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Sometimes it's better to buy from the brand [says Timeshare Salesman]

maxpot46

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Rather than purchase from directly from a major brand, a buyer can choose to purchase from a reseller. However, this may not be advisable, from a financial and usage perspective. You can certainly find an average or worse timeshare for much less on the resale market. But for the very best programs, one may be better off purchasing directly from the brand.

Firstly, there is some risk involved with purchasing resale, and to avoid this many choose a licensed real estate broker. These brokers charge considerable fees, however, and can be pretty scammy themselves (just try to sit through a phone call with a rep from, say, SellMyTimeshareNow, and you'll be getting the hard, emotional sell). In any case, major brands typically will invoke a Right of First Refusal on resales that prevent a buyer from acquiring them at overly discounted prices, say (as an estimate) 50% of the current market value. Add on the upward price increases caused by competition amongst resale shoppers, broker’s fees, and closing costs on the real estate transfer, and the new owner could end up paying up to 75% of the price offered by the brand itself.

Then we must account for the fact that the brand will offer first day incentives that will not be received when purchasing from a reseller. If the buyer is a savvy enough negotiator to gain a first day incentive greater than, say, 25-30% of the deed price, then he is coming out ahead vs. a resale purchase, from a financial perspective.

Finally, it’s not uncommon for major brands to restrict resale owners from the full benefits of their programs, reducing their value from both a usage and financial perspective.

When all these factors are accounted for, it may make sense to avoid the additional risk and work of purchasing from a reseller. It may not, particularly if the buyer is satisfied with a lower quality timeshare, so the resale market shouldn’t be ruled out entirely. As always, a shopper should do his due diligence.
 

bluehende

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The biggest flaw in your assessment is that if you cannot transfer all of those retail buy perks it makes your timeshare worthless on the resale market. While there certainly can be a valid reason for buying from the developer I would avoid any purchase that value can not be transferred when I want to move on.
 

maxpot46

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The biggest flaw in your assessment is that if you cannot transfer all of those retail buy perks it makes your timeshare worthless on the resale market. While there certainly can be a valid reason for buying from the developer I would avoid any purchase that value can not be transferred when I want to move on.
That's precisely why major brands do this, and why it's not always a good idea to buy resale.
 

mjm1

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Rather than purchase from directly from a major brand, a buyer can choose to purchase from a reseller. However, this may not be advisable, from a financial and usage perspective. You can certainly find an average or worse timeshare for much less on the resale market. But for the very best programs, one may be better off purchasing directly from the brand.

Firstly, there is some risk involved with purchasing resale, and to avoid this many choose a licensed real estate broker. These brokers charge considerable fees, however, and can be pretty scammy themselves (just try to sit through a phone call with a rep from, say, SellMyTimeshareNow, and you'll be getting the hard, emotional sell). In any case, major brands typically will invoke a Right of First Refusal on resales that prevent a buyer from acquiring them at overly discounted prices, say (as an estimate) 50% of the current market value. Add on the upward price increases caused by competition amongst resale shoppers, broker’s fees, and closing costs on the real estate transfer, and the new owner could end up paying up to 75% of the price offered by the brand itself.

Then we must account for the fact that the brand will offer first day incentives that will not be received when purchasing from a reseller. If the buyer is a savvy enough negotiator to gain a first day incentive greater than, say, 25-30% of the deed price, then he is coming out ahead vs. a resale purchase, from a financial perspective.

Finally, it’s not uncommon for major brands to restrict resale owners from the full benefits of their programs, reducing their value from both a usage and financial perspective.

When all these factors are accounted for, it may make sense to avoid the additional risk and work of purchasing from a reseller. It may not, particularly if the buyer is satisfied with a lower quality timeshare, so the resale market shouldn’t be ruled out entirely. As always, a shopper should do his due diligence.
My first thought after reading your post is that you may work in the industry and are trying to promote buying from the developer. You are a guest on TUG and these are your first posts, so I and others will be suspicious of your motives.

We have bought direct and resale and in almost all cases would recommend that a prospective buyer do a lot of research and buy a quality resort in a quality system. We have done that for far less than your example of 50% of the current rate and are very happy with our choices. There may be some good reasons for someone to buy direct, but I would guess that is a minority.

Best regards.

Mike
 

tombanjo

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Oh my God ... scammy re-sellers might only save you 50% of developer prices. Better pony up the extra 50% to the low pressure, no hard sell developer if you know whats good for you.
 

DannyTS

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i would encourage you to disclose if you indeed work in the industry.
 

VacationForever

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We tell all of our friends that if they are thinking of acquiring timeshare, in 99% of the cases they should look at buying resale, especially for their first acquisition. Having said that, we have resold everyone of our resale purchases and we are now only holding our developer purchased ones, with our most recent acquisition in 2017. There are very few, i.e. 1%, cases where buying from the developer(s) makes sense.
 
