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An Overview of the Timeshare Secondary Market
Protect your rights in the timeshare secondary market. Experienced Timeshare Defense Attorneys on your side. Get a free consultation now!
What Is the Timeshare Secondary Market?
The timeshare secondary market is the area of real estate where a seller or buyer can purchase a pre-owned timeshare unit. Referred to as the resale market, it can allow sellers to recoup some of their original investment. At the same time, buyers can purchase a timeshare at a discount compared to buying it new.
This resale market can be a great alternative to purchasing a timeshare from the developer, as these types of transactions are often much more expensive and have strict rules that guide the purchase process. As such, the secondary market can provide buyers and sellers with more flexibility regarding price, payment structure, and other conditions of the sale.
The timeshare secondary market involves several players, including the sellers who own timeshare properties and have decided they no longer want to own their timeshare. This could be because they can no longer afford the annual fees related to the property, may have prioritized other expenditures, or may even no longer like the idea of yearly holidays. Some others may have accepted ownership of timeshare property left to them in a will and want to sell the timeshare for cash.
The timeshare buyers are typically people who are bargain hunters. To them, it makes no sense to buy timeshares directly from developers at a massive premium when they can spend a lot less on the timeshare resale market for similar benefits.
Another critical player in the timeshare resale market is the timeshare resale specialist. These people deeply understand how timeshare transactions work and can help buyers and sellers navigate resale. This includes determining a fair value for the timeshare, negotiating prices, and helping guide the buyer and seller through contracts, legal paperwork, financing options, title transfers, and more.
Whether you are a potential buyer or seller, having the right information about the resale market and how it works can help you get the desired outcome during the resale process. Read on to learn more.
How the Timeshare Secondary Market Works
The secondary market for the timeshare industry is essentially a buyer’s market. There are a few reasons for this. Typically, timeshare developers strongly discourage timeshare owners from selling their timeshare back to a third party since the company makes no money if it is sold to a third party.
The companies are also unwilling to implement buyback policies. In the rare instances that the developer is prepared to buy back the timeshare, they do so only at reduced rates – it’s common for a buyback price to be 70% less than the original selling price.
Of course, many sellers would prefer to lose less money, so they turn to the secondary market for a better deal. Although this is probably true, the low demand for second-hand timeshares and the fact that buyers know how hard it is to sell them ensures that the prices seldom exceed 50% of the original price. The bottom line is that timeshare resale values are low. This is a fact that you need to accept as a timeshare reseller.
If you need to get rid of your timeshare, you’ll likely have to lower your expectations and offer your property at a low yet market-related price so you can get rid of your timeshare.
The popularity of the secondary market isn’t just down to sellers’ low expectations, however. The timeshare purchasing process can also be complicated and lengthy. The sales process is often incredibly drawn out, with hidden fees and complex contracts that can cause headaches for buyers who don’t adequately understand the legalese.
The secondary market is also filled with various timeshare options from different brands, giving buyers many choices. Some of the top timeshare brands include Hilton, Marriott Vacation Club, Wyndham, Disney Vacation Club (DVC), and Westgate Resorts. Each brand offers unique benefits and payment structures that potential buyers should consider when shopping for a timeshare.
Benefits of Buying a Timeshare on the Secondary Market
The primary benefit of buying a timeshare vacation ownership on the secondary market is that it’s cheaper than buying it directly from the developers.
Many timeshare owners are desperate to get out of their timeshare agreement due to the expense of crippling annual maintenance fees and costs for something many of them no longer use.
They are in a difficult position, especially since stopping payment on the timeshare costs could mess up their credit rating. So their only choice at that point is to transfer their liability and ownership to someone else who can afford it via a sale. Hence they are willing to accept a meager purchase price.
Another benefit for buyers is that they are not subject to the pressure selling techniques and lengthy timeshare presentations that timeshare developers typically use to make sales. Buyers are in a position of power when dealing with second-hand sellers. They can pick and choose from the many timeshares available on the market at their leisure from the comfort of their homes. This is because most resale timeshares are put up for sale on online platforms.
Buying a timeshare on the secondary market is, therefore, a cheaper and more convenient way to ensure the certainty of your annual holiday.
Should You Buy a Timeshare on the Secondary Market?
If you have decided that you want in on the timeshare holiday bandwagon, then buying a timeshare on the resale market is an excellent option from a price perspective, and you can save money.
One word of caution – thousands of timeshare resale scams are happy to separate you from your money without giving you anything in return. Please research when dealing with sellers or companies that purportedly represent sellers. Do not pay any upfront fees, and try to use the services of experienced timeshare lawyers who can easily spot suspicious behaviors.
Also, you must understand that your timeshare purchase is not an investment and will not appreciate. Many timeshare companies prevent the transfer of certain original-owner perks to secondary market buyers, so you need to ensure that you get what you think you are paying for.
Renting a timeshare directly from an owner for a fixed week can also help you save hundreds of dollars, so it is something you could consider. It might be a good idea to rent before purchasing a timeshare to see if it’s a good fit.
Where to Buy a Timeshare on the Secondary Market
A Google search online can reveal several options for purchasing a (resale) timeshare. There are various options, from fixed week timeshares to vacation clubs, timeshare points, multiple owner options, and floating weeks options. Many options are available, whether you choose a home or a resort, a points-based system offering more flexibility or any combination of the above.
To ensure quality service delivery, ensure that the resale company you choose is a member of the American Resort Development Association (ARDA). ARDA membership is a good way to establish the credibility of the resale company.
How to Avoid Timeshare Resale Scammers
The timeshare resale industry is replete with thousands of scammers who prey on desperate sellers who need to dispose of their timeshares quickly.
So, if you’ve put your timeshare up for sale and you get a call from someone who offers to sell it for you or guarantees that they have a buyer, you are probably talking to a scammer. Please do not give them your financial or credit card details under any circumstances. Avoid them at all costs.
It is generally a good idea to beware of anyone who offers you an unbelievable deal. Make sure you research market prices so you know what is reasonable. Also, familiarize yourself with the legal process surrounding this type of transaction. Running the sale through a timeshare attorney is always a good idea. So do not hesitate to reach out to one!
Also, watch out for strange behavior on the seller’s part – legitimate timeshare brokers and licensed timeshare resale agents will be professional, answer all of your questions, and deal with all the intricacies of the sale.
Finally, don’t avoid the fine print – it forms part of the contract. It is essential to clarify who pays closing process costs and fees for new deeds or other legal documents.
Do I Need a Timeshare Lawyer to Navigate the Secondary Market?
Although you can buy and sell a secondary market timeshare property independently, you’ll likely benefit more if you employ the services of timeshare attorneys in Florida, who understand the market and are familiar with the industry’s nuances. This way, you can ensure that your interests are always protected.
Timeshare Defense Attorneys can help you with your secondary market timeshare transaction. We can help you navigate the resale process from start to finish and protect you from adverse contractual clauses and fraud. Get in touch with us to schedule a free initial consultation and assessment. We would love to help.
