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Why are people giving timeshares away or selling for $1?

Lovetovaca

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Hi folks,
I'm new to TUG, I've been reading this BBS for hours on end the last few days. I'm just trying to understand why people are giving away or selling TS for $1.

I am thankful for the tips I've read so far on TUG. I called a few timeshare re-sellers to understand the value of our TS. When they told me what they would get for it, I was shocked; it was more then I paid originally. But I stopped myself from using them. They wanted an upfront payment of $1756.00 USD charge for selling my timeshare.... even tho it included all the paperwork, transfer and closing ;).

But in reading a few posts of people trying to give away their TS for $1, I must be missing something (not that far fetched tho).

I have RCI weeks. 1 fixed week and 2 bonus weeks with a TP (Trading power I assume?) of 42. For 3 weeks every year my whole family goes anywhere in the world RCI has a place all for $252 all in minus airfare and any all-inclusives. Paying MF of $300ish a year doesn't seem like alot for the benefit. Sorry that sounds like a sales pitch, it certainly is not :). I just see a lot of value in my own TS. Maybe I don't understand the relationship between my TS and RCI? I'm not sure.

If a TS is 50% marketing and sales costs as I read in TS 101 (great article btw) than shouldn't a TS be worth 50% of the initial cost? And if vacations are increasing in prices, shouldn't a TS week do the same? Sure supply and demand says there are more sellers than buyers, but does that mean people should take 100% loss on their TS? I'm sad to see that's how it seems to be.

I just don't understand why TS have no value and I'm trying to learn/understand why.

Anyways, thanks for the great tips and reading on this BBS!
 

Ty1on

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It's simple, those who are quoting you a high value have no intention of selling your timeshare. Their game is to get your $1,700 and let you hang.

If they really believed they could sell your TS for what they are telling you, they would have no reservations about withholding their fees from the proceeds.
 

DeniseM

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The re-sellers who charge a high upfront fee can't really sell your timeshare for the amount they quote - once they have your money, why should they even try?

REPUTABLE brokers don't charge an upfront fee - that is who you want to talk to for an honest review of your property.

When you are selling anything, price is determined by supply and demand.

The timeshare resale market place is flooded with timeshares for sale. In other words, there is more supply than demand at most resorts. Therefore the resale price is low.

At some of the very top resorts like Hilton, Hyatt, Marriott, Disney, and Starwood, prices are a little higher because of the high quality of the resort, and possible ROFR by the developer, but usually still below 50% of the original retail price.

There are many reasons why people decide to get rid of their timeshare:

-death of a spouse
-illness
-old age
-can't afford the maintenance fee
-can't afford to travel
-an inheritance they don't want
-acquire new timeshares and have too many
-never used it or understood what they owned in the first place

As time goes on, life changes, and timesharing may not work for them.
 
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AwayWeGo

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[triennial - points]
Fair Market Value For Most Timeshares = Zippity Doodah.

Why are people giving timeshares away or selling for $1?
We decided it was less trouble to give ours away for nothing than to try to sell'm for next to nothing. All ours are gone now except for 1 nice 2BR-2BA triennial points unit.

With timeshares, the value is in using them, not owning them.

The timeshare development companies themselves can't sell'm except through high-pressure razzle-dazzle & ballyhoo.

Nobody goes on vacation telling themselves that while they're there they'd like to overpay by many thousands for ownership of an item that obligates them to pay steadily rising use fees in perpetuity. They only do that after the timeshare sellers lure'm in by offering various freebies for showing up at high-pressure sales pitches.

Some see through the hoopla, listen politely, & when it's all done say No Thanks, collect their freebies, & resume their vacations.

Others are so dazzled that they sign up to pay many thousands of dollars for exactly the same thing (or the equivalent) as what other people are giving away or offering to sell for $1.

Timeshare vacationing can be great, & a great value -- but not at anything close to full-freight prices charged by the timeshare companies.

Buy timeshares resale -- or get'm free. Save thousands of dollars on exactly the same thing as full freight, or the equivalent, or something even better.

And remember: There Is No Such Thing As A New Timeshare.

No matter how much or how little you pay, by the time you show up & check in, other people will have already been staying previously right there in your unit. That's used-used-used any way you shake it -- & it makes no sense to pay new prices for non-new items.