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chemteach

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In some cases, it's great to buy resale, and then buy something direct from the developer to bring your resale purchase into the developer official programs. Marriott, Vistana, and Diamond all do this. You would need to do research in each separate section about how to do this, and when it makes sense. For me, it worked for both Vistana and Diamond. One should never buy direct from the developer without first doing A LOT of research. But some developer purchases can make ownership even better...
 

DannyTS

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The way i see it, the value of a timeshare contract is :

home resort usage value +
internal exchange value +
external exchanges +
rental value +
other minor perks.

Even when the internal exchange capability does not transmit to the resale owner it does not make sense in most cases to pay tens of thousands of dollars for this feature when you still have the all the other features for a fraction (or zero) of the developer price.

Of course there are systems where the internal exchange does transmit to the resale owner (HGVC, DVC, Whyndham etc) so in those cases buying retail makes even less sense.
 

maxpot46

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Yes, I work in the industry. Dismissing my arguments only because of this would be an ad hominem fallacy, however. An argument stands or falls on its merits, and I am simply making an argument for consideration. If I state any incorrect facts, or make any incorrect inferences, these should be easily challenged by evidence or logic.

Doesn't the value of first day incentives, typically in the form of bonus points or weeks, have financial value that offsets if not eliminates the savings by purchasing on the resale market? And am I not correct that many major brands don't offer the same logistical usage to indirect buyers?
 

DeniseM

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Doesn't the value of first day incentives, typically in the form of bonus points or weeks, have financial value that offsets if not eliminates the savings by purchasing on the resale market?
Almost never.

maxpot46 - You aren't talking to rookies here...
 

maxpot46

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I don't get it... why wouldn't free accommodations have value?
 

DannyTS

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Yes, I work in the industry. Dismissing my arguments only because of this would be an ad hominem fallacy, however. An argument stands or falls on its merits, and I am simply making an argument for consideration. If I state any incorrect facts, or make any incorrect inferences, these should be easily challenged by evidence or logic.

Doesn't the value of first day incentives, typically in the form of bonus points or weeks, have financial value that offsets if not eliminates the savings by purchasing on the resale market? And am I not correct that many major brands don't offer the same logistical usage to indirect buyers?
Every time I estimated the value of the bonus points, it was 2-3 grands maximum (and i am being very generous here). When you subtract that from the developer purchase price, you are still left with a huge difference in cost between retail vs resale
 

DannyTS

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In my opinion it is not that the bonus points do not have any value at all, it is that their value is not high enough to justify the purchase.
 

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I was stammered to read this post. Someone comes on a Users group to espouse the benefits of buying retail. If anyone has read any timeshare financials, they will know that 1/2, or 50% of developers' "cost of goods sold" is tied up in advertising, overhead, promotions, gifting, and commissions. Since the developers don't buy back timeshares from unsatisfied customers, there is an artificially low market. Savvy consumers can take advantage of this market. That is what resale is all about. Buy back your developer sales from dissatisfied customers, instead of strapping them to lifetime commitments, and you will solve many problems, including all the posts on the complaint sites.
 

bbodb1

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Subtract max....
Add .........

Although there was one absolute truism in the OP:
....As always, a shopper should do his due diligence....
 

DeniseM

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I don't get it... why wouldn't free accommodations have value?
Free accommodations are awesome - especially free timeshares on the resale market. My last 3 free timeshares were ocean front 2 bdms. in Hawaii.
 

maxpot46

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Let's conservatively assume you're given 3 weeks of free vacations on a 1-week purchase, for which the average deed price in 2017 was around $22k. Assuming a value of $250/night after taxes, that would be worth $5,250, which is 24% of the purchase price. A savvy negotiator could acquire 5+ weeks as a bonus, which would have a value of $8,750, which is 40% of the purchase price. This could potentially exceed the savings by purchasing resale, correct?

Additionally, we have to reduce the value of a resale if it comes with reduced logistical usage, correct?
 

maxpot46

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Free accommodations are awesome - especially free timeshares on the resale market. My last 3 free timeshares were ocean front 2 bdms. in Hawaii.
What if you want a timeshare in a specific, premium location, e.g. New York City?

I am not arguing that all resales are inferior to all direct sales. I'm saying that it SOMETIMES makes sense to purchase direct.
 

maxpot46

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I'm not pitching, I'm making an argument.

I see you have very negative opinions of people in the industry, but I'm just trying to have a civil dialogue here.
 

DeniseM

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maxpot46 - We have all heard the sales pitch - don't bother. I'm out.
 

bbodb1

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I'm not pitching, I'm making an argument.

I see you have very negative opinions of people in the industry, but I'm just trying to have a civil dialogue here.
It seems clear you do not realize the position you are supporting here - your OP makes the case for a buyer to perform due diligence - to become educated about what they are purchasing. You want the buyer to appreciate the top level purchase but as part of the buyers efforts toward understanding what constitutes a top level quality purchase, that same buyer is going to discover how over inflated TS prices are.

Increased buyer education is not going to lead to the outcome you desire.
 

maxpot46

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Is there something wrong with my math when I make the assertion that the value of bonus points can overwhelm the savings of purchasing resale (which might suffer logistical penalties), particularly if looking for a specific property?
 
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