Resort Sales vs. Resale Timeshares

So what happens when my life style changes and I don’t want to vacation anymore? HUH?? Are you nuts? No more vacations? O.K., it can happen. Now here’s one of the beautiful things about timeshares. You’ve had it for years. That one time purchase you made so long ago has paid you back over and over again (we’re talking money here, not memories and fun times. Moolah, dinero, the green stuff). Now you have something you can leave to your kids. They now can continue enjoying the timeshare you bought years ago. And they can leave it to their kids, and on and on. You wanna go back and figure how much money you saved over the years? It’s mind boggling. “But”, you say, “Let the kids fend for themselves. I want the money". IF, IF, you bought it right in the beginning (more on that in a minute), you now have an asset that you have owned for years that you now can resell. So you’ve had all these vacations through the years, stayed in accommodations fit for a king, and now you get your money back?? What was that “IF, IF” up there? And didn’t I hear somewhere that these things were hard to resell.

MOMMA DIDN’T RAISE NO DUMMYS

Just as with everything else in life, there are all sorts of ways to do things. Buying timeshares is no exception. There are two different ways to purchase a timeshare. Direct from a resort, and a resale or close-out. And we’re going to tell you the pros and cons of each.

First, the majority of people who purchase their first timeshare buy it at a resort. Why? Because they got this letter in the mail that said, “Come look at our timeshare resort and get a free ___________ (fill in the blank).” Greed drives them to get the free whatever. They promise each other on the way to the resort that they won’t buy a thing. And then they meet….THE SALESPERSON. And this is not just any salesman or saleswoman, this is THE salesperson. They knows they've got just 90 minutes with you and they are gonna make it count. They do this three or four times a day, five days a week, 50 weeks a year. You don’t.

Now, let’s be fair. There are very many good and professional sales people working at resorts. They can be very hard working folks who are decent and trying to earn a good living. We don’t fault them for that and we salute them as a necessary part of the timeshare industry. We personally know many of them ourselves.

But here’s the down and dirty of it. The average timeshare resort has a marketing overhead of 50 to 60%. In layman’s terms that means this: All those free gifts are going to be paid for by someone. You. All that staff you see, all those salespeople, all the office personnel have to be paid by someone. That’s right, you again. So you purchase a timeshare for…let’s say $15,000. (You know you got a deal ‘cause the price was much higher. But when you couldn’t afford it, they were nice enough to find you a “foreclosure”. ahem). 50% marketing overhead means that $7,500 of that $15,000 went to pay nothing but the cost of getting all those people together to sell you that timeshare. So what’s the true value of the property? (math quiz here). That’s right! $7,500! So! What happens when you go to resell that property later on? Can you sell the cost of the marketing you paid for? NO! So what can you expect to get for your timeshare? Assuming no appreciation (don’t assume it, it’s rare…unless you truly bought a steal), $7,500.

YOUR NEW VACATION HOME

So you get home with your brand new shiny timeshare. You’re proud as a peacock with a wax job and you go over to your neighbor to show it off. What a coincidence!! Your neighbor just bought a timeshare as well!! You show her yours and she shows you hers. (??) Anyway, you compare notes. PeggySue now owns a timeshare at a really luxury resort with all the trimmings. “You must have spent some really big bucks for that!”, you exclaim. (You enjoy “exclaiming”, as opposed to just talking) PeggySue then tells you how she found a resale for only $6,000. The original price from the resort had been $14,000. She also shows you her one-year guarantee that she will love her timeshare. She asks you why you’re crying.

Yes, my friends, there are bargains and then there are bargains. Our strong advice: buy a resale or a developer close-out. Same stuff, lower price.

Now we did say there were pros and cons to each. Here they are. First, buying at a resort will give you a few niceties. You will be able to view the resort first hand. You’ll make new friends with THE SALESPERSON. You will learn what the term “high pressure” means. (Remember when your mom used to cook with that pot called a pressure cooker? Well, you’re the meat.) You will receive a gift of some nature for your troubles. On the down side, if you succumbed, you will have bought a timeshare via the most expensive way known to mankind, and possibly the entire universe.

By buying a timeshare as a resale or a developer close-out, there are also pros and cons. Let’s be negative first. A professional resale company will have a large variety of timeshares for you to choose from. That’s good. They can take the time with you and discuss your vacationing habits and what your needs are and all the different ways timeshares can benefit you. They can make suggestions as to which timeshare resort would be best suited to you. Did you catch something subtle here? THE SALESMAN has only one product to sell you, his. It’s going to fit you whether you like it or not. He’ll MAKE it fit! The resale company has no such pressure. So where’s that negativity? Here it is: The only downside is that you are probably not going to have the benefit of walking the resort before purchasing it. You’re here, the resale company is there, the resort is way, way over there. Yep, I know what you’re thinking (We work on the side for the Friends Physic Network). You’ll just take a ride down to that little ‘ole resort and check it out for yourself. Doesn’t work. By the time you get back, if it was any kind of a good bargain at all, it’s long gone. What was that? Then you’ll just wait for the next one? Ever watch a dog chase its tail?

Now let’s discuss for a moment why the above doesn’t matter anyway. Remember early on we talked about how only 2% of timeshare owners go back to their home resort each year? That means 98% of timeshare owners are using the exchange system each year. Meaning: the only time they may have seen the resort they bought was when they were holding hands with THE SALESPERSON. The resort itself is nothing more than a vehicle to use the exchange system and let them go where they want each year! In fact, ask your friend or co-worker who owns that timeshare how often they actually go back to their own resort! Go ahead. We’ll wait…. See! Told ya!

Costs of Timeshares