Timeshare owners concerned about resale issues

Timeshare owners concerned about resale issues

A new survey from Vacatia reports that timeshare owners are happy with many things about their timeshares, but have one big concern - potential difficulties in selling their timeshares. Surprise, surprise! If it was as easy to sell a timeshare as it is to buy one, this industry would be a lot different than it is today.

Store buying and selling bikes If only buying and selling timeshares worked like other things...

Vacatia (who sponsored the survey) runs an online timeshare marketplace, a website that facilitates buying and selling timeshares. While I applaud the idea (and have a few notes on their site below), I'm afraid that having a new online marketplace will not address the fundamental issues with the timeshare resale market.

Here are the real problems, as I see them.

Business model means a big price drop when selling

Selling new timeshares is quite a business. Companies give away significant freebies to keep a steady stream of prospects coming in the door, and run them all through a high pressure sales funnel. It's an unusual business model, and I don't know of any other industry that operates quite the same way.

Where does this become an issue for resales? Because of the built-in difference in sales power between the timeshare company's streamlined sales system, and your sales system when you want to sell.



Look at it this way. Say you have a couple who are intelligent and knowledgeable, and able to evaluate what value they will get from owning a timeshare. If their own analysis would lead them to think a certain timeshare is worth $50K, then the timeshare company would not need this extensive, expensive system. They could sell it like other real estate - list it, advertise, show the property, and let people make up their own minds. The current system is needed because so many people, given all the facts and time to make up their own minds, would not buy a timeshare at the retail price.

Cute Rube Goldberg invention Your sales system isn't quite as sophisticated as theirs

When you try to sell that timeshare you bought retail, you don't have a big league sales system to convince people to bay big league prices. You don't have a high pressure environment, where you can keep your prospects captive for a couple of hours as you beguile them with possibilities. Your timeshare will have to sell on its own merits, with whatever info you can put in a sales ad. Lower selling power translates to a lower price.

Right now, the deck is stacked for you to take a significant loss when you sell, because you don't have the same machine behind you.

Deck of cards It sometimes seems the deck is stacked against you

Resale limitations make selling more difficult

Whenever a timeshare still has active sales going on, that means the developer sales are in competition with current owners who are reselling those same timeshares. How can they charge $50K for a timeshare, while a current owner is offering the same thing for $5K? Enter the world of resale limitations.

This is where timeshare companies say that resales only get a limited product. An analogy would be that this is like buying a car that is fully equipped and fully capable, but knowing that when you go to sell it, whoever buys it will not get the same package you have. How serious this is depends on the company involved.

  • Minor details. With some companies, the limitations are fairly minor. It's like knowing when you sell the car, the rear window defogger will be gone.
  • Major limitations. For other companies, the limitations can be significant - more like capping the speed, so the next owner won't be able to drive on the highway anymore.

You can see why this makes it harder to sell your timeshare.

  • First of all, it means the value (and price you can get) goes down when you decide to sell.
  • Secondly, for the timeshares with major resale limitations, how many people want to buy a product so limited? Your pool of potential buyers is diminished.

The fact is that timeshare companies don't really want you to sell your timeshare. As long as you own it, they have somebody paying maintenance fees, and life is good. When you try to sell, that's when it becomes a problem for them.

Some timeshares are nearly impossible to give away

Some timeshares get into an area of negative value, so that it is almost impossible to sell them, or even give them away. These are the timeshares that you see on a timeshare sales site, with 35 of them for sale, starting at $1. How does this happen?

Sign for Impossible Mission Unfortunately, selling some timeshares is nearly impossible
  • Rising fees. When maintenance fees grow and grow until they reach a level that is too high for what you get, then the value is not there anymore. If I can rent something comparable for less than the maintenance fees, why would I want to pay more and lock in that negative value?
  • Seasons. In some cases, seasonality can lead to negative value. In many places, owners in every season pay the same maintenance fees. However, the value is much greater in the high season, when everybody wants to be there, and accommodation prices are high. In the off season, few people want to be there, and you can pay much less to just rent something than you would for those maintenance fees.
  • Underpriced rentals. Another issue is when the timeshare company themselves rent out units for less than the maintenance fees. Once again, why would you buy, when you can get the same thing for less, without any on-going obligation?

These problems leave the unfortunate owners of these timeshares in a difficult spot. How can they get rid of something nobody wants to buy?

What's the solution?

I don't know how to fix all of the problems, but I do have a few ideas that can help people.

What's the solution? What's the solution?
  • First of all, I am a big believer in buying timeshares on the resale market. This eliminates the typical steep price drop due to the discrepancy in sales power between you and the developer.
  • Note: I know, I know. Somebody has to buy those timeshares the first time! But it may not be people who read this blog, or my timeshare book... 🙂

  • Secondly, by buying resale, you work around the resale limitations. Sure, your timeshare has some limitations, but you can sell the same exact thing that you bought, retaining the value that you paid for. You will know exactly how the timeshare works, resale limitations and all, and can represent this correctly to potential buyers.
  • Lastly, make sure to do all of your research and due diligence before buying a timeshare, to avoid ending up with one of the lemons. Of course, there is no guarantee, and no crystal ball showing the future, but making sure you start out with a winner makes it far less likely that you will end up with a problem later on.

