ie. Resort, city, state, country or zip

Timeshare Study Contents : Issues for the Timeshare Resale Market

Vacation Timeshares Resale Market Issues

In this study a number of issues for the resale industry were identified.

  1. Advertising company abuses. Unlicensed companies practicing real estate dilute timeshare resale efforts. Anyone with a website and “Cart” software can get into the business of advertising vacation timeshares for sale. Many of these sites have no address, phone number and only seem to exist in cyberspace for the benefit of the owner. The distraction of these non-service businesses from companies that are active in timeshare vacation resales is another cause for frustration for both buyers and sellers trying to find dedicated timeshare resellers in the market place.

  2. Lack of a Multiple Listing Service. A resale MLS for brokers is needed. When cooperating brokers and wholesalers have browser access to vacation timeshare property information, the numbers of sales will increase. As those numbers increase, so should the prices. The market is so large that a successful MLS type system would benefit the individual owners, developers, resort HOAs and facilitate choices for consumers.

    A viable vacation timeshares MLS can have geographically dispersed comparable sold information for use by brokers. This can help with listings and sales.

    Many issues are involved in forming a successful MLS for brokers. Getting all the participants comfortable with the format for instance can be a challenge. All multi board of REALTORS® owned and operated MLS operations in the U.S. for instance tend to be slower to adopt change and can be inefficient, partly because of the power plays and personalities that dominate their governance.

    A few companies have tried unsuccessfully to roll out the MLS program within the vacation timeshare industry. Our first effort in 1985 was a dialup “bulletin board” to post properties for brokers and it failed. 

    In the last four years we revisited and tackled the problem, created the software and are close to being ready to test the market with an introductory product. Our goal is to create a national listing system for all co-operating timeshare resales agents. We have developed the web based software and will be rolling it out later this year. 

    Additionally a public website would be helpful to market member brokers’ inventories. Such a portal provides aggregated timeshare resale property and broker information for the interested shoppers and eager buyers.

  3. Lack of Cooperation Among Vacation Timeshare Industry Sectors. To go a step further, there needs to be a higher level of cooperation between competing developers, resort HOAs and brokers. The vacation timeshares market is highly competitive and there are many different types of vacation products from which consumers can choose. Individual resellers compete with developers to sell their units. There remains a tension between developers and resellers. Thus, some developers refuse to transfer rewards programs to new owners unless the resale is made through the developer. Other developer’s designated brokers will refuse a listing unless the price is within certain parameters set by the developer. In other situations, the developer or homeowner association will refuse to provide covenants and restrictions if the owner wishes to resell.

    The developers need to recognize that a vacation timeshares resale market is critical to the continued viability of resorts. When intervals are simply abandoned because of the inability to resell, the association loses the needed fees. Without a sufficient owner base to pay maintenance fees, the resorts fall into disrepair. Indeed, this has been a significant problem in Florida. See part 5 – Developer Resale Issues – below.

  4. Timeshare resale price commoditization has occurred from massive published resale price information mainly on the Internet. Whenever you have many items for sale that are basically the same, they become a commodity. Price therefore becomes the only real difference in most of the products so marketed. Some vacation timeshare resellers for instance use websites like eBay to market developer trade-ins and repossessions, some with prices cheaper than one piece of luggage. If you were an owner and saw the prices they are getting for a similar unit to what you own you would be dissatisfied with your purchase to say the least. You would have to keep repeating to yourself “The value is in its use.”

  5. High Marketing Costs. On the resale market, the timeshare resorts, the individual sellers and purchasers are dispersed throughout the country and the world. To effect sales requires nationwide advertising and marketing efforts. Indeed, even developer sales and marketing costs, on average, exceed more than 40% of the net sales volume. The Florida legislature enacted a property assessment law for the developers that assessed timeshare resorts at roughly 50% to recognize “that sales and marketing expenses are an important component of the cost of a timeshare unit.” The statute provides a “rebuttal presumption that the deduction is 50 percent of the purchase price.” Fla. Stat. Ann § 192.037(11).

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Timeshare Resale Study - Table of Contents

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SERVICE DESCRIPTION: Condo Express a division of Ad-Net, Inc. operates on the largest timeshare resale computerized network in the world and on the Internet! Through this extensive network it advertises and promotes timeshare properties for sale and rent using the, a specialized, computerized property matching software.

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