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

Lovetovaca

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I get the up front fee being a warning flag of a scam, that makes perfect sense and is logical, why would they sell it after they have your money? I would, but thats the honesty in me. I get why others don't.

But the reasons for selling a TS are legit, but they are the same reasons anyone would sell a 2nd car and I don't see any of those for free or for $1. They are usually 'take over my payments', or inexpensive, but never free. Even if given away they will cost thousands to fix and be road worthy. How many millions of used cars are for sale?

I apologize if it seems as if I'm trying to argue the point TS shouldn't be given away, I truly don't understand how they can be completely worthless when nothing else in the world is. People sell used t-shirts for more then a buck.
 

TUGBrian

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car generally doesnt have an annual usage fee you have to pay even if you dont use it.

you can always decline insurance, registration, gas, etc and still keep the car. Sadly its a very bad analogy.
 

DeniseM

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I apologize if it seems as if I'm trying to argue the point TS shouldn't be given away, I truly don't understand how they can be completely worthless when nothing else in the world is. People sell used t-shirts for more then a buck.

Would people buy a T-shirt for $1 if they had to pay a $10 per year maintenance fee on the T-Shirt? Of course not!

Generally, it's the maintenance fee that causes people to sell a timeshare that they can't use. Your maintenance fee is unusually low.

I would say that most timeshares are in the $700 - $1,400 per year range, and some are over $3,000 per year.

It's also the maintenance fee that makes someone think twice about adopting a timeshare, even for $1. The maintenance fee is the REAL cost.
 

AwayWeGo

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[triennial - points]
When You Own A Timeshare, What Exactly Do You Own ?

I truly don't understand how they can be completely worthless when nothing else in the world is.
Timeshare owners are obligated to pay ongoing regular use fees, budget reserve installments, & real estate taxes for their timeshare units. That obligation goes on without end. Not only that, owners are liable for "one time" special assessments that are sometimes levied because of financial shortfalls in the regular budgetary process. A special assessment might not be just one time; some financially troubled resorts hit up the owners with recurring special assessments.

If the regular fees & reserves & taxes work out to, say, $900 per year & the value of the accommodations you get when you check in is closer to $1,000, then it's a good deal that makes financial sense.

But if all you're getting for $900 per year in mandatory ongoing fees is 7 nights in digs worth more like $800 per week, then you're getting hosed -- & you can't get out of it once the deed is signed & sealed & recorded & delivered. You are on the hook until you sell it or give it away.

When timeshare ownership is a negative value like that (& some really, truly are), than you're lucky if you can sell it for $1 or give it away.

Some timeshare giveaways come with free paid-ahead fees, free closing costs, free resort transfer costs, & a cash or gift card bonus as extra inducements from owners super-eager to get out from under.

Putting it another way, some timeshares are worth less than zippity-doodah.

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

DavidnRobin

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I get the up front fee being a warning flag of a scam, that makes perfect sense and is logical, why would they sell it after they have your money? I would, but thats the honesty in me. I get why others don't.

But the reasons for selling a TS are legit, but they are the same reasons anyone would sell a 2nd car and I don't see any of those for free or for $1. They are usually 'take over my payments', or inexpensive, but never free. Even if given away they will cost thousands to fix and be road worthy. How many millions of used cars are for sale?

I apologize if it seems as if I'm trying to argue the point TS shouldn't be given away, I truly don't understand how they can be completely worthless when nothing else in the world is. People sell used t-shirts for more then a buck.

Poor analogy.

Basic economic principle as to why some people have give away their timeshares:
Supply-Demand

Grandview LV for free...
http://www.tugbbs.com/forums/showthread.php?t=237267

They generally do not want to keep paying annual fees for years to come which gradually increase year after year. In some instances - for less desirable resort weeks, as owners default, the HOA (other owners) have to pick up loss until that TS is transferred, and that in turn creates fees to increase. A vicious cycle...
 
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tschwa2

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Lovetovaca,
If you are paying a MF of $300 for grandview, you have a 1 br or a 2 br eoy or even every third year. Your week 2 has a tpu or 13 for a 1 br. The bonus weeks are $219 each can only be booked 45 days or less from check in and only for low tpu weeks. Basically the same inventory as Last call which at regular price is about $260 and during the many sales often come down as low as $199 (lower than the exchange price or the bonus week). You also pay an RCI membership. So right now you get one exchange annually to a fairly low pointed tpu spot for $440 if exchaning back into a VV affilliate and $520 to exchange elsewhere. The two bonus weeks are $219 each.

