If the price of a timeshare resale surprises you, you’re not alone. Compared to the average cost of a vacation ownership bought right from the developer, the cost of timeshare resales is shockingly low. But why? Timeshares were initially created to be lifetime vacation assets, allowing owners the peace of mind to enjoy pre-booked vacations at their favorite resort destination. This way, timeshare owners could enjoy yearly vacations without the hassle of planning. However, as the fixed-week model of timeshare ownership aged out, and owners wanted more flexible vacation options, the timeshare resale market was born. But why are timeshare resales so cheap? Continue reading to find out.
What Is Timeshare Resale?
Before we get into why timeshare resales are so inexpensive compared to retail timeshares, let’s go over some timeshare industry basics. First, just what is a timeshare resale? A timeshare resale is a timeshare for sale by the owner, as opposed to one for sale by a resort or vacation club brand. Now, why would an owner want to sell their timeshare? Some owners may be unable to use their timeshare anymore due to life changes. They may also no longer be able to afford the annual maintenance fees or simply want to broaden their travel horizons outside of their singular resort or resort portfolio. Luckily for resale buyers, these owners often turn to the resale market to sell, providing you with great deals on ownership.
What Is the Timeshare Resale Market?
Sometimes, resorts offer attractive buyback programs or simple deed-back programs, where the owner returns ownership of the timeshare to the resort. However, some resorts do not offer these options, or if they do, they don’t take every owner’s interest back. When this occurs, vacation owners who no longer want their timeshares often put them on the resale market. This usually means a little money back in their pocket and freedom from their ownership responsibilities. Moreover, vacation owners who want to sell their timeshare have a few options. They can list it with a real estate broker based in the resort location (with timeshare experience) or let a company specializing in timeshare resales advertise the timeshare to potential buyers. Timeshares sold through either of these methods are part of the timeshare resale market.
Right of First Refusal
Whether you’re looking to buy or sell a timeshare resale, keep in mind: every resale is subject to the right of first refusal. In short, the right of first refusal is the right of the resort to step in and buy back the timeshare, as stipulated in the initial purchase agreement. Immediately after a timeshare resale receives an offer, it will go through the right of refusal process. One of two outcomes will follow: the resort will allow the sale to go through, or they will buy back the timeshare.
If the resort chooses to exercise the right of first refusal, it can be a disappointing blow to the buyer. The company facilitating their purchase can usually find a comparable resale at the same resort. However, when a resort exercises the right of first refusal on one resale, it usually means they are currently buying back all resales.
For the seller, however, nothing really changes. As per the right of first refusal clause, the resort must honor all the terms of the sale. For example, the original buyer agreed to pay all liens, closing costs, or the rest of the mortgage. Then the resort would have to instead. The only things that will change for the seller are the buyer’s names and the title company, as listed on the contract.
Why Are Timeshare Resales So Cheap Compared to Retail?
Now that you know more about timeshare resales and the process of buying on the secondary market, we can get into the meat and potatoes of this blog. So, why are timeshare resales so cheap compared to retail prices? Let’s dive in.
Resorts Have to Spend a Lot to Make a Lot
Savvy buyers know that shopping on the resale market is a great way to save money on their timeshare purchase. But why is a secondhand timeshare so cheap compared to a direct-purchase timeshare? After all, secondhand timeshares aren’t second-rate products. Resorts go to great lengths to maintain their units and, by extension, their brands’ reputations. Not to mention, used timeshares usually come with many of the same benefits as retail timeshares.
The main reason timeshare resale prices are so cheap compared to retail timeshares is the cost of selling a new timeshare; the marketing and sales costs of a retail timeshare often inflate the overall cost of a vacation ownership. Similar to a car dealership, most resorts spend a lot of time and money on advertising their timeshares. In addition to online marketing, this can involve offering free weekend stays during which prospective buyers tour the property and attend a timeshare presentation. When a sales representative lands a sale, the resort also pays them a sales commission. These marketing and commission costs are recouped in the price of the timeshares sold by the resort.
Alternatively, sellers can choose the selling price for their timeshare on the resale market when using advertising companies like Timeshares Only. The best way to determine what your timeshare is worth is by looking at what other ownerships similar to yours are going for on the resale market. You can explore the price points of individual resales by looking at factors like your home resort, unit size, season of use, etc. Still, the cheapest timeshares don’t mean they are any less luxurious than retail timeshares.
