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What is "Equity" in a timeshare?

lcds1

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Bought 3 weeks on the resale market- got a call today that is interesting to us about upgrading to newer unit. I would wipe out one week also get MF down to 2 if I did this.
Tried to google Equity in timeshare and got names of companies, etc.

Would someone mind explaining to me ( I wanna know things before I see the salesperson) what EQUITY in a Timeshare is?

Thanks!
 

ronparise

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My guess is that they will offer to take what you own in trade for something that they are selling...but it wont be an even up trade

They will assign a value to what you own and then put that equity toward a new purchase

Im almost positive you will leave that meeting with fewer weeks and a large debt....

This is a popular sales tactic used at Wyndham......dont do it would be my advice
 

lcds1

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Its with the original developer. I am just trying to get an idea of WHAT is equity in this market and what the equity is against???? The selling price/the amount that is still outstanding on the unit??

Again...have searched the net and not finding explainations.
 

rrlongwell

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Its with the original developer. I am just trying to get an idea of WHAT is equity in this market and what the equity is against???? The selling price/the amount that is still outstanding on the unit??

Again...have searched the net and not finding explainations.
In the world of Wyndham, trade equity is the dollar amount of discount you receive for a new purchase. This typically is a process where they take your existing deed(s) back and combine the point value with additional points and you pay them XX,XXX thousand dollars. This generic formula assumes no morgage on the existing timeshare(s).
 

aliikai2

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Most developers will give you 100% of what you paid them in trade into something larger/more expensive. So in this context the Equity is 100% of your original retail purchase.

In a general sense, the equity in any timeshare is what the open market will pay. For example you bought a XXX from YYY for $18,000
They are offering you $18,000 in trade for XXYYZZ.

Or in the open market it has a resale value of $300, and it will cost $250 transfer fee, and $125 to have a closing company draft and record the new deed. So, you find a buyer that is willing to take the unit for $100 and they will pay the closing and transfer, your equity is
$100.

One is the real value ( resale equity) and the other is play money ( retail equity)

fwiw,

Greg
Its with the original developer. I am just trying to get an idea of WHAT is equity in this market and what the equity is against???? The selling price/the amount that is still outstanding on the unit??

Again...have searched the net and not finding explainations.
 

momeason

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Don't even meet with developer salesman

They are snake oil salesmen in disguise. They will convince you that what they are offering has value, but it does not have value anywhere close to what they will ask you to pay. Give away a week if you want. Don't pay them.
This board is the place to research, not the internet at large. You are in the right place.
 
Last edited:

BocaBum99

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Its with the original developer. I am just trying to get an idea of WHAT is equity in this market and what the equity is against???? The selling price/the amount that is still outstanding on the unit??

Again...have searched the net and not finding explainations.
To the developer, equity means discount. That's all it is.

If they want to sell you a 2br oceanfront unit at the retail value of that unit is $30,000, they may offer you an "equity trade in" of $10,000 for your 1br unit as a trade in. The net amount to you is $20000. The developer will call the $10,000 the equity you have in your timeshare.

It's not equity. It's a discount. They get your $20,000 and your timeshare, you get a 2br unit for $20k plus your timeshare.

If I walk in right after you, they will offer me the same 2br unit for $30,000. I walk away a couple of times and they drop the price to $20k. I get the same deal and I don't have to give them my timeshare.

Equity trade ins from the developer are nothing more than sales tools to get you to buy an overpriced timeshare.
 

AwayWeGo

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[triennial - points]
Nothing From Nothing Leaves Nothing.

The equity in your timeshare is the market value less debt.

Anyone offering you a trade in value of more than the resale value less debt is scamming you.
You are correct, sir.

Many, possibly most, timeshare deeds are worth approximately nothing, or just a few hundred bux at most.

That means it takes exceptional talent & discipline on the part of the professional timeshare sellers to get people to cough up thousands of dollars for timeshare deeds that are close to worthless. And, make no mistake, the full-freight timeshare sellers are doing exactly that every day -- trying to, anyway.

Nothing that the timeshare companies sell at full freight is worth the money -- nowhere close.

You could look it up.

Full Disclosure: Click here for the song.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 

RX8

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They can call it want they want but it is not true equity. They could offer $100,000 "equity" for your trade in but you will be guaranteed to be paying $120,000 for the purchased week.

By the way, you mentioned they would be selling you a "newer" unit. What do they mean by that? A different resort? Unless you will be the very FiRST person staying in that unit, there are no such things as a new timeshare unit.
 

AwayWeGo

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[triennial - points]
You Typed A Mouthful.

By the way, you mentioned they would be selling you a "newer" unit. What do they mean by that? A different resort? Unless you will be the very FiRST person staying in that unit, there are no such things as a new timeshare unit.
You are correct, sir.

By the time the new owner of a "new" timeshare unit shows up & checks in, the unit won't be new any more. That's because other people will have been staying right there previously in that very unit, making the so-called "new" unit used-used-used any way you shake it.

Just another basic timeshare reality the timeshare sellers will never admit.

So it goes.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 

ronparise

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Its with the original developer. I am just trying to get an idea of WHAT is equity in this market and what the equity is against???? The selling price/the amount that is still outstanding on the unit??

Again...have searched the net and not finding explainations.
You have your answer here,,,no need to search any further As Boca said

value - debt = equity
 

persia

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Equity in a timeshare is a bit like a Sasquatch, except the Sasquatch is more likely to turn out real....
 

Beefnot

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They may be defining "Equity" as either (a) "What I Agreed to Buy the Timeshare For" (i.e., Contracted Price) minus "What I Still Owe" (i.e., Debt Outstanding), or (b) "What They Are Currently Selling That Identical TS For" (e.g., Current Retail Pricing) minus "What I Still Owe" (i.e., Debt Outstanding). Either way, they are trying to get you to apply what you have paid to date towards another, likely more expensive, timeshare or points package. I'm guessing (b) because with alternative (b) they create an impression that your "Equity" exceeds simply what you've paid.

What has been correctly pointed out is that the only authentic "Equity" equation is "What The TS Can Be Sold For on The Open Market" (Market Value) minus "What I Still Owe" (Debt Outstanding). If you still owe anything on it, then for 95% of timeshares, your equity is negative.
 
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