What Are The Most Common Reasons to Sell?
If you agree with one or more of these common reasons to sell, you should sell sooner, rather than later.
1)You are Not Using the Timeshare
2) Maintainence Fees are Too Expensive.
3) Health Concerns
4)Using the Timeshare is Too Complicated
5)Travel is Difficult
6)Your kids do not want the timeshare
7)You are ready to simplify your life
8)You are buying a vacation home
9)Spouse Passed Away
Discover the question that could save you thousands of dollars...
Timeshares are difficult to sell. Many are not worth more than $500 in a buyer’s market. It is hard to tell the good guys from the bad guys.
A search for timeshare resales will yield results for marketing companies, exit companies, liquidators, cancellation attorneys, entities appearing to be charities, transfer companies and resale brokers.
Do not be deceived. All of these players are likely to charge a large upfront fee of at least $2,500 up to $10,000! Some will promise to transfer the timeshare out of your name. Some will promise to break the contract with the developer.
But there is one magic question that can cut through all the noise and save you thousands of dollars.
“Are all the fees I pay taken from the proceeds of a closed sale?”
Ask early. Listen to the answer very carefully.
Run away if you hear anything other than “YES” such as: “No” or “All fees except” or “Most” or “Everything but” then you should exit the conversation as fast as you can.
Any upfront fee is a red flag that your timeshare may not sell for more than $500. Anyone who is paid a fee upfront, has no incentive to sell your timeshare, or price it correctly in a buyer’s market.
Some representatives are very skilled at manipulation. Here is a Bonus Magic Question to ask that will help shelter you against losing time and money...
“In what state are you a real estate licensee?”
It is very likely the person you are speaking with is unlicensed, and therefore cannot give pricing advice or solicit your real estate listing. There is no state known at this time that allows unlicensed assistants (tele-marketers etc) to give pricing advice. New Hampshire allows unlicensed assistants to, “Give general information about listed properties such as... price (without any solicitation on behalf of the assistant)”. A NH telemarketer may quote you unrealistically high pricing mistakes others have made.
Do not be fooled. These seller’s were charged an upfront fee only to pay year after year of maintenance fees while hoping the overpriced timeshare would sell. Only a licensed timeshare resale broker who gets fully paid from the sales proceeds should be relied upon for pricing advice.
Do not make the mistake of listing your timeshare based on the over-inflated pricing mistakes others make in a buyer’s market.
Bottom line? True Timeshare Realty llc can not sell a timeshare if it has no resale value. We are a licensed real estate brokerage and we promise to treat you the way we would like to be treated.
What is the best pricing strategy to sell a timeshare?
You do not want to over-price your timeshare and have it sit unsold while the maintenance bills keep coming.
You don't want to under-price your timeshare and leave money on the table. Learn to price your timeshare to sell in a buyer’s market and find your pricing “Sweet Spot”
Now that you understand that the timeshare secondary market is a buyer’s market, you can now understand the reasons for the pricing strategy that will help you net the most money in the least amount of time.
You will always net more if you price correctly at the beginning! But how will you know what price to set? Who can you trust for advice?
You have to speak with a trusted resale broker who does not charge upfront fees. When someone gets paid for performance, they cannot afford to carry overpriced listings that will not sell, or they will go out of business fast. They have to understand pricing, because if they price inventory too high, it will only serve to help sell their competitor's listings.
The Do-It-Yourselfer almost always over-prices their timeshare. They remember the salesman repeatedly saying “It is deeded real estate”. And real estate goes up in value over time, right? This will be a whole other topic for another day, but there are two markets...developer controlled inventory and resale (secondary market) inventory. The first is controlled by the developer, the second is a Free Market, determined by private buyers and sellers.
Consider that a DIYer’s over-priced Marriott Vacation Club timeshare on the secondary market will only help sell the lower priced units. And when the lower priced units sell, more lower priced units will fill in the spaces. The over-priced seller will see more maintenance bills because it will take longer to sell.
Adding insult to injury, they will also notice sales prices gradually sloping downward, favoring buyers. So not only are they paying more in maintenance bills, the net they realize from a sale is lower the longer it takes to sell.
Many sellers believe it to be their advantage to “build in negotiation room”. That has not been our experience. The best bet if you are serious about selling is to price it correctly at the start, using a broker's guidance. Make sure the resale broker does not charge a large upfront fee.