Negotiate for Cheapest Timeshare Resale Price
So, why are timeshare resales so cheap? There is another reason why buying on the resale market often gets you the cheapest timeshare deal: negotiation. You typically cannot negotiate the price of a direct-purchase timeshare. Resorts need to recoup their costs, and for brands like Disney Vacation Club, there is a market demand for ownership. Moreover, even if they agree to decrease the price, it won’t be by much. However, negotiating the price of a timeshare purchased on the resale market is much easier.
Most often, timeshare owners post their timeshares for sale because they are looking for an exit. When the existing owner is motivated to exit their timeshare, new buyers often find they have room to negotiate the price. On Timeshares Only’s resale market, some owners even state that their price is negotiable. This way, you can get the cheapest timeshare price possible.
A Timeshare Is Not a Financial Investment
Unlike a piece of traditional real estate, a timeshare typically will not appreciate in value over time. Like a car, timeshares are most often a depreciating asset. This is especially true for direct-purchase timeshares, largely due to the markups we discussed earlier. Sometimes, timeshares from highly popular brands or resorts, such as Disney Vacation Club, or timeshares in highly popular locations, can appreciate over time. But these are rare exceptions to the rule. In general, you should think of a timeshare as an investment in your quality of life, not a financial investment.
Timeshare resale prices usually reflect their depreciated value; otherwise, they can’t be competitive. Thus, the timeshare resale market offers buyers real value for their dollar.
Internal Exchange Restrictions on Timeshare Resales
Some timeshare brands offer their owners internal exchange opportunities. With internal exchange, timeshare owners can stay at multiple resorts within their brand. Marriott Vacation Club, Grand Pacific Resorts, and Club Wyndham are all examples of brands with internal exchange programs. For example, a Marriott Vacation Club owner could use Abound by Marriott for a tropical escape at Marriott’s Kauai Beach Club one year and a mountain getaway at Westin Riverfront Mountain Villas the next.
However, many timeshare companies place club restrictions on resales to dissuade buyers from purchasing their timeshares on the resale market. These can include internal exchange restrictions. These undesirable restrictions on exchange and other perks are reflected in the pricing of timeshare resales, allowing them to be the cheapest timeshare option.
Exchange Restriction Hacks for Timeshare Resales
Luckily, there’s a way around these exchange restrictions for timeshare resales. There are external vacation exchange programs that allow you to trade your ownership for stays at resorts within the network’s collection. The two leading vacation exchange networks are RCI and Interval International. These networks are affiliated with top timeshare brands and offer members stays at thousands of resorts and hotels worldwide. First, pay the annual fee to become an RCI or II member. Resale and retail owners are both eligible for membership with these exchange companies. Then, trade your ownership for a vacation of comparable value on their platform. Learn more about RCI versus II today.
So, a resale owner could technically use their external exchange membership to trade for an otherwise restricted resort in their internal exchange network. Exchange restrictions and the price of hacks, like external exchange membership fees, are definite things to consider before you buy a timeshare resale. However, many find the net savings of buying on the resale market worth it.
Buy the Cheapest Timeshare Resales with Timeshares Only
So, why are timeshare resales so cheap? We hope we’ve answered your question. If you’re ready to become a new owner for less, then start by browsing our timeshare resale market! When you buy a timeshare resale, you can save thousands versus buying directly from the developer. We have thousands of the cheapest timeshares for sale in our inventory for a fraction of the cost of retail. You’ll even find timeshares from top brands like Holiday Inn Club Vacations, Hilton Grand Vacations, Club Wyndham, and more. Browse our resale marketplace today, and make your vacation dreams a reality for less!
Advertise Your Timeshare for Sale with Timeshares Only
On the other hand, if you’re looking to be rid of your ownership, consider selling your timeshare with us, Timeshares Only. Whether you’re no longer interested in vacationing due to lifestyle changes or maintenance fees are piling up, the timeshare experts at Timeshares Only are here to help you get your timeshare off your hands. As ARDA’s Recommended Reseller, we adhere to strict regulatory guidelines to protect you and the industry from scams. We market your ownership to an extensive client base, getting thousands of interested eyes on your timeshare. Learn more about how to sell a timeshare today, or talk to one of our resale industry professionals by calling us at 1-800-610-2734.