If you gave away your timeshare but kept your RCI membership you could still get those 3 vacations using last calls and getaway weeks for the same or less than you are paying now.

Add to that supply is so much greater than demand for all but a few resale weeks -be it for location or great trading power or internal priority to other properties in the system that most weeks aren't worth the hassle and the re-occurring fees.


I misread your post as 1 fixed week 2. At 42 tpu;s you must have a 2 br EOY week 52 which will have some value but you only get the tpu's EOY and MF would still be closer to $350. A fixed week EOY 52 might have a value in the $1000-$1500 but it may still take work to find a buyer at those price points.
 
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Ty1on

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Lovetovaca,
If you are paying a MF of $300 for grandview, you have a 1 br or a 2 br eoy or even every third year. Your week 2 has a tpu or 13 for a 1 br. The bonus weeks are $219 each can only be booked 45 days or less from check in and only for low tpu weeks. Basically the same inventory as Last call which at regular price is about $260 and during the many sales often come down as low as $199 (lower than the exchange price or the bonus week). You also pay an RCI membership. So right now you get one exchange annually to a fairly low pointed tpu spot for $440 if exchaning back into a VV affilliate and $520 to exchange elsewhere. The two bonus weeks are $219 each.

If you gave away your timeshare but kept your RCI membership you could still get those 3 vacations using last calls and getaway weeks for the same or less than you are paying now.

Add to that supply is so much greater than demand for all but a few resale weeks -be it for location or great trading power or internal priority to other properties in the system that most weeks aren't worth the hassle and the re-occurring fees.

$350 is either a 1 BR Annual or 2 BR EOY. If it's week 2, OP is very likely going to have to give it away, probably paying transfer costs.
 

Lovetovaca

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Thanks for the information folks it's starting to make sense.
It seems to be in the MF. I completely agree; if you can book a week's vacation via bookit or kayak or whatever is available in the US, a TS makes no sense if it costs more per year for a comparable place for the week.

As for the vehicle, I guess that's a cultural difference; I would never in a million years have one without having insurance on it even while it sits in the shed out back. I guess in my mind its like eating, you just have to do (but that's just in my mind, not a requirement). But yeah I guess insurance is optional, I just don't view it that way. $25 a month in theft insurance keeps the $3000 value of the car worth it (in case it goes missing before I spend $3000 in insurance I mean :))

Thanks again for the education, this BBS has been very helpful.

I'm still trying to catch up on the acronyms. Ours isn't for sale, I pay 350 (maybe 353 exactly) once a year for MF. I pay nothing for the additional 2 weeks as a bonus. It's every year, and every year I get the 2 bonus weeks for a total of 3 weeks per year. But I don't know if the bonus 2 weeks are part of the TS? or part of the RCI membership? We also have 1 resort credit week a year, that is the week that is required to be used within 45 days. I guess I really pay 353 MF and 124 RCI fees per year plus my platinum fee.
 
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DeniseM

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Clarification: In general, you cannot book a [high season] week at a top resort for less than the maintenance fee. In fact, at the top resorts, an owner can often rent their timeshare for a profit.

But, that doesn't change the fact that they are committed to a maintenance fee of $2,000 - $3,000 per year. That would be daunting for many people.
 
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TUGBrian

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you wouldnt spend 3000 a year in insurance to insure a 3000 car though would you?
 

Lovetovaca

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LOL Ty1on this is true.
But really no, there is no reason to spend 3000 insurance on a 3000 car. It only makes sense until you've paid $1500, then you are losing. And that is what I'm seeing is happening with TS via the MFs.

Thanks guys, I understand a bit better now.
 

AwayWeGo

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[triennial - points]
That Was Then. This Is Now.

In fact, at the top resorts, an owner can often rent their timeshare for a profit.
We were able to do that several years in a row, renting out our prime-time weeks for big bux & reserving other people's timeshares for our own off-season bargain vacations via RCI Last Call & Instant Exchange, etc. It was almost like vacationing free.

When the economy slumped, the timeshare rental market tanked also. That's when we saw the writing on the wall & started giving away our (formerly) prized resale timeshares.

