In-depth Understanding of the Timeshare Resale Business

In-depth Understanding of the Timeshare Resale Business

It has survived attacks by fraudsters and mediocre developers because the product is of such high quality. It has matured to the point that the big timeshare players will be the Hiltons, Marriotts, Hyatts, and other hotel chains from this point on. Timesharing is effective! The vast majority of those who possess them are enthusiastic about them. On the other hand, not everyone is able to maintain them indefinitely.

The fact that developers were cranking out practically millions of new timeshares was completely overlooked, as was the question of what would happen if someone wanted or needed to resell them. Currently, a technique of resale is in the process of being implemented. Unfortunately, it has been much too long in coming. Prices decrease in a market vacuum, and when there was no mechanism in place, individuals would attempt to sell their timeshares, fail, lower the price, and attempt to sell once again. What would stocks and bonds be valued at if the New York Stock Exchange didn't exist any longer? In the end, prices for timeshare resales dropped to absurdly low levels as a consequence of this phenomenon. The majority of resale homes are now priced at about a fifth of their replacement value (roughly 75% off).Let's face it: we're in a bind. Timeshare resales offer one of the most significant consumer deals available today.


Is this a sign that the general population overpaid for the timeshares they purchased from the development companies? No, not at all. Many years in the industry have taught me that there are very few timeshare developers that make a lot of money. Anyone launching a new enterprise nowadays must price it quite high in order to recoup his or her initial investment and, perhaps, earn a good return on the project. For starters, the expense of introducing a new product is quite expensive. Those freebies you received when you attended the timeshare presentation are still fresh in your mind. What's more, guess what? They weren't given out for free. The expense was already included in the pricing. Sales and marketing expenses accounted for almost half of the cost of a new product. The second most important aspect was the availability of funds. The lenders were the ones that earned the most money out of timesharing transactions. Because of economies of scale, hotel chains do not have as big a marketing budget as smaller businesses. Furthermore, they are responsible for the majority of their own finances. In the event that you have priced such a thing, you will discover that it nevertheless sells for two to three times the price of secondhand products.

Unfortunately, some of the fraudsters who remained from the original firm saw an opportunity to make money by preying on timeshare owners who were in the process of selling their timeshares. The system was straightforward. They would contact the owners of timeshares and inform them that their timeshares had been sold for a substantial amount of money and that they would complete the sale as soon as they received $350, $500, or $3,000 as a down payment. They would shut their doors and go to another country, where they would begin the process all over again as soon as they acquired sufficient funds. They were difficult to apprehend. Some success has been made lately, and some of them (far too few) are currently in jail as a result of the efforts. The simplest answer for you to this dilemma is to just refuse to pay any up-front sales commissions. You will be correct the vast majority of the time. The payment of minimal advertising costs is, of course, permissible under the circumstances. If you want to try to sell your timeshare on your own, you'll need to do some special advertising in addition to placing an ad in the newspaper (which will not work for timeshare resales). If you are paying more than $100 for such services, you are almost certainly overpaying. One genuine resale broker, for example, runs auctions for his inventory. He charges up front for the auction hall and advertising, since the auctioneer costs him the same fees that he charges for the auction hall and advertising.

We, along with others, saw the necessity to establish a lawful manner of resales. This timeshare sub-industry is just in its infancy at this point. So, what is going to happen next? We've already seen it in action. Pricing increases will occur as the resale business grows more efficient, as it exerts more and more upward price pressure, and prices will rise! We've seen a significant effect in the resorts where we're working, and we expect this to continue. The vast majority of the very low-priced timeshares have already been resold. It's a lot like picking apples in the fall. You shake the tree and take the apples out of it. You'll have to shake the tree more harder the next time. Two things will happen as a result of the increase in pricing. The sellers will not be forced to suffer such a large loss, and the purchasers will not be able to get such favorable terms. It seems that the general population is beginning to grasp this concept. Only in the past few months have we noticed a significant increase in the amount of business we do.

It's important to remember that holding on to your timeshare until the prices increase has no actual negative consequences as long as you are using it, renting it, or otherwise gaining value from it. In contrast, if you are not using it, it is similar to the retail industry where the lowest price is the least expensive price to discount. Although the price will rise, it is extremely improbable that it would rise at a quicker rate than the accumulation of homeowner's dues and taxes. As a consequence, it is preferable to just accept your losses and sell the property as soon as possible.

If you are a prospective buyer, on the other hand, don't waste any time! You have the option of purchasing a timeshare now at these outrageously cheap prices, or you may wait and pay more later for the same product or service. It's all up to you.

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