What is the industry doing about the secondary timeshare market?

First in a series of resale articles from RedWeek is now available - give it a read & let us know what you think:

http://www.redweek.com/resources/ask-redweek/timeshare-resales-arda-predictions

Do you have experience with any major developers' buy-back programs?

In the past we were told that if I bought on the retail market the group that owns the resorts would not allow the new owners full privileges of ownership. Is this still true?

To Jeff Weir: Based on what you have learned, do you see any hope in the future for Diamond Resort point members to ever be able to extricate themselves from Diamond membership by any means other than just walking away?

I recently contacted the MVCI sales team regarding a resale of two weeks. They offered to list our Fords Colony week for sale, but they would neither list nor buy back our Waiohai. We love both resorts, but we cannot travel as much as we hoped we would. (Same story that's been told many times over.) We have a contract in place, so it remains to be seen if they will sell it.

I own (paid in full). the 52-week (New Years' Eve) Platium Plus 3-Bdrm Timeshare @ the Marriott Grand Chateau in Las Vegas. Because I wanted to maintain control, I did not convert to the points program. I own 2-week(s), I can break up, and rent the 2-Bdrm or 1-Bdrm. I usually deposit with Interval, I get more vacations. I'm tired of the annual maintenance fee increaes, I've tired (unsuccessfully)to sell it. Marriott has offered to buy it back, but not the 46K they currently sell it for 46K. Marriot has offered me 12K. Marriott is not interested in reducing the fees, or helping me, they want it back so they can rent the week(s) @ the premium on New Years' Week. I want to sell it, but not @ 12K......I do intend sell it....Any suggestions ?

kyliec wrote:

First in a series of resale articles from RedWeek is now available - give it a read & let us know what you think:

http://www.redweek.com/resources/ask-redweek/timeshare-resales-arda-predictions

Do you have experience with any major developers' buy-back programs?

Thanks for your question. The answer varies upon the developer. I am a Marriott owner so have direct experience with its program. If you buy a resale from Marriott, and agree to buy a minimum amount of Destination Club points (they call this a bundled resale), the resale will be entitled to full privileges in Marriott's internal reservation and exchange program. If you buy a Marriott interval on the resale market, such as through Redweek.com, Marriott will restrict your usage to the following: you can use the interval every year, or you can deposit it with Interval for an exchange. Marriott will not let you convert the newly bought unit into Destination Club points or Marriott Rewards. Those are the only restrictions I'm aware of. The key with all timeshare resales is, only buy a unit you are willing and interested in using. All developers, to my knowledge, will otherwise place restrictions on usage if you buy from anyone but them.

Diamond is very aggressive in selling points but not very interested in getting them back. My personal perspective, as a Diamond owner, is that they are purely focused on retail sales, not buy-backs. That may change over time as more and more owners seek to find a way out of the program. Only way to test this is to call Diamond directly and inquire about selling back your points. At the same time, I would list them on redweek.com to see if there is any interest. If you don't get any nibbles, suggest you try listing your points with a reputable licensed resale broker. They will give you straight information on whether they can sell your unit. Best part is, they only get a commission if it sells.

I have attempted to resale/list my Marriott Timeshare (TS)with a real estate broker. He was not able to list it on the MLS. This restriction prevents it from being perceived as property. The ARDA should do something about changing that. My attempts to solicit sales, via AD(s) in newspaper, websites etc are not effective. It appears if I am successful, and sell my TS, the buyer may not receive the same benefits indicated in my contract. I love the exchange program etc., but the TS is beginning to have more issues/restrictions.

I am a Marriott Waiohai owner as well and enjoy it very much. Don't understand Marriott's stance about resale because all Hawaii timeshares are valuable. Suggest you just see what happens with Fords Colony and, in meantime, list Waiohai week on redweek.com and see if there is any interest. I can also put you in touch with a Hawaii-based resale specialist, a real estate broker named Wally Akuna, who can list your Marriott on his listing service. He charges a fee, as do all brokers, but it is only paid if there is a sale. Wally also provides monthly updates on resale activity in Hawaii, which is a great resource for me. If you want to check his credentials, Google him. In the meantime, good luck with the Fords Colony contract. My guess is that with the Waiohai week, Marriott will buy it back under their Right of First Refusal contract, if you find a buyer who makes a good offer. Bottom line, sounds like you have two very good timeshares. Worst case, keep them and rent them on redweek.com. I have rented my Waiohai week on redweek several times and the rental price exceeds my maintenance fees.

Thanks for your response. First, there is no MLS for resales. It does not exist. If you sell your week on the resale market, Marriott will definitely impose restrictions on the usage by the new buyer. But that is not a problem if the buyer wants to use the week, just as you have, or if they want to exchange it on Interval. Only restrictions I know of are that Marriott will not let the new buyer exchange the week for Destination Club points or Marriott Reward points. Other than that, most Marriott properties have a real resale value: not what you paid, but what others are willing to buy it for now. Newspaper ads may not give you any results. Most buyers are online now, so try one of the online services. Also keep in mind that the resale market right now is lousy, with many very good weeks and intervals selling for nothing. An obvious option to me is renting your unit. The timeshare rental market is hot while the resale market is cold. Suggest you list your weeks or intervals for rental and see what happens. Good luck and please keep me posted on what happens. I have one other comment. Suggest you contact ARDA directly about your proposal about property. They may have some additional ideas for you.

We bought our Diamond points in Sedona and they are tied to the US Collection. Where do I find a reputable licensed resale broker? Use of these points by new owners are even more restricted than by other companies and Diamond charges them huge sums to have the benefits of Club membership. Diamond has seen to it that these points have little or no value on the resale market.

Susana, Your post is exactly why you can't find a reputable licensed resale broker. Your timeshare is worth less than the commission they would charge. Reputable brokers can't take upfront fees but they also generally won't take less commission than $1500-$2000 and if they don't think they can sell for at least that much they aren't going to want to list your TS.

I've read the comments, and they are very informative, yet quite disappointing; especially, since I would like to sale my TS. If I can't rent/resale, it appears to be worthless, and will continue to drain me. The only offer is from the Marriott, which is robbery considereing what I paid. If/when Federal/ARDA & ARC can correct the sale/resale problems it will take 10 yrs or more. 10 yrs is a long time, and a lot of maintenance fees. I may have to re-consider the offer ?????

Lorrainew62 - Please list your weeks on Redweek at prices you would accept knowing that the resale will lessen uses for the week (reward points and destination points). I have purchased 3 great Marriott weeks using Redweek postings and, while it may distress you, have paid about 25% of the original Marriott sales price. Marriott will not pay you more than about 25% as their resale costs are very high - marketing & sales costs are 46% of their sales dollar and cost of sales are 33.7% (source - 2013 third quarter SEC Form 10Q).

I too have weeks purchased from Marriott and realize that once acquired, these weeks suffered an immediate 75% drop in market value. This will never be disclosed to buyers as it would be very detrimental to the prospect of any timeshare sale.

On the other hand, the great thing about purchases of resale weeks is that one can recover nearly all of the discounted purchase price upon resale.