Posted on September 04, 2023
When you are looking for vacation ownership products and programs, timeshares come up in your search. The concept sounds idyllic: owning a week or two at a fabulous resort and guaranteeing your annual vacation spot.
Once you dig deeper, you'll see that the resale market for timeshares is a lot cheaper than buying a timeshare directly from the developer. This discrepancy in price often makes potential buyers pause and wonder: why are timeshare resales so cheap?
There are several reasons why timeshares are so discounted on the resale market compared to the much higher prices charged at the resorts. Most of the disparity is because of the way the product is sold at the resort, but there are other reasons as well. Let’s take a look.
When you buy timeshare directly from a developer at the resort, you are not just purchasing the property; you are paying for the marketing program that often includes free tours, meals, marketing presentations, and other perks aimed at selling the experience.
Resort developers spend a considerable amount of money on marketing and sales efforts, and those costs are inevitably passed onto the buyer. Therefore, the initial price you pay includes not only the property but also a markup for these associated costs.
Unlike traditional real estate that can appreciate over time, timeshares most often depreciate. This is partly because the initial cost includes elements that do not hold value, like the marketing and sales costs mentioned earlier.
The allure and novelty also wear off after the property has been around for some time, especially if a resort does not continually upgrade its facilities. Timeshare resales may not offer the "brand-new" allure that you get from a developer, making it less expensive.
When you buy from a developer, you may find there's a minimum price that they cannot reduce. After all, they have set costs they need to recoup.
On the resale market, however, the seller might be motivated to get out of their commitment for various reasons such as a change in financial status, lifestyle changes, or even dissatisfaction with the timeshare experience. This motivation to sell quickly often translates to a much lower price, reinforcing a buyer's market.
In the timeshare resale market, there are usually no commissions to sales agents if you are using a specialized online timeshare resale advertising firm such as BuyaTimeshare.com. Even if a buyer uses a timeshare broker, commissions are significantly less than what's charged in the primary market. This saving is usually passed on to the buyer, contributing to a lower purchase price.
The timeshare market for most resorts often has more sellers than buyers, particularly for less popular locations or off-peak weeks. The excess supply leads to reduced prices, as sellers try to make their timeshares more appealing to potential buyers. If you're a savvy buyer, you can leverage the oversupply to get a more favorable deal.
Economic downturns have a significant effect on owning a timeshare, especially if an owner still has a mortgage on the original purchase. During recessions, many people look to offload their timeshares to alleviate financial stress, leading to an influx of units on the resale market and subsequently driving down prices.
Many times, sellers are emotionally motivated to sell their timeshares quickly due to a change in life circumstances, like divorce or the loss of a loved one with whom they used to vacation. This urgency can result in an even more reduced price on the resale market.
As the annual billing cycle for maintenance fees approaches, some sellers become increasingly motivated to offload their timeshare obligations. Some owners, perhaps struggling with financial constraints, may look to sell their timeshares quickly, often settling for significantly lower prices.
Timeshares that are popular only during specific seasons (like ski resorts or beachfront properties in the northeast) often see greater overall depreciation than those in year-round destinations, further pressuring down resale prices for certain times of the year.
Over the years, timeshares have garnered a somewhat negative reputation due to aggressive sales tactics at the resorts, hidden costs, and lack of resort exit strategies. This perception can spill over into the resale market, as the stigma surrounding timeshares can affect the marketplace, driving down prices.
Savvy buyers who enjoy the product can leverage this to get great deals on a timeshare.
With the increased availability of information via the internet, consumers are now more informed than ever before.
The impact of the internet cannot be overstated, as online platforms allowed buyers and sellers to connect and transact apart from developers, forever changing the industry.
This informed consumer base often realizes that the resale market offers better value for money, subsequently diverting buyers away from timeshares sold directly by developers and pushing down resale prices.
The timeshare resale market has created a whole industry dedicated to helping owners sell their timeshares. These companies often have more flexibility in pricing and can offer timeshares at significantly reduced rates. However, this also raises the issue of potential scams or fraudulent practices, and buyers should proceed with caution.
Using reputable platforms with longevity such as BuyaTimeshare.com can minimize these risks.
While buying a timeshare resale can be much cheaper, due diligence is still needed on the part of the buyer. For instance, the maintenance fees could be overdue and would need to be paid before the resort or management company would approve the sale.
It's crucial to do your research, such as asking for documentation on maintenance fees and the property's condition, before making a purchase.
Even though the purchase price of a resale timeshare might be low, other financial considerations can come into play. Transfer fees and closing costs can add up. These costs are not always apparent at first glance and can make a seemingly cheap timeshare somewhat more expensive during the purchase process.
Timeshare resales are cheaper than buying directly from a developer due to several factors like the initial markup for marketing and sales, economic conditions and the dynamics of supply and demand. While resales are a bargain, buyers should still conduct thorough research to ensure they're getting a deal that suits their vacation needs and circumstances.
If you can navigate these factors wisely, you will find that a timeshare resale is a much more affordable route to securing that dream vacation spot.
Using the platform of BuyaTimeshare.com is a great place to begin your research – all from the comfort of your personal space without the pressure and sales tactics found at the resorts.
Just search for your favorite resort or destination by entering the name in the search field at the top of the page, then click on the relevant option provided by our system in the dropdown menu. You’ll be taken to the page with timeshare choices and can begin the conversation online with timeshare owners through our anonymous, data-protected platform.
If you have any questions or need more help, give our Customer Care team a call on 800-640-6886.
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