCV, BW and VWL hold value better primarily due to better locations and that they are smaller resorts)
• when the DVD lease expires
• and the economics of when the contracts were initially purchased (SSR was purchased at the height of the excess credit spending '05-'07)

It is this perfect storm that is dropping the bottom on DVC prices over the past 24 months - and is what is really depressing the price of SSR resales. SSR is poorly located (vs most other DVCs), too big, and sold when credit was easy (thus SSR owners are more likely to have little equity in their timeshare - even after a few years of ownership).

A real estate agency only makes money when a transaction occurs, so they may have a bias to have folks list low - and have buyers bid high (I have heard buyers complain that some agents wont present an aggressive bid to a seller). That said, TSS is not the only show in town. There are 3 other major DVC resellers in the Orlando area. And if you think TSS is not meeting your expectations, then move on.

 

[bonybroad]

Buyers set the price. If it's a bargain and they want it, it will sell.
If it's over priced, it won't sell.
Buyers make the determination of a fair price. Period.
(Ex real estate agent)

 

[BWV Dreamin]

Buyers set the price. If it's a bargain and they want it, it will sell.
If it's over priced, it won't sell.
Buyers make the determination of a fair price. Period.
(Ex real estate agent)

So true. Its worth is only as much as "someone is willing to pay for it ".

 

[hellerjw]

Buyers set the price. If it's a bargain and they want it, it will sell.
If it's over priced, it won't sell.
Buyers make the determination of a fair price. Period.
(Ex real estate agent)

This only applies if your consider DVC a buyer like any other. If you consider them more like a regulatory body then they artificially inflate the pricing due to ROFR. If ROFR didn't exist in the DVC system then the price floor would be much lower than it is now, in line with other timeshare systems out there where pricing has dropped to pennies on the dollar.

 

[ghost1000]

Just to chime in we decided to sell our DVC membership last week and called TSS. Listed it at the price they recommended and got a call today that it sold at asking price!

So far so good!

 

[Jason@dvcstore]

Supply and demand affect the prices of properties.

As an example, I spoke to a seller who owned 240 points at Grand Californian. When they listed the property on August 10th, 2010 The Timeshare Store, Inc.® did not have any sales to compare. We had sold some Grand Californian 25 point listings at $112 per point but I wasn't sure what would happen with a 240 point listing. I explained this to the seller and they decided to list at $114 per point. The property finally sold on 12/7/09 and it sold at $83 per point.

At The Timeshare Store, Inc.® we do explain to sellers how to list their property based on what has sold recently as we don't want a property to be overpriced or underpriced. In our opinion it is not going to do anyone any good if a seller lists their 250 points at Saratoga Springs at $12 per point and also won't do any good if they list that same property at $133 per point.

Jason

 

[thegortons]

Just to chime in we decided to sell our DVC membership last week and called TSS. Listed it at the price they recommended and got a call today that it sold at asking price!

So far so good!

Congratulations Ghost! Glad to hear of your success. I have 2 DVC contracts that I have been trying for awhile to sell by myself and even though I have them priced VERY aggressively, they are not selling. Must not be getting enough eyeballs. So I think I will soon be calling TSS myself. Hope TSS can sell my contracts as quickly as yours.

 

[Jason@dvcstore]

Must not be getting enough eyeballs.

I think that is the key to victory as a seller. The more people who see your listing the better.

Jason

 

[bobbiwoz]

Supply and demand affect the prices of properties.

As an example, I spoke to a seller who owned 240 points at Grand Californian. When they listed the property on August 10th, 2010 The Timeshare Store, Inc.® did not have any sales to compare. We had sold some Grand Californian 25 point listings at $112 per point but I wasn't sure what would happen with a 240 point listing. I explained this to the seller and they decided to list at $114 per point. The property finally sold on 12/7/09 and it sold at $83 per point.

At The Timeshare Store, Inc.® we do explain to sellers how to list their property based on what has sold recently as we don't want a property to be overpriced or underpriced. In our opinion it is not going to do anyone any good if a seller lists their 250 points at Saratoga Springs at $12 per point and also won't do any good if they list that same property at $133 per point.

Jason

I must say that if I were the VGC seller I would have been very sad. I understand that in the end they agreed, but they must have been disappointed. I haven't followed those sales at all, do you know what the first price Disney listed it at was?

Bobbi

 

[JimmyJam838]

I don't know what they were priced at when they were first listed, but we paid $87 per point for 260 pts. That was during the webcast they had in June.

 

[bobbiwoz]

I don't know what they were priced at when they were first listed, but we paid $87 per point for 260 pts. That was during the webcast they had in June.

Oh...thank you. Then the original asking price was too high, given that information.

Bobbi

 

[ACDSNY]

I must say that if I were the VGC seller I would have been very sad. I understand that in the end they agreed, but they must have been disappointed. I haven't followed those sales at all, do you know what the first price Disney listed it at was?

Bobbi

For those of us that bought as Founding Members the price was $107 ($112 - $5 disc). I've now learned never to buy as a FM.

 

[silmarg]

I have been been in the market as a buyer of DVCs on the resale market and here is my take on the agencies. (this is all my opinion)

I think Fidelity (fka GMAC) has the most listings (DVCs listed for sale) but does not do a good job selling them directly. They get the large number of listings as apparently if you call DVC directly and tell them you want to sell your contract - they suggest Fidelity. That said, they charge buyers a $195 "administrative fee" to buy a DVC thru them - a real turn off for buyers vs the other resellers. So they have alot of sellers but few buyers. Not a real market maker.

DVCbyResale (Shontell) and ********** (Jaki/****) both co-operate with Fidelity (meaning they will share Fidelity listings with you... just like a multiple listing service). So for buyers, they are both good places to look for alot of listings. These co-operating listings wont be on their website, and while they will try to sell their own listings before they sell you a Fidelity contract (then they dont have to split the commission) they will sell you a Fidelity if there is one that meets your specific needs.

TSS I think has a lot of buyers looking for DVCs, their fairly priced listings sell way more quickly than anyplace else (I have seen some real attractively priced contracts not move at Fidelity that would not survive one day with TSS's clientele). If I were a seller of DVC, there is no doubt I would list w TSS. On the buy side TSS does not share listings with the other agencies - that limits available inventory for buyers.

Selling a DVC is way different that selling regular real estate as contracts are more less homogenious. One SSR 160 pt contract is very much like another 160pt contract. Available points, UY and price are the only variables from one contract to another - unlike regular real estate where location, size construction, layout and countless other variables will cause price differences, DVC has far fewer variables. Its for this reason that DVCs must be priced right to sell quickly and must be listed with the right broker (more so than other real estate).

 

[MAGICX2]

Very informative post silmarg. I am still waiting to even get a nibble on my listing, 4 weeks and counting.