About Vacatia

Vacatia is an online timeshare marketplace, intended to make the process easier and more pleasant for both timeshare buyers and sellers. Among the results of their survey of timeshare owners, the standout item was this:

70% of respondents expressed concern about potential difficulties in reselling their timeshares.

I took a quick look at the Vacatia.com website. I have not actually used the site to either buy or sell, but here are a few thoughts and observations from just looking around the site briefly. (I am not associated with that company in any way.)

  • No up front fees. This is definitely important for sellers. You do pay a fee, but only once the sale is made.
  • Nice, simple, attractive format. They present all of the timeshares in a consistent way, and the overall effect is quite appealing.
  • Data is inconsistent. The format was consistent but the data was not, based on a few random spot checks I did. For instance, the same exact 2-BR timeshares at a resort that I know personally, had maintenance fees listed from $431 per year, to $500 per month.
  • There are already other timeshare marketplaces available, such as Redweek or eBay. Of course, when you look through those, you can find inconsistent or incorrect information, as well. Buyer beware.
  • They offer a service "Vacatia Guaranteed", where they will verify all of the details of the timeshare to confirm that the information is correct. I really like that idea, but since there is an additional cost to the seller, I'm not sure how many people will take advantage of it.

I wish Vacatia all the best, and I do want to see the resale market improve. However, until some of the fundamental issues are resolved, I don't think an online marketplace is really going to fix people's concerns.

Comments? Questions?

Consumer Awareness Guide to TimesharesHave you sold a timeshare? If so, what was your experience? Are you thinking of selling one, and are you concerned about it? I'd love to hear what you think, so please leave a note in the comments below.

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I started this website to provide important, useful information to timeshare owners and potential owners. I am a fan of timeshares, and think they can be wonderful, but there are definitely issues you need to watch out for. Before you buy anything, check out our free Consumer Awareness Guide to Timeshares to find out about common pitfalls and how you can avoid them.
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Hi! I'm Deanna, founder of Winning the Timeshare Game, and author of the books. After running an international tour company, I'm now into the fascinating world of timeshares. I enjoy sharing all the tips I discover, and I'd love to see everyone have as much fun with their timeshares as we do!

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23 Comments

  1. Hi Deanna. My concern is not able to use my studio in Cabo because of finances. How can I take advantage of using my timeshare? I stopped being a member of II and HSI because of finances then. I am now able to look at my options but I do not know where to start. I have a studio. Please help. Thank you.

    • Hi Gladys - I'm sorry to hear about your issue with the timeshare in Cabo. Generally, you have a few options with your timeshare - use it, exchange it, rent it out, give it away, or sell it. If you are no longer a member of II, there are still other companies where you could exchange it, like Dial an Exchange (daelive.com in the US, which is free to join). I don't know what kind of exchanges you'd be able to pull - there are a lot of variables, but you're sure to get something. You can also look into renting it out, and post it for rent on a site like Redweek.com. I'm actually just wrapping up my next book that goes into all of this in detail, but hopefully this is enough to get you started! I would love to hear how it works out for you. Thanks for stopping by!
      Deanna Keahey recently posted...RCI Platinum - Still worth it in 2014?

  2. Susan

    I enjoyed reading your articles. You made a lot of good comments. I am a seller of a timeshare. I am still researching the notion to sell because I want the buyer to be aware of what they will receive from the timeshare. I intend to be as honest with them as I can. Some people love the idea of having a timeshare. I have enjoyed my timeshare but not I am retiring and really don't want to use it anymore. I am ready to sell my timeshare, but just like the person who is interested in buying a timeshare I want to make the right decision on how I sell or donate my time share. I could rent it out, but am afraid the renters would not be responsible enough. Renting would cover my yearly fees, but I really don't want the hassle of dealing with renting. So what is a person to do with a timeshare they don't use and would like to sell? Thank you for your discussion.

    • Hi Susan - Thanks for your comments! I'm glad to hear that you did enjoy your timeshare and got value from it. Nevertheless, the time comes when it makes sense to sell. If you could rent it out for a profit, that might make sense to keep, but if it's just going to cover the fees, then renting it won't be worth the hassle. There are a number of sites where you can list timeshares for sale. The biggest is eBay, but it would help if you have a good seller rating there already. Aside from that, you could try listing it on Redweek.com. There are other sites, too, but I hesitate to recommend one that I haven't personally used. It may take some time to sell, depending on how you price it, but it sounds like yours still has value and I'm sure it will sell in time. Best of luck with it!
      Deanna Keahey recently posted...Timeshare owners concerned about resale issues

  3. Jeff Weir

    Good site and good advice, Would like to interview you for my freelance writing on timeshare resale issues

  4. Al Holland

    Much of your information is quite eyeopening. On a previous issue you commented on, do you know the outcome of the Christie Lodge, Avon, Colorado, lawsuit by Ms. Linda Space? Christie Lodge has slammed the door on many potential exchanges or transfers that were negotiated through legitimate transfer companies. Was there a precedent setting ruling on Ms. Space's judicial issue? Was there a settlement in her favor? Any insight would be appreciated. Thank you for taking the time and energy to put together such an enlightening website!

