Buying and Selling Timeshares
In the current market, finding and buying a timeshare is easy. Selling one is a different story altogether. Below are some tips for each that could help.
Looking for a timeshare or long term holiday product?
You won’t have a hard time finding one. The Industry Association says there are 197,700 timeshares at 1,548 resorts, and 8.1 million “intervals” under ownership. An interval is usually defined as one week at a holiday resort, sometimes more.
But while getting into a timeshare will prove easy, don’t expect the same when it’s time to get out of of it. Timeshares often plunge in value. Plus, the resale business is riddled with badness and when economic times are tough, that’s the toughest time to sell.
First, if you’re thinking of buying a timeshare
1. Skip the developers
You can buy a timeshare for a fraction of its initial value – sometimes pennies on the dollar – if you buy through an owner rather than the development company. Use recomended timeshare resale sites.
2. Pay in cash
The interest rates on timeshare mortgage loans typically run higher than traditional mortgages – between 12%-18% on average, according to Professional Timeshare Services. But the main reason cash is king is resale: Like a car, the vast majority of timeshares depreciate in value. Which means, like a car, a big loans means you’ll probably be upside down and unable to get out.
3. Understand the extra costs
You won’t stop paying for your timeshare when sold. Most timeshares come with annual maintenance fees that run into hundreds of £ annually. In 2010, timeshare holders in the UK paid an average of £631 a year in maintenance fees overall. And don’t forget travel: Plane tickets to and from your timeshare resort could also add hundreds to the cost.
4. Don’t buy with a plan to sell
Only buy a timeshare if you expect to hold onto it. Timeshares don’t appreciate – in fact, depreciation is the norm. It’s unlikely you’ll get more than your purchase price, and odds are good you may not be able to sell it at all. Before you even think of buying, read as much as you can.
Now let’s tackle selling
1. Sell where you bought
Some timeshare companies have a resale program. Others may provide you with a list of interested buyers. But most won’t help you at all. These people are in the business of selling new units, not helping you to resell yours.
2. Sell to other owners
Ask the timeshare company who has the “interval” in your timeshare before and after you. Offer to sell your time to those owners. They may want to buy the timeshare from you to extend their stay.
3. Use a local broker
A member agent might sell your timeshare for you, but you’ll probably pay a higher commission rate than you would on the sale of a house. According to some timeshare re-sellers, they may charge you a commission fee of 10%-30% or a fixed fee. Before you sign up with a re-selling agent, ask about the agent’s marketing plan and experience. You should not pay any commission to an agent who will only post an ad online, since you can do that yourself. Look for a licensed agent experienced in selling timeshares.
4. Sell online
You can sell your timeshare online yourself. Some websites specialise in reselling timeshares.
Post a free classified ad on a local buying and selling site like Craigslist or the online classified section of the local newspaper where your timeshare is located. By posting an ad in the timeshare’s location, you’ll attract buyers interested in that area.
If you need to sell quickly, use an auction site like eBay. Starting an auction on eBay costs £50 – including a £20 insertion fee and a $20 final value fee. The auction can run from 1 to 10 days. Here are some tips for writing that ad…
Find your selling point: Research other timeshares and hotels in your area and find something your timeshare has that other holiday options don’t. Use that as leverage when you post an ad. Make your timeshare stand out and you’ll draw in more buyers.
Price competitively: As timeshares in the same resort can be nearly identical, check local ads for other timeshares for sale in your building and price yours lower. When buyers have several to choose from, they’ll obviously choose the cheapest unit first.
Time your sale: List your timeshare a month or two before the start of the holiday season. That is when the majority of buyers will be looking and you stand a better chance of selling your timeshare quickly.
5. Watch out for scams
Timeshare resale scams are always widespread, but scammers really start coming out of the woodwork during tough economic times. Watch out for resale companies that offer to “take the timeshare off your hands” or want large sums of money upfront – they’re likely a scam. For other companies, do your research before signing up.
If you want to buy a timeshare, make sure it’s something you’ll be able to use, enjoy, and afford for life. And if it passes that test, don’t buy it from a high-pressure on-site salesman. You’ll find plenty of hapless people willing to sell cheap.