So it goes.

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

tschwa2

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Clarification: In general, you cannot book a week at a top resort for less than the maintenance fee. In fact, at the top resorts, an owner can often rent their timeshare for a profit.

But, that doesn't change the fact that they are committed to a maintenance fee of $2,000 - $3,000 per year. That would be daunting for many people.

At top resorts that have a true off season, you can rent for less than the MF's. While the oceanfront Marriott resorts in Hilton Head may command $2000-$4000 in July depending on view, you can often rent the week off II in January for less than $500 or use a bonus AC or pick 2 for less than $300.

If you can book a top resort for less than the MF's it will have no resale value too. A bronze week won't sell for a $1 with a $1300 MF's. A platinum week with the same MF's will go for $8000-$18,000 on the resale market again depending on view.
 

DeniseM

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Good point - I edited my post to "high season week at a top resort."
 

Ron98GT

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Poor analogy.

Basic economic principle as to why some people have give away their timeshares:
Supply-Demand

Grandview LV for free...
http://www.tugbbs.com/forums/showthread.php?t=237267

They generally do not want to keep paying annual fees for years to come which gradually increase year after year. In some instances - for less desirable resort weeks, as owners default, the HOA (other owners) have to pick up loss until that TS is transferred, and that in turn creates fees to increase. A vicious cycle...

Half bad example. Some Grandiew TS's are in RCI weeks, bur some Grandview TS's are in RCI Points. The weeks TS's are worthless and can be had for $1. Most of the Grandview 2-BDRM RCI Points TS's get 80,000 RCI Points/Year or more (if not EOY or worse). These RCI Points TS's have value as noted by their resale vale, although a fraction of what they were originally purchased for from the developer.

Each TS must be evaluated separately for determination of its value, if any.
 

artringwald

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Why would anyone give it away? So many reasons:
1) The MF's keep going up.
2) The cost of traveling keeps going up.
3) People that borrowed money to buy from the developer have buyer's remorse each month when they make the loan payments.
4) Economic conditions change. People loss jobs, have unexpected expenses, have relatives needing their support, etc.
5) Poorly manged properties get run down and undesirable.
6) As people age, they may not be able to travel.
7) People get burned by cash upfront scammers and can't find a legit way to sell.

There's probably plenty more reasons, but as other have said, it's supply and demand. Unethical timeshare salespeople have sold so many units to people that can't really afford or use a timeshare, that the market is glutted with sellers and not many buyers. Unfortunate for them, but good news for informed buyers looking for more timeshares. Thank you TUG for helping sellers and buyers connect! :clap:
 

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Good question! Here's why I did it. My mfee is $1000/year for an every other year week at a respectable resort with options and points and II membership. So, $2000 for a vacation, whether I take one or not. That's about my entire vacation budget, so I'm tied in to the TS system I own. Therefore, I can take my week and not worry, or spend a whole lotta time and effort to exchange my week for another week within my TS system (and usually my week doesn't cover a whole week where I want to go, like Maui or Key West), or go crazy trying to figure out how to use II, and maybe get a little more flexibility. I'd much rather take my vacation budget and go on the vacations I'd rather go on, with a lot less hassle and more bang for my buck. I looked at the market, saw that TSs that I own were on the market for anywhere between $5000 to $1. It was worth it to me to put the TS on the market for $1 and easily move it than to try to make any $$$ back from it. I can afford the loss of the initial cost and have chalked it up to learning experiences in life column (don't break your financial rules even though you are exhausted after a whole day skiing and a 3-hour selling session).
 

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if a timeshares maintenance fees are less than comparable rentals that timeshare has value. How much value depends on how much less the maintenance fees are and of course, supply and demand

Conversely if a timeshares maintenance fees exceed comparable rentals that timeshare has no value (or a negative value)
 

VegasBella

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My belief about why resale prices are sooo low is that the demand is tiny. The resale market is very small. Most people who own timeshares don't know anything about the resale market. When the demand is so low, the prices are low too.

There are multiple reasons the prices are low but I think the main reason is simply that the demand is low.
 

TUGBrian

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indeed the industry does its best to keep the resale market a secret to the average Timeshare owner.

would literally transform this industry overnight if even a decent percentage of owners had any idea you could buy a timeshare from an existing owner, vs from the resort.
 
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