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Who Benefits from Low Resale Values?

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At Bay Tree, one of our primary goals is driving prices higher for the timeshare resales we work with. (If you are thinking about buying, now is the time to do it because prices are going up!) We feel that prices have been artificially low, especially for the “non-legacy” properties our clients are selling. In our experience, many resale buyers consider a 20-30% discount off resort retail pricing to be a great deal on its face. Why, then, would some owners still resort to selling their timeshares for pennies on the dollar elsewhere on the internet? And why do some purported reputable websites still claim you can’t sell your timeshare for a fair price?

The Latin expression “Cui Bono” can be translated as the question “for whose benefit,” or “for whose profit.” So, who exactly does benefit from low resale prices? Let’s consider the various parties involved:

The Resorts

Resort Developers definitely do not benefit from lower resale prices that may cast doubt on the underlying value of their offerings. ARDA is the American Resort Development Association, our industry’s premier trade group. As an ARDA member company, our experience has been that Developers are very supportive of the growth of the resale market. A vibrant resale market with fair prices reflects positively on the resort; making it easier for Developers to sell more “new” timeshares at the retail level.

Happy Owners

The majority of timeshare owners are satisfied and have no interest in selling their properties. For these owners, the value of their timeshare is in the vacations they enjoy with family. Resale values, whether high or low, aren’t really relevant to Happy Owners: While they may not care what their timeshare is worth, they benefit nothing from lower resale prices.

Sellers

The median price of new timeshare today is about $20,000. With that much invested, owners wanting to sell do not benefit from lower resale values.  Many of our clients still have a mortgage on the timeshare property they are selling; they are unable to sell for less than their mortgage balance without bringing cash to closing. Timeshare sellers clearly do not benefit from lower resale values.

Bay Tree Solutions

Our clients hire us because they want to sell a timeshare at a fair price, not a low one. Achieving our clients' goals is our mission, and happy clients love to send referrals. Additionally, since lower resale values would discourage potential advertisers from using our services, we definitely do not benefit from low prices.

Opportunistic Third Parties

The only clear beneficiaries of lower resale values are third-party companies that have leveraged artificially low prices for financial gain. Real Estate Brokers selling timeshare resales on a commission basis have no incentive to push for higher sale prices: They typically charge the same flat-rate commission amount (around $1,500) regardless of sale price, and it’s a lot less work to sell timeshares cheap.

Forum Websites that traffic in despair also clearly benefit from the low resale prices they perpetuate: Bad news is often easier for owners to believe than good news, even if it’s fake news. These forum/self-help type websites cost little to create and maintain. Their negative content about timeshare tends to rank well in the search engines; drawing in a large user base willing to pay a small monthly fee to participate. Collecting just $5 a month from 100,000 users means $6 Million per year of revenue generated for the website owner - all of it pure profit. Many of these sites add even more profit by hosting pay-per-click advertising; selling their users to the highest bidder.

No Interested Parties Benefit from Low Resale Values

All the parties with a vested interest in the outcome want higher resale values, not lower. Those parties include the developers, timeshare sellers, and Bay Tree Solutions. Happy timeshare owners are largely indifferent. Opportunistic third-parties are the only ones who profit from artificially low resale prices – and as such, they should be avoided whenever possible. Avoid them long enough and they go away; allowing the resale market to flourish like never before!

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