The first question is, should you really sell in the first place?
We find many potential sellers who want to sell for the wrong reasons. They can’t get the reservations they want, are unsuccessful trading their time through the exchange companies, can’t get the property rented or similar such problems. This tells us they probably don’t understand just how to get the most out of their timeshare. Timesharing is an interactive sport. The more you learn about how to use it and the more attention you pay to making reservations at the right time, banking your time, etc. the more you will get back. If this is the problem it might be better to spend some time with the resort staff to find out how to make it work than to give up and sell it. In numerous cases we have given tips to our customers on how to achieve results and had them come back later and express their happiness that they didn’t sell. On the other hand, there are some legitimate reasons for selling. If this is the case then this information will help you.
Suppose you lived in a 100 unit condo property all of which were absolutely identical. Let’s also say that the current market values were $150,000. If you said, “I will sell, but I want $250,000”, what do you think would happen? Right!! You would sit and wait and wonder why your condo didn’t move. Furthermore, it wouldn’t move until you adjusted the price to the current market level. Resale timeshare buyers are not dumb. They know they can steal these units on the secondary market and there is no way they are going to pay more than that. If your price is too high you simply will not sell it.
Another complaint we hear when we quote current market values is “I can’t take that kind of loss. I paid a lot more than that for it.” One time a banker said that to me. He said, “The bank has a lot more than that in it and can’t take that kind of loss.” I told him that the bank had already taken that kind of loss, the only question was when he was going to recognize it. It sounds brutal to say, “I don’t care what you paid for it”, but that is what the buyers do say. Resales do not sell for the original developer price. Does that mean you paid too much to begin with? Probably not. There are not a lot of developers who have become rich in timesharing. Many have even left the field. Chances are what you paid originally just covered the developer’s cost, and the marketing (50% of the price). Remember all those “free gifts”? Guess what? They weren’t really free.
Why this low pricing? Until recently, there wasn’t a good marketing system for resales. What would stocks be worth if there were no New York Stock Exchange? Same problem. In the long haul, we believe resale prices should rise as the current levels present incredible values to the buyer. How long will it take? Who knows? In the meantime, your resale had better be priced right or it simply won’t move.
How do we price it right? The same as with condos, you need to determine the comparative market values (comps). For what price has similar timesharing property been selling (closing)? The best source for this information is your licensed resale broker. The next best source is title companies. As time goes by, this information will become easier to come by. Your property manager might have some ideas as to values. If you follow Timesharing Today over time, you could call some previous sellers whose ads no longer appear and find out if and for how much they sold. That brings us to Rule 1: Your resale timeshare must be priced right (at the going market price).
The general lack of liquidity in the resale business has given rise to a new cottage industry known as the “Timeshare Resale Scam”. In this scenario, you as a potential seller get a call saying, “We can sell your week if you will just send us $350, $500, $2,000” (your choice). If it will make you feel any better, I got hooked on this years ago myself. I sent them $350 and they put an ad in the local shopping news (on the other side of the country) at a cost of $9. The results were just as you might suspect: nothing.
Some of the frauds such as the recent Oscar Bradley scam (see Timesharing Today issue #30, Nov/Dec, 1996) were very elaborate. In that one, they would say they had the $4,000 value timeshare sold “to an offshore buyer” for $16,000. To guarantee the sale closing within a year you could buy an insurance policy with the British Guarantee Company for $2,000 to $4,000 (whatever they could get). They invited you to check them out by calling “The Timeshare Advisory Council” at an 800 number they would give you. Of course, that was Bernie down at the other end of their boiler room. Sadly, they fleeced a number of timeshare owners before they were driven out of the country. Lately we understand they are continuing the same scam by phoning from England where they are supposedly beyond the reach of the FBI. Their former leader is now in prison.
One of the latest variations of this scam is the “need” for a resale appraisal. They claim that this is necessary because their “lenders” require it. These frauds tend to originate in Florida where there is now a law against front fees for resales. The appraisals are priced at $300 up (Ridiculous). Some of these “Resale Brokers” will give you a list of several appraisers who are acceptable. Some are even offered by respectable national franchisees. Question: Why would their “lenders” need an appraisal before the buyer has even asked for a loan (Most don’t)? The bottom line is that you will be relieved of your money without the production of any acceptable results.
The old saying of “Why buy the cow if the milk is free?” certainly applies here. Why would you pay a listing or “appraisal” (“advance “or “front”) fee when it is unnecessary? Would you pay a broker to list your condo? Of course not. Just shop around until you find a broker who will work on a straight commission. Once you have sent a front fee the incentive to produce drops dramatically (to zero). It is not uncommon for you to be told not to call again to check on your “listing”. Not to say all advance fee deals are frauds, just most of them. If you say no to all, you will be right most of the time. And that brings to Rule 2: Don’t pay any kind of fee to list your timeshare for sale. This is particularly true if the agent is in a different state from the property or says, “We are an advertising agency, not a broker”. Listing a timeshare normally requires a Real Estate License in the state in which the property is located. If they don’t have one, beware!