How to Buy a Timeshare
The Internet has been the great equalizer for many industries around the world, allowing niche markets to thrive through global promotional opportunities unparalleled prior to the creation of the web.
With this promotion also comes the ability for prospective buyers to conduct research and buy products with a new level of transparency and consumer input. Nowhere has this dynamic had more of an impact than on a consumer's ability to discover how to buy a timeshare on the open market.
Before the advent of the online timeshare marketplace, potential buyers were limited to attending sales presentations at timeshare resorts or looking at options from a real estate broker. Perhaps a resort had a bulletin board organized by the resort manager where owners could post their timeshare for sale, hoping that someone walking by would notice and contact them. In this scenario, the developer or the resort management had control of the process and was the gatekeeper for the information that affected the buyer's options.
That was Then ... This is Now
Following research on the internet, many prospective buyers continue to frequent resorts and take tours but they use these visits more as inspections to see if a certain resort or hospitality brand is worthy of their money. However, some unsuspecting visitors continue to be drawn in by good rental deals or vacation packages and, before they know it, they've signed on the dotted line and walked away with a timeshare purchase from the developer. In this case, they've spent more money than they should for the product.
Resorts = Commission
The important thing to remember when looking at how to buy a timeshare is the way the resorts operate and the added timeshare costs that come with buying directly from a resort. The resort has a team of sales people on staff waiting to show vacationers around the facility in the hope they will want to buy a timeshare. The problem is that those sales commissions are built into the price quoted at the resort, in addition to the marketing expenses that it took to get the consumer into the resort in the first place.
Sales and marketing expenditures are on average about 50 percent of the cost of a timeshare at the resort. It is similar to the experience of purchasing a car. For those customers looking to drive off the lot in a new car, they pay a premium price which will also cover the sales, marketing and commissions associated with that sale. A consumer looking at a pre-owned car will pay significantly less because the car has already been used by the previous owner - and without the sales and marketing costs.
Timeshare works in a very similar pattern - but with an important distinction. The "new" buyer who purchases at the resort is buying into the same resort that a resale purchaser is buying into. Many times the owner who bought from the developer is vacationing next to the owner who bought a timeshare resale. So why would someone pay more through the resort to stay in the same resort as the resale buyer?
Exactly - Why Would They?
This is the shift which has put the timeshare industry on its heels and why consumers researching how to buy a timeshare start the same way they research any other product - on the internet. This research reveals essentially the same products available online for significantly reduced costs because the owner is advertising the timeshare unit themselves, without the need to cover sales overhead. The problem is that many people are not introduced to the benefits of the product until they are already at the resort and may not know about the resale market until after they have purchased, then feel like they got ripped off. But that tide is turning.
According to figures from the American Resort Development Association, one in three consumers who purchase a timeshare do so on the resale market, up from 17 percent in 2010. This growth details a trend that will not slow down as consumers find out the significant money that can be saved by buying timeshare on the resale market.
Buy Smart from the Start
While there are a number of variables to consider when buying a timeshare, there are essential areas to analyze before entering into the process:
- Know who you're looking for - list the brands that you have vacationed with in the past and determine the style and feel of the vacation that your favorite brand provides. Marriott, Disney, Hilton, Hyatt, Wyndham, Bluegreen; whichever one it is, everyone has their preferences.
- Determine your vacation needs - Understanding how and when you vacation can make all the difference. Do you vacation in the summer, winter, spring or fall? This can have a significant impact on the price of a timeshare due to high or low demand times. Many timeshare resorts still use a color-coded system to rank seasonality:
Red = High demand
White or Yellow = Moderate demand
Blue or Green = Low demand
If you're not locked into a particular time of year, you may want to consider a floating time frame over a fixed time frame. Fixed will give you the same week each year, while floating allows for more flexibility. More timeshare companies are using points programs now as vacation currency, so you may want to check about the use of points and how that can impact your ability to vacation, as some programs allow owners to split their points allotments into smaller quantities to take shorter, more frequent vacations.
- Check the details - is the unit a studio, one bedroom, two bedroom, or a penthouse unit? Is it on the ground floor? Near the pool? Full kitchen? Does the resort have on-site restaurant facilities? This relates back to the "vacation needs" point earlier, as once you have determined your needs (ex: family of four needing two bedrooms) then you'll have a clearer idea of the type of unit and resort to meet those needs.
- Location, location, location - know the destination in which you are prepared to spend the majority of your vacations. Some people buy Disney timeshare because they go to Disney World in Orlando every year. Be happy with the location first but understand that the higher the demand for the location, the more valuable your ownership interest will be in the exchange marketplace.
- Keep exchange in mind - exchange is a great advantage to timeshare ownership, allowing the owner the option of placing their week into a program in exchange for taking a vacation in a different destination within that program. Some brands have internal exchange programs, providing vacation options at various resorts within the branded network. Other exchange companies, such as RCI, Interval International and DAE, have external exchange programs allowing for vacations beyond the resort's network.
- Comparison shop for price - as with most purchases, once you have a good idea of the product you're looking for then you can compare offerings from the available inventory at a specific resort.
- It's about the experience - timeshare is not a financial investment but an investment in vacations. The value of the product is in the use of the product, with 20 million owner households globally owning a timeshare. Owners understand that there is value in taking regular vacations, from a health, family and sheer enjoyment standpoint. Understanding this aspect of timeshare ownership will provide important perspective about the ownership experience.
Once you've determined the criteria for your timeshare, then search the available inventory on the BuyaTimeshare.com website. The search function is simple and will allow you to browse the advertised timeshares for sale until you find the one that fulfills your vacation needs.
A tactic that is very important is creating a free account through the Timeshare Pulse system, which will allow you to enter your search criteria into our system and properties matching your request will be automatically emailed to you to review. This gives you first chance at making an offer on that property before other online viewers have the chance to grab it.
Once you've found a property, you'll have the opportunity to make an offer on that unit. You'll see a "Make Offer" button that you'll click and a pop-up display will allow you to make an offer which will be directly emailed to the owner for consideration. Negotiation will take place until a price is agreed upon, with the owner providing the necessary purchase and sale agreement for signature. Much like a traditional real estate transaction, the process will then move to closing, often using a closing company to handle the details such as the recording of the deed and proper notification to the resort. Remember that buyers traditionally pay the closing costs for a timeshare transaction.
Once the transfer has been finalized, you will want to confirm your ownership with the resort and prepare for years of vacation enjoyment.
For more information on how a timeshare works, check out our beginner timeshare guide.
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