Resale market is cheaper time-share option

By Bruce Mohl, Globe Staff, 04/14/02

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Bentley Brook Mountain Club, a time-share resort in Hancock, is enticing Boston-area residents to drive to Western Massachusetts and submit to a 90-minute sales presentation by offering them four round-trip airline tickets, six two-night stays in various cities, and restaurant vouchers.

It's an attractive offer for someone interested in all the freebies (even though there's always a catch), but all the incentives can have negative consequences for the serious buyer. The high cost of marketing time shares - the airline tickets, the restaurant vouchers, the telemarketers, the sales commissions - sharply inflates the purchase price, by some estimates as much as 50 to 60 percent.

It's no wonder that many people serious about buying time-share weeks are turning to the resale market. With resales, it may be harder to find a week at the resort you want when you want it, but the prices are far more reasonable.

Last week, they ranged from $14,500 for a week at the Marriott Cypress Harbour resort in Orlando, to $7,775 at the Lawai Beach Resort on Kauai, to $1,000 at the Vidafel Resort in Mazatlan, Mexico. All of the units had two bedrooms and were available in high season.

"It's a buyer's market," said Billy Stevenson, general manager of ERA Stroman Realty in Conroe, Texas, a 20-year-old agency that brings together buyers and sellers of time-share weeks.

The resale market is still evolving. Companies like Marriott run a resale network exclusively for their own time-share properties. There are companies that buy time-share weeks wholesale and resell them. There are online realtors that bring far-flung buyers and sellers together. And there are individuals striking one-on-one deals using newspaper classified ads (the Globe's real estate section has a time share section each Sunday), Web classifieds, and even auction sites like eBay.

What makes the resale market so attractive is that the product in most cases is exactly the same as if it had been purchased from the original developer. (Some developers, like Marriott, limit certain exchange benefits if the property is resold independently.)

What makes the resale market intimidating is the fact that often you're buying a unit sight unseen from someone you don't know.

"Let's face it, with the resale market you are dealing with someone and something you can't see, touch, or feel," said David Skinner, president of Holiday Group in Seattle, which buys time-share weeks and then resells them.

The first thing to do is educate yourself about time shares. View them as prepaid vacations, not real estate investments, because they rarely appreciate in value. Understand the costs. Become familiar with the process for exchanging your week for a week elsewhere. Learn the terminology of fixed and floating weeks. Determine whether time-share vacationing fits your lifestyle.

A good place to start learning the pros and cons is the Timeshare Users Group, at www.tug2.net. It was started by a frustrated time-share owner, and its content is generated by members for other members. There are resort reviews, rankings, and historical sales data. There are chat rooms, advice columns, and classified ads with time shares for sale and rent. Membership costs $15 the first year and $10 a year thereafter.

There are two philosophies on resale purchases. Some people, buy the cheapest time share in the highest-demand market and then use the week to trade. Others dislike the hassles of trading, preferring to buy a week in a favorite spot and return year after year. But finding the perfect week will probably involve some compromises.

The Eagle's Nest in Marco Island, Fla., for example, is a beautiful resort on the beach, ranked 8.47 out of 10 by TUG members who have stayed there. I found weeks renting for anywhere from $1,100 to $1,400, and selling for anywhere from $5,500 to as high as $14,000. But most of the weeks for sale were in the summer or fall, not the preferred high winter season.

Once you decide where you want to buy, look far and wide for resales. Use an Internet search engine such as Google, call local realtors in the area, and try Web sites like triwest-timeshare.com, holidaygroup.com, timesharelink.com, timeshareresalesusa.com, and timesharetravel.com.

The easiest way to buy may be through a real estate broker. ERA Stroman, for example, handles all the paperwork, but charges the seller an upfront fee of $499 and a commission of 10 percent, while assessing the buyer closing costs of $400 to $600.

Buying direct from an individual seller or through an auction site puts a greater burden on the buyer, but the trade-off is greater savings. Check TUG for helpful suggestions on evaluating a seller, buying title insurance, and processing the paperwork.

Bruce Mohl can be reached by

e-mail at mohl@globe.com.