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. With traditional real estate it is unusual to locate similar properties in the same locality with widely different selling prices. Homes located adjacent to each other, with similar characteristics, would not normally sell for widely different prices. In the timeshare resales market, this scenario is common.
Market comparison appraisal methods do not work well for timeshares, and there is not standard bank valuation for them either.
Timeshare properties have value factors that are unique to the industry. Several of these determining factors include, very high marketing costs, season availability, and exchange benefits. Some other factors include the location of the property, type of ownership and the amenities available in the timeshare resort in question. These factors are unrelated to traditional real estate. To obtain a concept of the wide differences in similar timeshare prices do a web search on “timeshare resales Florida“.
As always purchase price is determined by the amount a seller is amenable to accepting and the amount a buyer is willing to pay. It is also determined by seller inducement or motivation to sell, divorce, death of family member, financial hardship, or just being tired of using the unit. Another factor is that there is usually and auction format of sales that induces buyers to bid against each other.
A good auction format is one that includes special sales incentives for its agents. These incentives help promote the highest marketable price, which in turn helps to prevent price erosion.
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 sellers have limited resale options, price erosion will be significant. 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 offered. These bulletin boards and advertising websites actually increase price erosion and do not offer the consumer the professional assistance needed to complete negotiations. Finding a potential buyer is only one step in the sales process. A contract must be drawn up, escrow accounts created, and legal ownership title must be transferred to the buyer. 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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