Sell Timeshare

We love to check out the advice real estate guru Barbara Corcoran has to offer for buying or selling a home or vacation property. Besides the fact that Corcoran took a $1000 loan and turned it into a five billion dollar real estate business, she is also the expert who told viewers of The Today Show to turn to online timeshare advertising—and specifically named Sell My Timeshare NOW – as the recommended way to resell timeshare.

Here’s what Barbara Corcoran’s advice about selling your home that’s equally meaningful for anyone who wants to resell timeshare.

• Remember that the most enticing homes on the market are the newest to the listings and the lowest priced.
• Stay ahead of the pricing curve in a down market.
• Be prepared to price your house 15 percent below comparable homes on the market.
• If you have to make a price reduction to get your property sold, don’t make it a tiny one that just causes your property to languish on the market even longer and eventually results in you making a second, third, or even more price drops.

In a good real estate (or timeshare sales and timeshare resales market), price your property aggressively in order to get the sale, pricing it as low as competitive properties. And in a difficult market—if you really want to sell your timeshare or your home—be the most competitively priced property in your market.

More about Barbara Corcoran from The Timeshare Authority:

• The Today Show Recommends SellMyTimeshareNOW.com for Timeshare Resales
• The Today Show’s Real Estate Expert Who Suggests Sell My Timeshare NOW, a Star on Shark Tank

And just for the fun of it, see if you can catch reruns of Barbara Corcoran wheeling and dealing during this season’s Shark Tank on ABC.

With everyone looking to cut back on monthly bills, Sell My Timeshare NOW is often asked how timeshare owners can refinance timeshare on which they are still making payments. Timeshare owners also want to know whether they can sell timeshare they still owe money on, and whether they can borrow money against a timeshare they own in full.

These are all very important and timely questions and over the next three days, The Timeshare Authority will look at each of these issues, starting with if and how you as a timeshare owner can refinance a timeshare on which you are still making payments.

First let’s be candid and say that money is tight everywhere and credit is even tighter. But if you can lower your interest rate, you will lower the monthly payment you are making on your timeshare.

Suppose you owe $5,000 on a timeshare that is financed at 17 percent interest. If you take 5 years to pay off the debt, your monthly payment will be $124.26, for a total payout of $7455.60. If you can get the interest rate down to 11 percent, you only save $15.55 per month, which doesn’t seem like much, but over a five year period adds up to $933 saved. And who turns down $933?

Now let’s do the same comparison using a larger debt. $25,000 owed on a timeshare, financed at 17 percent means a monthly payment of $621.30 over a five-year period. At 11 percent, the monthly payment drops to $543.56. The final tally on the higher interest rate comes to $37,278, while at the 11 percent rate comes in at $32,613.60—a savings of just over $4,664 during the five-year payoff period.

For further comparison, let’s look at the $25,000 debt at both interest rates, only this time spreading them out over 10 years. At 17 percent, but a 10-year payoff, the monthly payment drops to $434.49, while at the 11 percent interest rate over this same period, the payment drops to $344.38.

Clearly, if you can refinance timeshare debt taking your monthly payment from $621.30 (the higher interest rate, shorter term) to $344.38 (the lower interest rate and the longer term), that’s enough reduction to provide relief in many household budgets. However, remember that as good as it sounds to save almost $277 monthly in your payment, in the option that calls for lower interest but also longer term; you are paying more money in the end—substantially more. That innocent sounding $344.38 turns into a whopping $41,325.60 when paid out over a ten-year period.

If you need the relief now, then it makes more sense to get into a payment plan you can afford than go with one that will result in late fees, negative items on your credit report, and ultimately higher interest rates on everything you buy. When current cash flow dictates that you must opt for paying off a debt more slowly in order to keep your monthly payments as low as possible, you can try to offset the long-term cost of the interest by paying extra payments whenever possible to ultimately shorten the period of your debt and lower the overall amount.

We used 17 percent as our higher interest rate because many timeshare companies that offer on-the-spot financing have historically done so at roughly this rate. For comparison, we used 11 percent, because consumers can often obtain credit cards with 11 percent interest rates, and transferring your timeshare debt from developer financing to a credit card may be an option for some timeshare owners. If you happen to have a credit card with a lower than 11 percent interest rate, then your savings will be even greater.

The Changing Financial Picture Limits Timeshare Refinance Options

Yet many consumers with excellent credit histories have been surprised to see their credit limits slashed at the same time their credit card company has increased their interest rates. With less open credit and a higher interest rate, refinancing timeshare to your credit card may not be your best option.

In 1996, Tammac Financial became one of the first lenders to offer timeshare refinancing, among its loan products. At this time however, Tammac Financial is not accepting timeshare financing applications, and explains it with this message that appears on its website, “Unfortunately, due to economic conditions beyond our control we are no longer accepting new loan applications.”

Another lender with a history in timeshare financing and timeshare refinance is First Again, however, currently, their website bears a similar message, “Unfortunately, due to economic forces beyond our control, First Again is presently unable to accept new loan applications; however, we are continuing to service our existing customers and recent loan applicants.”

If you belong to a credit union or have a good standing with your bank, you may be able to obtain a signature loan to refinance timeshare debt. These loans do not use the timeshare to collateralize the debt, which means there is no reason for add-on costs to the loans such as a timeshare appraisal. In fact, there are very few instances in buying or selling timeshare or financing timeshare (either new or as timeshare resales) in which you need a timeshare appraisal.

