Timeshare Costs Tips

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What is an average price of a “Red” timeshare?

Red Timeshares Costs

Believe it or not the average price of a red timeshare week at a first-rate destination resort is over $25,000. Key developers such as the likes of Disney, Hilton and Marriott are averaging $35,000 and up. Hyatt at Beaver Creek, Colorado was sold out for weeks for as much as an unbelievable price of $333,000. You can believe it; the Timeshare/Vacation Ownership Industry has proven itself at last! Who's buying red timeshares these days? Data information shows that a large amount of the people who buy into timeshares today are of a high IQ's, are bringing home incomes larger than 70K and are college graduates. Guess it pays to get that degree!

What kind of upfront listing fees would I encounter?

Upfront listing fees

Upfront listing fees can fluctuate from between $50 to $500. Developer and/or resort on site programs typically have a $50 listing fee with a 30% commission at the close of escrow. In comparison, off-site company fees range from $195 to $500 with a commission that is from 0% to 50%. With such a hefty difference between off site companies, it is grave importance that you carefully compare any companies program with at least one licensed timeshare broker before you list!

How do I donate my timeshare and what are the tax benefits?

Donating Timeshare

Sometimes sellers would actually be better off financially donating their timeshares and claiming it on their year-end taxes.

The average person spends anywhere between $800.00 and $3,000.00 trying to market their timeshare which eventually sells for $1,500.00 to $4,500.00. How about donating your timeshare? The cost to donate is usually nothing unless there is a need to request a lost deed from the county (a $25 charge) or if they have to draft an Affidavit of Death due to the deeded owner's passing ($75 fee). The closing process is around 4 to 6 weeks if there are no unforeseen circumstances. Then, as soon as they transfer the ownership of your timeshare, the charity that you have chosen will send you a receipt for your tax write-off. Your donation receipt will be determined by the fair market value of your donation.

What does the term “ten year savings” apply to?

Timeshare Savings

Way in the bygone days of timesharing, developers frequently used the 10-year savings formula for ascertaining the value of a timeshare. Owners needed to look at timeshares as a long-term item. The 10-year savings guideline is one of the ways to determine the resale value of a person's timeshare.

Ten year savings example for a studio timeshare at the Whaler in Maui, Hawaii purchased in 1992:

Equivalent hotel/day - $ 150

Timeshare maintenance - ( 40)

Hotel savings - 110

7 day savings - $ 770

$5,500 4% 1992 CD loss - ( 220)

Adjusted annual savings - $ 550

Ten Year Timeshare Value - $5,500/wk

You will note that the timeshare will pay for itself in 10 years. Therefore usage and resale after that time period is pure profit. If you compare this on the premise, that if you use your CD savings for your annual vacations, your savings will be gone in less than 6.5 years!

Do I really need an escrow company?

Timeshare Escrow

It's not advised to buy a timeshare without using a third party timeshare escrow company. Whether you purchased your timeshare on your own, through a friend, possibly a referral, the resort itself, the developer or even through a resale broker) always use a third party escrow company to accurately deal with the paperwork. You can be guaranteed piece of mind by paying the moderately small escrow fee that might save you thousands of dollars, definitely, hours of time and avoid possible litigation.

What should I consider if I do a net listing?

Timeshare Net Listing

If you are considering a net listing, please keep in mind that you are willingly giving up your rights to negotiate your sale with any possible buyer. If the market price rises, you will not reap the benefits – your broker will. Where there is little or no profit for your broker, there is no incentive for him to sell. It would be wise that if you have a particular price in mind, to just add a reasonable commission to it and sign a regular listing agreement. And for goodness sakes never sign a net listing for over 30 days and never, never, pay an upfront fee for a net listing!


Timeshare Financing

All new timeshares provide some sort of financing, there is very little conventional financing that is available for timeshare resale's under $5,000. Nonetheless, on the whole cost savings more, than makes up for the lack of financing. Regardless there are two alternatives that may be available to the buyer but only with the help of the seller. The first one is seller financing and the second is to take on the existing loan.

Let's talk about seller financing: a fair guideline for both the seller and the buyer would be a down payment of 30% with and interest rate of 10% for a term of 36 months.

If you are about to assume a timeshare loan, you can expect to take on an interest rate anywhere from 12% to 18% with 3 to 7 years left on the loan. This is still a great opportunity for a timeshare owner!

Should I use a broker?

Broker Information

Before signing a legal contract to work with any individual licensed broker, inquire about their informational package and request a copy. Enclosed should be a complete, in depth explanation of the type of services the broker plans to provide and the fees involved. Nearly all brokers will ask for a minor upfront fee for listing a timeshare and a good faith deposit that ranges any where from 5 to 10% to make offers for a prospective buyer. In most situations the seller will also pay a commission of 10 to 30% at the close of escrow. Read the broker's information package from beginning to end so there will be no hidden surprises in this area!

How do I calculating the total cost of a timeshare?

Calculating costs

In calculating the total cost of a timeshare or vacation plan, you must include mortgage payments and expenses, travel costs, annual maintenance fees and taxes, closing costs, broker commissions, and finance charges. Remember all fees and taxes have to be paid whether you use your unit or not. Also check into the possibility of a maintenance plan that supports a fee cap.

What should I know about net listings?

Timeshare Net Listings

Net listings are created to give sellers a fixed dollar amount at the close of escrow regardless of the final sales price. Even though this is not illegal, net listing has brought about abundant abuses and misrepresentations. Because of this, the real estate department of almost every state tries to discourage them by demanding full disclosure of the final selling price to both the seller and buyer.

What should I know about commissions?


Timeshare commissions range any where from 10% to 30% of the selling price for most transactions over $6,000. If the transaction is below $5,000, the commissions may be higher plus are subject to a minimum. Regardless the situation the commission amount should never exceed 50% for any business deal. All commissions are to be paid at the close of escrow to provide the maximum incentive to your agent to successfully complete your transaction.

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