For 99% of timeshare resales on the market, there will be a cluster of the lowest priced units all within the same range, but maybe a few hundred dollars apart. You may be tempted to prove just how motivated you are to sell, by undercutting the lowest priced units.
Do not do this! It will trigger a “race to the bottom” to see which seller is the most desperate to dump their timeshare first. There will be volleys of price cuts by the sellers driving prices down. My suggestion is to have your price right in the mix of the lowest four or five comparable units because a buyer will often contact all four or five of those sellers at the same time.
That’s when having a broker with excellent followup and communication skills makes all the difference. A good broker with fast communication can lock in a deal simply by responding to a buyer’s inquiry first before other sellers respond.
Should I Wait to Sell Until Prices Improve?
We cannot predict the future, but we can learn from the past. Downward pressure on timeshare prices will likely continue.
People who wait usually lose money...
Upon hearing solid pricing advice given by a broker who gets paid solely from the proceeds of a closed sale, many sellers have chosen to hold the timeshare to see if prices will get better. Unfortunately, every one of those folks that came back later, sold for a lower price. Often with another year’s maintenance fees having been paid.
Our philosophy is that history is a much better teacher than gazing into a crystal ball. While anything is possible, prices have steadily declined the past 15 years as the internet has had an increasingly larger impact on vacation travel. It stands to reason that online businesses like AirBnb, Expedia, Home Away, VRBO etc will continue to flourish, and that only more competitors will enter the online realm causing further downward pricing pressure.
Resale price disparity is especially bad for those who purchased retail from the developer. But even for those owners who purchased on the secondary market years ago find their units selling for less than what they paid. There has been a steady decline in resale prices, and it does not appear that the trend will be reversed.
There are developers with ROFR (Right of First Refusal) that have helped support the market for their timeshares. Developers like Marriott Vacation Club, Disney Vacation Club, Hilton Grand Vacations Club all have ROFR. Of these developers, Disney has held their value the greatest. However, if you are thinking about selling, doing so sooner rather than later is most likely the smartest decision to make.
Consult a resale broker who only gets paid from the proceeds of a closed sale.
Is it a Buyer's or Seller's Market?
The timeshare resale market is, and has been a buyer’s market for a very long time. What is a buyer’s market? Any market for a product where there are too many seller’s, and not enough buyers.
In these conditions, buyer’s can take their time and go bargain hunting for the best deal without fear of losing out to another buyer at a higher price. In the absence of buying competition, prices are driven downward as it becomes a contest among the sellers to sell their timeshare first.
That drives prices down.
Many timeshare owners remember the salesman pitching the timeshare as deeded real estate, claiming that prices are rising. That made sense since real estate tends to appreciate over time giving the owner equity.
The timeshare salespeople working for the developers are slick and did not mention that there are two markets. Yes, prices are going up. Their prices, that they control can go up on a whim. Most timeshare owners purchase Developer inventory...aka retail. The retail timeshare market’s pricing is controlled by developers.
The resale market, aka the secondary market is a free market, with prices set by buyers and sellers. Theoretically, prices can go up and down, and they do. But it is a rarity when a timeshare resale price rises over time and it would be difficult to cite an example. Even folks who purchased resale a few years ago are noting that their sales prices are less than what they paid a short while ago.
This downward pricing trend does not appear to be changing. Once you understand that it is a buyer’s market, the quicker you will sell your timeshare. We will be discussing pricing strategies later that have been developed to work best in a buyer’s market.
Avoid These Common Rookie Mistakes
Should you deposit into Interval or convert a week into points? Should you book a week if you are going to sell?
Don’t make these expensive mistakes...
Usually before a resale timeshare broker speaks with a seller, that seller first contacts the developer. That is a great first step because the developer may offer to buy back the unit. More often than not, a buy-back offer won’t be made. The rep you speak with will often give well intentioned advice which ends up hurting the seller. It is not malicious, they think they are helping.
Do not make the mistake of depositing into Interval International, or converting into points until you speak with a licensed broker who sells timeshare resales. Make sure they do not charge upfront fees. Make sure they get paid for performance from the proceeds of a closed sale.
That broker is hoping that your timeshare has use remaining in the current year that you are not going to use. They are hoping your next year's use is unencumbered, meaning it can transfer to a buyer.
