Do Timeshares Have Any Resale Value?

One of the big misconceptions about the timeshare secondary market is that there is no resale value for timeshares. The fact is that many timeshares hold their resale value quite well, but with all of the online confusion about the marketplace it is understandable that some owners would wonder about the timeshare resale value of their ownership.

The issue is more about how the industry is structured and who seeks to gain from stating that there is no resale market. There are basically two sectors of the business that benefit from such strategies:

• Timeshare exit companies – these companies distribute information online degrading the resale market because they want owners to pay them instead to supposedly transition them from their timeshare ownership.
• Resorts in active sales – discounted resales compete with the resort retail prices, so resorts would rather not acknowledge the secondary market with its lower resale rates. Plus, they would rather keep those owners in the fold and continue growing their owner base through their own sales efforts.

However, because of owners diligently seeking opportunities to sell and the emergence of the internet, a healthy secondary market has developed for timeshares that savvy buyers understand.

Is There a Resale Market for Timeshares?

We know that there is a resale market for timeshares because we see sales every week. Remember that Timeshare Broker Associates only gets paid after a sale is closed and the money is released from escrow. If there was no timeshare resale value, then we would be out of business rather than enjoying our 10th year in operation.

Just last year we saw more than $90 million in offers placed through our online platform – where prospective buyers send offers to sellers to begin the negotiation process. Our agents then become involved in the negotiation in order to get the best price for our clients and handle the paperwork, take deposits and manage items that can come up during closing.

The irony is that the timeshare resale market is the only true example of supply and demand economics in the industry. The resorts are built and then create a marketing machine that attracts prospective buyers, many of whom are being introduced to the product with no prior experience with timeshares. Through their onsite tour programs, resorts “create” demand for the product through sales tactics that have benefited the developers greatly.

Once the vacationer buys a timeshare and understands the product, they often go to the resale marketplace to either sell a timeshare or buy more of it. In fact, about half of all timeshare sales are sold to existing owners, with the American Resort Development Association recently reporting a 90 percent satisfaction rate among owners.

Is it a Buyer’s Market?

The online resale market is where sellers and buyers truly meet up; buyers seek out the listings, review the prices, and make offers like in any other business. Is it a buyer’s market? That depends on factors such as the individual resort, timeshare company, and price.

Assessing the resale market for timeshares is an inexact science at best because of the huge variety of resorts and destinations. Seasonality comes into play as well, since a July week in Cape Cod or a January ski week in Breckenridge can be in very high demand compared to a November week in Ocean City.

Association with a branded hospitality company is also an important factor, as brands such as Disney, Marriott and Hilton bring their own benefits that can support timeshare resale value.

Disney Vacation Club holds its value as well as any timeshare company in the world, leveraging its entertainment and theme park empire to drive demand to its DVC resorts. Depending on when Disney points were first purchased, the ownership may actually have increased in resale value to the point of turning a profit for the owner on the open market.

Regarding Marriott Vacation Club and Hilton Grand Vacations, the hotel loyalty programs such as Marriott Bonvoy and Hilton Honors offer additional ways for timeshares to be used in their respective programs, which can draw a buyer to a specific timeshare.

It is also important to understand that timeshare is a use product and should not be considered a financial investment tool. The industry uses the term “lifestyle investment” because the benefits of taking an annual vacation are in the health benefits of taking regular time off and building relationships with family and friends, not in turning a financial profit.

What is the Average Resale Value of Timeshares?

The range of timeshare resale value can be as wide as the Grand Canyon, with some sales going for as much as $24,000 for a Westin Ka'anapali Ocean Resort Villas North week 7 through to $25 for a Vacation Village at Parkway week 22 in Orlando. Some sales go for more; others can go for as little as $1 from sellers just looking to get out from under their maintenance fees.

Keep in mind that if a seller successfully sold their timeshare for $1 in order to move on from their ownership and get out from under their maintenance fees, that’s okay if the seller is happy with the sale. It still means there is a market for that timeshare and that resort just gained a new, maintenance fee-paying owner.

Because there is no MLS service for timeshares like there is for residential real estate, it is virtually impossible to assess the average resale value of timeshares. However, that’s where discussing options with a licensed timeshare resale broker is important, as they are typically the only ones qualified to provide a market value assessment of a timeshare.

Pricing Timeshares for the Resale Market

There are plenty of variables in play when it comes to asking, “is there a resale market for timeshares?” Just like with the pre-owned car market (where there could even be a market for a ’79 Ford Pinto), timeshares must be priced right in order to sell.

Where sellers sometimes get confused is with the starting point for resale pricing – thinking they can get back what they originally paid for their timeshare. Resort pricing carries a 50-60 percent markup to cover sales and marketing costs and commissions, which is overhead that does not carry over into resale pricing. So, sellers should understand that in the vast majority of cases they will not make a profit over their initial purchase price.

Sellers need to think of taking their original sale price and reducing it by 50-60 percent as a starting point, but that may not even be enough.

This pricing discrepancy is why consulting with a licensed agent is crucial when entering the resale market, so you can gain professional advice for pricing your property for resale. A consultation with Timeshare Broker Associates is free, as is listing a timeshare for sale since we don’t charge upfront fees.

Ready to sell? Let Timeshare Broker Associates help.