Before you make any decisions about refinancing a timeshare or transferring existing debt on your timeshare loan, look at the following:

1. Does your current loan have a prepayment penalty?
2. Does the new financing you are planning to obtain have such a penalty?
3. Are you currently able to claim your timeshare mortgage interest as a tax deduction?
4. Will you be able to claim your timeshare mortgage interest if you transfer the debt to a new loan or a credit card?
5. Are there origination fees or transfer costs for setting up the new debt?

Somewhere in your desk drawer, you have a calculator. Get it out and use it to fully analyze and compare your options. Run multiple scenarios, just as we have done in the comparisons above.

If you are uncertain about changing the way you finance your timeshare, talk with your financial advisor, bank representative, or someone you trust and who is well versed in personal finance. These days, we all need to think twice and act prudently when it comes to our dollars.

And check in with The Timeshare Authority for tomorrow’s timeshare blog; we’ll be looking at your options for selling timeshare on which you still owe money.

More excitement and expansion as we welcome Carol Kollm, the new Director of Marketing at Sell My Timeshare NOW.

Carol Kollm comes to us from CourseAdvisor Inc., a Washington Post Company, where she was the Director of Product Management and Design. She is also co-founded AlphaStrand, a strategic web development company that serves Boston law organizations and healthcare, including Partners Healthcare.

We are very happy to have Carol as part of our Sell My Timeshare NOW marketing team. Her range of experience is extensive and includes Web Usability and Analytics, Product Definition and Design, Project Management, Conversion Optimization, SEO, (SEM) /PPC, and Social Media Marketing. We know Carol will be an asset to our talented staff. We’ll be putting her online marketing expertise and landing page optimization experience to work as we take Sell My Timeshare NOW into a growth period, focusing on new services, technologies, and alliances all designed to target the needs of consumers as well as the changing needs of timeshare developers.

Within every challenge lies opportunity. At Sell My Timeshare NOW, we’ve taken on the challenge of the economy and used it as a springboard to expand our services, to analyze old mindsets about the timeshare industry, and to step up to the plate with new solutions. Adding Carol Kollm to our staff, along with other new changes we are making is part of the fresh new page we are helping to write in timeshare sales and the advertising and marketing of timeshare resales and timeshare rentals.

Follow this link to read Sell My Timeshare NOW’s media release about our new Director of Marketing.

Could some residential homeowners or investors find opportunity by selling properties as fractional ownership vacation homes?

Good question and one addressed in a recent issue of Perspective Magazine. David M. Disick, president of David M. Disick & Associates writes about the opportunity that fractionals may hold within the real estate market. Disick is considered to be a pioneer in the fractional vacation home industry. He is the developer behind the Private Residence Club, Franz Klammer Lodge in Telluride, Colorado and is currently developing Club ElyseeSM.

Is a Fractional Just Another Name for a Timeshare?

If you are unfamiliar with the concept, let’s start with the argument of whether timeshare and fractionals are the same product on different scales. Fractionals afford owners the chance to buy a percentage of ownership in a vacation home. The property is typically a luxury or uber-luxury home, located in a desirable vacation destination. Unlike a timeshare where there are often as many as 50 individual owners, each claiming a week or perhaps two of interval ownership, a fractional is typically owned by a limited number of owners (10 or fewer) who many own several months of interval usage time.

Good approach? Probably it is, since statistics show the fractional industry accounted for some $2 billion in sales in 2007 and another $1.5 billion in 2008. Fractional industry expert Sherman D. Poptvin points out, “Even in the economic downturn of 2008, the fractional market was still the fastest growing real estate product.”

The logistics of sales for fractional ownership vacation property comes down to this: A vacation home in a highly desirable location may be a tough sell at $5 million, but expand the ownership pool to 6 or 7 individuals at $750,000 apiece and you have a much greater market of potential buyers from which to draw.

But here’s the warning. While selling a luxury home (either as the current owner or as an investor) to multiple joint buyers may be a way to expand your market, Disick warns it, “is not for the uninitiated.” He calls the concept relatively simple and potentially very profitable but cautions, “A wide variety of skill sets is required for a successful development.”

Fractional Expert David Disick’s Advice for Selling a Vacation Home as a Fractional

• Before you do anything, consult a financial and a legal advisor.
• Location, location, location. Prime locations in prime resorts are essential for a successful venture into fractionalizing a property.
• Check the zoning laws. Not all properties can be turned into fractionals.
• Find financing sources for your venture. You may even have to educate them about the concept and the opportunity of fractionals.
• Study the rate of return expected as well as the return on investment.
• Look at your pro forma in a best and a worst-case scenario.
• Find properties that you can acquire at a favorable price.
• Be prepared to update the home’s furnishings and technology, or to furnish the home from scratch.
• Be prepared to make any necessary repairs to the property.
• Consider the needs that will arise for property management, concierge or reception services, reservations, bookkeeping and auditing procedures, and documentation for ownership, as your starting needs, with the eye-opening recognition that more needs will become evident as you move through the process.

And lastly, don’t let this list scare you off. As Disick advises, the market is sure to bounce back. He suggests that if the approach of selling fractionalized property appeals to you, then you should prepare now in anticipation of the “pent up demand” there is sure to be from people who have, during this recession, delayed their vacation ownership purchases.

(Source: Perspective magazine, July 2009.)