A.- First of all, your timeshare, like your house and car, is worth more to
you for its sentimental and/or financial value than it is to anyone else.
B.- If you are new to the resale market, then the only point of reference
you have is probably what your salesperson told you when you purchased from
the developer. In that case, you were convinced that the property or membership
was worth anywhere from $3,000-$30,000 usd. This is true from the developer's
point of view. He has to pay for the construction, land (normally around 30%
of the cost for those 2), administration (about 10%) and between 50%-60% to
sell the product—as well as his profit. So if you bought retail from the developer
for—let's say--$10,000, this boils down to something like $5,000 to $6,000
usd of the purchase price went to sales and marketing—to advertise, promote,
market and sell the product to you. So about $30%-40% of the price ($3,000
to $4,000) is the actual cost of the property.
C.- Then other factors come into play:
i. Appreciation/Depreciation: Is it worth more or
less on the open market today than when you bought it? In the real
world it is similar to what we all have heard about new cars—once you drive
it off the lot its value goes down. In the case of timeshare in general,
the value goes down at least 50% to 60%--the cost of the sales and marketing.
Then it depends on how well the property has been maintained, how it has
been updated and how competitive it is in today's market in terms of service,
quality and administration.
ii. Demand : This depends on the above to begin with but
also includes the season or week of use, size unit, activities and competition
in the area, quality of services, etc.
D.- So it comes down to the fact that your timeshare is worth about 20%-30%
of what you paid for it—realistically. I should mention that there are a very
few examples that include the Royal Resorts in Cancun , Marriott, Fairfield
and Worldmark that have a somewhat higher resale value than others.
E.- When all is said and done, we recommend several things :
i. Don't pay any substantial upfront fees for advertising,
promotions, assessments or resales.
ii. Check with us if you have a concern or wish our personal— free —consultation.
iii. Register on our website and put your property up for
sale. If it doesn't sell or you get virtually no “bites” then gradually lower
the price. Check with other websites and see what competitive pricing is out
there for the prospective buyer. |
