Timeshare
Value Factors
“Pricing – What is the minimum
you are willing to take?”
 As in traditional
real estate, the desirability of a property for sale
as well as the supply and demand for that property weighs
heavily on timeshare valuation. However, this is where
the similarity ends between traditional real estate
and interval ownership price assessment. In traditional
real estate, it would be difficult to find two similar
properties where one sold for almost half the price
of the other. Two houses located next door to each other,
both in similar condition and size, and both built the
same year by the same builder would not sell for $50,000
and $100,000, respectively. In the timeshare resale
market, this scenario is common.
Standard comparative market analysis appraisal
techniques can be questionable for timeshare, and currently,
there is no bank bluebook for timeshares.
Timeshare properties have value factors unique to the
industry. The main factors are:
- season availability
- exchange benefits
- extraordinarily high marketing costs
- types of ownership
- area and project amenities
These factors are unrelated to traditional real estate.
Purchase value is determined by what a buyer is willing
to pay and what a seller is willing to accept. Seller
inducement or motivation to sell (e.g. divorce, death
of family member, financial hardship, or just being
tired of using the unit, etc.) is also a factor.
Since the resale market is diverse and the result of
individual negotiation, it is impossible to predict
the sales price of any specific interval.
If owners are limited in their options for resale assistance,
it will literally feed the price erosion problem. Sellers
can end up with their backs against the wall as a result
of fruitlessly attempting to sell the unit themselves
or trying to sell through an Internet bulletin board.
These bulletin boards or advertising websites may provide
a price list, photograph and general description of
the property, but not the other essential services (e.g.
consulting, negotiations, contracts, etc.) These bulletin
boards and advertising websites actually increase price
erosion and do not offer the consumer the professional
assistance needed to complete negotiations. Procuring
prospects is only one step in facilitating a sale. Contracts
have to be prepared, escrow must be held, and ownership
must be transferred and properly filed to assure the
new owner’s usage. A licensed resale broker specializing
in timeshare resale can represent the seller and perform
all the services needed in a proficient manner.
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