Saturday, January 05, 2008

Selling Your Timeshare: The Awful Truth

I hate to be the bearer of bad news but selling a timeshare is very, very difficult and in some cases almost impossible. Since you are reading this you are likely in the market to sell your timeshare, so please read on for some very enlightening information!

Why is selling a timeshare so tough?
The main reason is supply and demand. The supply of timeshare resale's greatly exceeds the demand for resale's.

Do You Remember how you got involved in timeshares?
It was probably in response to a promotional offering with some type of free gifts or vacations. Then, you where probably only informed about the developer's property and prices. Nothing at all about resale's, even if they were available at the same resort. The developer spends between $2,000 to $5,000 just to sell each unit at a new resort. Then because of their over inflated prices and high pressure sales tactics, many people buy without really knowing what they are getting involved in. Being shown a book full of 1000's of resorts and being told they could trade to any of them they wanted. No wonder so many timeshare owners get discouraged and want out.... creating the glut of supply.

My first timeshare presentation
I know my first presentation was for a Free telephone to view what turned out to be a less than desirable resort, where all the salesman talked about was all the other great resorts I could trade for. He even said I would never have to use their resort which was actually a rundown converted hotel, but just trade to all these other places ( spending almost 30 minutes just pointing out wonderful resorts in the RCI book) anytime I wanted. Fortunately, I smelled a rat and didn't buy there. So I know where many of the bad feelings and disillusioned timeshare owners come from. Especially, after finding out that not only could they not trade into all these great resorts but if they wanted to sell their units they would probably only get about half of what they paid for them and that was if they could find a buyer. So much for the great real estate investment angle to the sale presentation.

The Demand Side
Unfortunately, the demand side is just as bad for timeshare resellers. Most people don't even know there is a resale's market available until after they buy from the developer. Those who do know about the resale market are usually the more experienced timeshare owners and are only looking for real bargains.

Factors in Selling
So where does that leave the timeshare reseller! Of all the factors (price, location, time of year, amenities, quality of resort, advertising etc.) that determine if and when a timeshare will sell, you can only control two factors .....Advertising & PRICE! Unfortunately you can't spend $1000 on dinner and gifts for your prospects as the developer did for you. The developer is spreading his cost over 100's or 1000's of units and is inflating the price to cover the cost ( which he can get because new buyer don't know any better). On the other hand, you are trying to sell just one unit to someone who knows about resale's, is educated about timesharing and is comparative shopping among hundreds of like offers available.

So what do you do?
First you must price your unit competitively if you really want to sell it. Check the prices of other resale's at your resort (the closing sales prices, not the for sales listings), see what the final prices was at the auctions and contact resale brokers for more pricing info about your unit. Check prices listed on our Classified ad section and what other broker might have your units listed for by other sellers. You are competing against all those other sales listing. Think about it from the buyers point of view, they are looking for the best deal and if you want to sell your timeshare, yours must be that best deal!

Then you must use cost effective advertising to inform the public of your offer. If you are reading this article it means you have computer access to the Internet. Post as many ads as you can on the FREE Internet newsgroup sections which will allow it ( marketplace, alt.for.sales, etc.). Many new web sites offer free classified ads when they start-up. Most of the On line services (Prodigy, AOL, MSN, Google etc.) have free or low cost classifieds. Our TUG classifieds is probably one of the best places for timeshare ads (only $10 for a three month ad ) because everyone who reads it is interested in timeshares either for sale or rent ...a major plus. Also check out Ebay and craigslist which have become a very popular place for selling timeshares!

More Advertising
Also contact your home resort, see if they have a public bulletin board in their lobby or elevators where you can post a for sale note ... this is very good because any renter using the resort who likes it will be interested in your offer. Check on posting an ad in the resort's newsletter, many happy owners are looking for extra weeks at their home resort if the price is right.

Resale Brokers
Timeshare resale brokers (deal only with licensed real estate brokers, there are over 20 currently advertising in our Business Ads section ) can also get you more exposure but you must pay for it. They will charge either an up front fee and/or a commission on the sale. Remember, you are paying for the extra exposure and their services, if you are ask to pay an upfront fee get a written listing of the actual service they are providing for that fee. We recommend that if you are dealing with a timeshare broker that you do it on a commission only basis. That way they will get paid from the proceeds of the sale, just like every other real estate broker. Remember pricing is the only thing you can control, if you do not price your unit right ... no one will ever be able to sell it for you. One of the reasons some brokers charge an up front fee is too many owners want to list their units at prices higher than the market and they will never sell. Maybe, the broker should tell them it will not sell at that price and have their listings refused instead. No one wants to hear the real truth. So instead, they will go on for months and even years of not selling their properties, until finally they start asking for a realistic fair market price.

I see ads on our TUG classifieds that are just unreal, but for little or no cost, most feel they might get lucky. Then after 3 months of advertising when it comes time to renew, they wonder why they didn't sell their units or only got a few, if any responses from their ad.

Scams and Semi Rip-Offs
There are many rip-offs in the timeshare resale area with companies asking for $100 to $500 in upfront advertising, listing or appraisal fees. There should be no need for an appraisal to sell your timeshare. Any timeshare company that is doing their job will be able to give you a good idea as to what similar units are selling for. The only legitimate need for an appraisal would be for estate purposes or charity donation records.

Be very careful about companies wanting to buy your timeshare for their own use and want you to get an appraisal from an independent appraisal company that they recommend. Several of these companies ripped off millions of dollars in appraisal fees before they were finally caught. The state of Florida and many others are trying to make this illegal. The best way to check on a company would be on our TUGBBS online forums . If it sounds too good to be true, it probably is.

Now You Know
I know this article is or can be very depressing for those trying to sell their timeshares, but hopefully by knowing the truth about the real situation, you will be able to act accordingly. Whether that means just keeping your units and learning how to best use them, or trying to price them more realistically and increase your avenues of more low cost exposure. Some are offsetting their expenses by renting out the use of their timeshare while they try to sell it. Others are even donating them to charities and taking a tax write off ( there is another article in our Advice section on donating timeshares to charities ). At least now someone has been honest with you about the timeshare resales and you now know where you stand and what must be done.

We would again like to thank you for your continued support of our Users Group. The TUG web site has been a major break through for TUG members and all timeshare owners. It has become the most active timeshare website on the Internet with over 100,000 hits per day. Take advantage of this exposure by advertising your units on our website, but be realistic about your price. Most resale's are lucky to get 50% of what they paid if they bought thru the resort initially.

Now that you have gotten an introduction into what you can expect when entering into this process of selling your timeshare, your next step is to read the "How to sell your timeshare" living article on the TUGBBS forums located here:

This thread is an absolute MUST READ for anyone even thinking about selling their timeshare, it is the culmination of hundreds of other timeshare owners just like you who have been in this position and have provided you all the advice they wished they had when trying to sell their first timeshare!

Even if you choose to not become a paying TUG member for access to the ratings and reviews, be sure to register on the TUGBBS online forums, it is absolutely free and is the #1 place on the internet for timeshare help and advice! No question goes unanswered, remember there are 19,000 other timeshare owners just like you who have all had to ask the same questions you have now! Utilize their knowledge so you dont make the same mistakes!

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