    • Hi Al -
      Thanks for the comments and the good words!
      I did some follow-up on the case with the Christie Lodge. From what I read, Linda Space's lawyer said that the case was resolved, and that he thought both parties were satisfied with the results, though he could not disclose any details. She was able to transfer her timeshare about 6 months after the lawsuit was filed, but I do not know if that transfer went to the same person she initially sold it to, or to another buyer. I wish that there had been a court ruling, to set a precendent on this matter, but I am happy that Ms. Space was able to get a resolution to her dilemma.
      Thanks again! - Deanna.
      Deanna Keahey recently posted...Should I buy a timeshare to get a certain exchange?

    • Hi Michael -
      You're right that there are far too many scams targeting timeshare owners. The safest thing is to only do business with companies you know, and where you make the initial contact. Scammers often cold call unsuspecting owners, promising them sweet deals, then taking their money.
      Thanks for your comment! - Deanna.
      Deanna Keahey recently posted...Should I buy a timeshare to get a certain exchange?

  5. Ed

    I currently own 4 timeshares and am considering buy more on the resale market. Can you provide a check list of things I should consider and do to protect myself during the transaction?
    Thanks,
    Ed

  6. Lia caprara

    Hi !!
    I just bought a Hilton gran vacation at 57th st in NYC for 54K 1 studio for 7 days a year. HOA is 1500/year. My concern is that if I can use the 5250 points to use other places in the world and get our money worth for this exchange. Also, if I wanna have a kid I will have to book a 1 bedroom instead of the studio. Will this be difficult ? What people who has the same one is saying about this timeshare ?
    Thanks a lot !!

    • Hi Lia -
      Thanks for your comment! You've bought at a good property. NYC is not a cheap place, but it has a unique appeal, and this is a quality resort in a good location. If you want to use your points to travel elsewhere, that's certainly possible. As far as getting your money's worth, always compare your options, because sometimes you may find that other accommodations can be a better deal - it just depends on the specific situation. About the 1BR, the issue is that it costs more points than a studio. With 5250 points, it sounds like you've got a Platinum studio plus. If you have schedule flexibility, you could book a 1BR in gold season with that many points, but not platinum.
      Best of luck with it! - Deanna.
      Deanna Keahey recently posted...Should I cancel my timeshare purchase?

  7. Deanna - do you have any information on Harbourside Atlantis Timeshares - I have attempted for a year to sell ($0) my parents 2/2 lock-off silver, but to no available. Is there a takeback policy with Harbourside like with DRI - they have said no, but just curious if I am talking to the wrong department (as you eluded in your Diamond Article). If I stop paying what are the ramifications given this is a non-US property? Any helpful advice would be great - my parents can no longer afford the maintenance at this stage of their lives and do not even use it. I already own my own timeshares and enjoy them, however I am not looking to take it over.

    • Hi Tracy -
      Thanks for your message! I don't know of any take-back policy with Harbourside. You could try to make the hardship case with them, and hope you find somebody with a soft heart, or try pointing out that if your parents stop paying, they'll get it back anyway. It would be easier, cheaper and faster for them to just take it rather than have to deal with legalities to get it back via foreclosure.
      Some places will go for this approach, and others won't, but maybe you can convince them.
      Another avenue you could try is posting it as a $1 bargain on the TUG Bargain Basement marketplace (http://tug2.net/). There are a few listings on there now for that resort, so you can see what other people are asking/offering, and then list yours too.
      Good luck with it! - Deanna.
      Deanna Keahey recently posted...Interval Gold and Platinum - Are they worth it?

  8. Suzanne Cloutier

    Hi Deanna... we have sent you a private message via your Facebook account, using Messenger. Please... please... please... we need your help. Can you check it out ? We are waiting for your response. Thank you for your help.

    A helpless Canadian couple who needs your help.
    Michel & Suzanne Cloutier

  9. I liked what you said about double checking the resale limitations. That would be a good thing to be aware of when it comes to timeshares. I would want to be able to sell a timeshare if there as ever a time when I didn't want it anymore.

    • Hi Ivy -
      Thanks for your message! It's *definitely* something to be aware of if you're buying a timeshare! Unfortunately, it's not something that a timeshare salesperson is apt to tell you, unless you let them know that you're looking at resale timeshares at the market, and why not buy one of those?

      Otherwise, I'd expect that those resale issues get swept right under the rug. In fact, sales people have been known to tell buyers "it will be easy to sell anytime", when that is totally not the case.
      Best of luck with it! - Deanna.
      Deanna Keahey recently posted...How to get rid of your Diamond Resorts timeshare

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