When you have use remaining in the current year that a buyer wants to use, you will be reimbursed for the maintenance fees that have already been paid at the start of the year. What if the buyer doesn’t want to use the current year’s use? You could reject their offer, and wait for someone who will reimburse you for current year’s use...or a competent broker can rent out the current year's use.
When you have use in the upcoming year that is available, that means that you can be competitively priced with the comparable units and that the buyer will be responsible for next year's maintenance fees.
If you do not have use in the upcoming year, in order to get a buyer to part with their money without having use of the timeshare for over a year, you will have to be the lowest priced unit. Plus, if you encumber the upcoming year, rendering it non-transferable to your buyer, guess who pays that year's maintenance fees? You.
Finally, if you know for certain you are going to be selling then if you want to stand out in a crowded field of sellers...it’s advisable to book an excellent week at your resort for the upcoming year. Consult a competent Marriott Vacation Club resale broker for further guidance.
Completing this simple task will elevate you among other sellers because they often have nothing booked, and by the time a buyer buys all the good weeks are booked up. Thinking ahead pays dividends and will not hurt you. We’ve never lost a deal because a seller booked an excellent week ahead of time.
Can I get out of my timeshare loan when I sell it?
Your Loan Must be Paid in Full Before Closing
Selling a timeshare with a current loan will not eliminate that loan. A timeshare sale cannot close if any money is owed to the developer.
Underwater? Consider renting your unit.
If you owe money on a loan for your timeshare, you may find that you are ‘upside down’. You owe more than the timeshare is worth. These loans often come with a high interest rate and cannot be assumed by the buyer.
The developer who issued the loan will not allow the timeshare to transfer to a buyer without that loan being paid in full. As long as the loan is paid in full by the closing day, a transfer will occur. This means the seller may pay any outstanding balance at the time of closing.
As part of each closing, the developer will issue a financial estoppel to the closing company which has it signed by all parties as part of the closing. This financial estoppel will show any loan balance and/or past due maintenance fees that may be a part of the seller’s account. These items must be cleared up in order for the transaction to be finalized.
As a seller who is upside down, if you cannot pay the balance in full then you may want to consider renting the unit out.
Aruba and Hawaii are two great locations to book something for rental purposes. Often, these rentals will go a long way in covering your maintenance fees while you are paying down the loan balance.
If any loan is paid in full, but you are behind on maintenance fees, you will first want to check with the developer to find out about the status of your current and future years usage. Many times, if the delinquency is too great, it will impact a buyer’s ability to use it in either the current, or next year's use interval. This will have an impact not only on the price your timeshare will sell for, but also on dues reimbursement.
Be warned though, the developer’s rep will often encourage you to take actions which could hurt your bottom line from a sale. Better to just listen and not act until you speak with a qualified broker who does not charge upfront fees.
What Should I do If I am Not Ready to Sell Yet?
From renting to depositing, some obvious and not so obvious choices.
Maybe you are ready to sell, but your children are still deciding if they want the timeshare. Maybe you want to wait a few more years. When you are not ready to sell your timeshare, there are several alternatives.
First, you could locate a broker who has a robust rental program. Again, you don’t want to pay any money upfront for this service. An expert can show you proven rental strategies that can give you the best shot of paying most, if not all of your maintenance fees. Sometimes, owners are able to net a few bucks more than their fees.
If you are financially secure, and take joy in helping others...you may want to consider donating your vacations as a fundraiser for a worthy cause like in a silent auction. You would still pay the maintenance fees, but might feel better taking this approach rather than letting it go to waste. Note that you are not advised to give your timeshare to charity...no reputable charities take timeshares. They want to avoid maintenance fees too. The only “charities” are most likely to be scammers. Legitimate charities stopped accepting timeshare donations in the 80’s.
Maybe you could give the gift of a wonderful vacation to a good friend, employee or to a spiritual leader who has made an impact on your lives. Maybe you could convert your timeshare use into points.
Marriott has Bonvoy points that can provide different benefits like discounts on airfare, rental cars, hotel stays. Have you called your resort to find out if you can bank your use into the following year? If you own Marriott Destination Points, you could do that. If you own a legacy week, you probably won’t be able to bank, but would be able to deposit into Interval instead.
Alternate strategies for using your timeshare are not ‘one size fits all’. The best course of action you could take largely depends on your financial situation, health, age, and the timeshare product you own. Consulting with a trusted and true resale broker who does not get paid upfront would be a wise move until you’re ready to sell.
