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Does the Timeshare Resale Market Really Favor Buyers?

Does the Timeshare Resale Market Really Favor Buyers?

Many timeshare resorts offer beautiful facilities, convenient locations, large (or even multi-room) availabilities, and great amenities.  It’s easy to see the appeal of this legitimate product for some consumers.

For those who are committed to purchasing a timeshare, it could certainly be argued that the best option – at least from a financial standpoint – is to opt for an interest available on the secondary market.

Buyers who opt for a timeshare resale are likely to pay significantly less than consumers who buy their interest through the resort developer directly. In fact, it is not uncommon to find legitimate timeshare interests being listed on sites like eBay for as little as a dollar or two, with the seller even offering to cover any closing or transfer fees out of their own pocket.

Compare this to the $20,040 that ARDA, an industry trade group, lists as the average cost of a timeshare interval, and you’ll see why that resale may be such a tempting offer!


Why so low, though? Much of it comes down to the fact that the major timeshare resort developers have systematically suppressed the resale market over time, for the sake of their own bottom line (a topic which our own Michael Finn dissects in some depth here).

Rather than allowing for a product that retains significant value, major industry players have created conditions that artificially repress resale value, and severely limit the options that consumers have for canceling, donating, reselling, or otherwise extracting themselves from their interests when the cost becomes burdensome or their lifestyle changes.

This has created an aftermarket rife with scammers, eager to prey on consumers looking for any sort of solution. At the same time, it’s hard to deny that it has created a “buyer’s market,” since it has created a situation where supply (consumers who want to extract themselves from a timeshare) will generally outstrip demand (those who want to make a long-term commitment to the resort system).

But, for anyone who may now be tempted to scope out deals, it’s important to remember the old saying: “caveat emptor,” or “buyer beware!”

For one thing, buyers who purchase on the secondary market (such as it is), will still be on the line for the traditional ongoing costs of timeshare ownership, including assessments and annual maintenance fees, which tend to rise, year-over-year, above the rate of inflation, and which must be paid whether or not you actually take advantage of your resort.

Further, consumers looking to buy a resale may wish to thoroughly research the policies and procedures of their home resort developer. As this blog has noted before, some prominent timeshare developers “intentionally strip away incidental contractual benefits” when a timeshare is resold, as part of the ongoing campaign to target and limit the potential growth of a viable timeshare resale market.

Here’s some sample language, taken from a timeshare developer’s 2015 SEC filings, that illustrates this matter (emphasis ours):

“Owners generally can offer their vacation ownership interests for resale on the secondary market, which can create pricing pressure on the sale of developer inventory.  However, owners who purchase vacation ownership interests on the secondary market typically do not receive all the benefits that owners who purchase products directly from us receive… While a purchaser on the secondary market will receive all of the entitlements that are tied to the underlying vacation ownership interest, the purchaser is not entitled to receive certain incidental benefits. For example, owners who purchase our products on the secondary market have restricted access to our internal exchange program and are not entitled to trade their usage rights for [Rewards Points]. Therefore, those owners are only entitled to use the inventory that underlies the vacation ownership interests they purchased.”

When it comes to the right-to-use timeshare product, those “incidental benefits” – such as the ability to exchange a timeshare interval, or even spend resort points in a way that best suits the consumer’s needs – may be anything but trivial. In many ways, they’re actually an essential part of the timeshare product, as it typically stands today!

In this way, the “resale” consumer may be paying just as much in fees as someone who bought their interest from the developer – even as they find their access and ease of use severely limited. All things considered, a one-off resort stay booked through an online service provider may prove cheaper and easier for many households.

So, to answer the question posed in the article’s title – in some ways, the timeshare aftermarket does, indeed, favor the buyer. But, in many other, significant ways, any deal that a consumer is able to snag may well be negated in the long run by mounting costs and growing frustrations. It’s hard to call that a win.

Led by Attorney Michael D. Finn with 50 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don’t hesitate to drop us a line with any questions or concerns.

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