Timeshare Valuation - One Approach
September 19, 2011
Mr. Richard Marquette is a timeshare professional, writer and advocate. He wrote a series of articles in the Wall Street Journal that addressed valuing timeshare interests. First, he suggests that we follow three simple steps to discover the expected resale value of our timeshare interest.- Understand the vacation ownership product that you own.
- Search online for ads of comparable timeshares that are for sale.
- Request a comparative market analysis from a respected real estate broker specializing in timeshare and vacation resorts.
Following are his comments, which we have altered to present here on Aimfair.com. Other professional opinions will be added to Mr. Marquestte's comments as we find them. We should be able to gain a better understanding of what we own and how best we can gain the value we want and deserve.
Step One: Understanding What You Own.
A big part of the issue facing timeshare owners is that many unscrupulous developers sold vacation ownership packages as real estate investments. This is one of the most common misconceptions of timeshare. Vacation ownership products will generally diminish in monetary value immediately after purchase. It is not unusual for resale prices to be less than 50% of developer pricing, and in a highly competitive seller market realistic values can quickly diminish to nothing at all!
Start your research by correctly identifying exactly what you own. You need to know the resort or system and whether your ownership is an annual usage or otherwise. You need to know if you own a fixed week or a floating system such as a points program. Also, the size and type of villa you have usage rights to will be a big factor in properly evaluation the resale value. For this information, refer back to your original purchase contract or simply contact your resort management company or HOA and request an outline and description of your ownership. You can normally contact the phone number shown on your last maintenance fee bill to be connected with owner services
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Step Two: Find Comparable Timeshares for Sale Online
The next step in determining the resale value of your timeshare is to step into the mindset of a potential buyer. The incredible power of internet search engines makes this very easy. Within minutes, you can likely find numerous for sale classifieds that are either exactly what you own, or are very similar. When you do this, always bear in mind that a potential buyer will be looking for the lowest priced ads- so never settle for any results that "average" asking prices and don't base your valuation on anything but the lowest priced comparables. Never forget that most upfront fee companies make money from selling advertisements, not selling timeshares! Always take the time to search several different venues.
A perfect example of this type of price confusion can be seen with the timeshare classified website Sellmytimesharenow. At the time of publish, there are 4,898 timeshare ads on that website alone that are priced higher than $25,000. Many of these same timeshares can also be found with asking prices as low as $1! The popular forum website Timeshare Users Group features more than fifteen pages of "Free" timeshares. Always remember that a buyer will search for the lowest available price, so the lowest price you find should be the primary basis for your timeshare valuation.
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Step Three: Obtain a Valuation from a Licensed Real Estate Broker
The final step in discovering the expected resale value of your timeshare is to request a comparative market analysis from a timeshare brokerage. Much like selling a home, a legitimate real estate professional should be able to provide you with an estimation of value based on both recent sales and active listings for comparative vacation ownership products.
Pricing for CMA's will vary, so always check with several timeshare resellers before agreeing to pay any type of valuation fee and never pay more than $50. for a written timeshare valuation. For many timeshares, I can provide you with a simple CMA at no charge. There are also a number of other respected brokers who will also give you a fair market estimate of value for your unwanted timeshare week and who will not charge you a dime for the service! For brokers that do not charge an upfront fee, proper pricing of listings is vital to the success of their business. You will want to compare the CMA you received from the brokerage with the results of your own online search. You should find that the results of both are very similar in range.
Following these simple steps will provide you with a reasonable expectation of your timeshares resale value, which will help to protect you from the numerous timeshare scams and upfront fee marketing companies who depend on consumer ignorance for their unsavory business models.
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Although asking a real estate agent who specializes in timeshares is a good suggestion, please remember that this article was written by a real estate agent in Florida. State laws limit what licensed real estate agents are able to represent. Also, real estate is tangible, while our contracts are intangible.
Regardless, Roger's comments are relevant and useful.