The Truth About Timeshare Resales
Timeshare is a very simple concept that began several decades ago and is a great way millions of individuals and families vacation every year. Most people purchased their resort week(s) or vacation club points product from an established development company or on the secondary market. The focus of this article is to discuss resale, which remains the single most significant issue confronting the industry today.
A Little History
Developers first began marketing timeshare by using a variety of methods, including but not limited to, direct mail and telemarketing. Normally the solicitation included some form of give-away or premium to entice customers to attend a sales presentation. In many cases, these presentations, or tours as they are called, ended up being a painful sales experience. Bad sales practices are shameful, regardless of the industry. We would like to explain the reasons timeshare resales do not mirror those of general real estate.
Marketing
The cost of marketing has been and remains the most significant variable in the ability to sell timeshares. Notice we did not mention “profitability” to sell timeshares. Many development companies have gone out of business as a result of ineffective or inefficient marketing practices. For example, if marketing costs are 50% to 75% and an individual paid $10,000 for their timeshare, the company is already out $5,000 to $7,500 before the sale. The conclusion is that the only way for successful (and not so successful) companies to sell this product is with expensive marketing programs. If you do spend marketing and advertising dollars as developers do, you will never come close to recapturing your original purchase price.
The Price
As we have discussed above, the sales price is originally determined by the developer and includes all costs plus a profit. The largest part of that price is sales and marketing costs. What does the market say about pricing? It’s not very encouraging unless you happen to be one of the few who owns in an area of very strong demand and little supply. It’s sad, but true that inventories remain high with individuals or companies who want to sell but have properties with significantly less demand for their time. The product was originally sold with high sales and marketing costs included. Over-supply has placed resale prices on the low end of the original sales price. Prices can, and do, vary by location, quality and supply and demand.
The Solution
The best solution to sell your timeshare is to attempt to sell it yourself. Yes, there are many companies that will attempt to sell your timeshare but very few are successful. The following methods are the best way to advertise and market your timeshare and will normally yield the best results:
- Advertise locally or regionally in classified newspaper or trades. You control how much you are willing to spend to try and sell your week.
- Place an ad on the internet (WARNING: Listing fees do not guarantee a sale and should be avoided.)
- Sell it or give it to a relative or friend. This is the most simplistic and less costly way to free yourself of your week if you no longer wish to use it.
A Word Of Warning:
There are many individuals and companies that claim to be in the resale business. Some do have success; however, that number pales in comparison to those who fail. Many of these companies charge up-front marketing, listing, appraisal, and advertising fees, etc., but in no way guarantee results. Another tactic utilized is to offer an alternate product and the pitch includes taking your week as a trade. They never record the deed to your week so you end up owning both your original timeshare week along with a club membership from that company.
We want you to be aware that timeshare resale scams are out there and that the companies that offer these “deals” are very good at convincing you they can sell your timeshare. You can always check to see if a company has any complaints by going to www.bbb.org or calling the Better Business Bureau in the state where the company is located. We encourage you to research the company fully before committing to any agreement for them to sell your timeshare.