Buying a timeshare property may have seemed like a good idea when you signed the timeshare contract. But if you’re taking yet another “staycation” this summer – and really haven’t been able to travel as much as you’d like the rest of the year as well – you may have realized that you aren’t truly benefiting from your timeshare purchase.
Some people buy timeshares as potential investments. But that’s often an unwise move, since timeshares aren’t investments in the traditional sense, and they don’t offer the typical benefits that, say, stocks or bonds might, such as price appreciation or dividends.
Many timeshares also don’t function as traditional real estate investments either, since most timeshare buyers only own a specific and limited portion of a property for a specific week or month during the year.
That’s why most people enter into a timeshare agreement simply to enjoy the privilege of having a vacation home at their disposal. Owning a timeshare, however, comes with a lot of inherent financial risks and may not always be your best economic move – especially in a slow economy.
Fortunately, you do have some options if you’ve signed a timeshare agreement and want to get out of it.Here’s what you can do to get rid of a timeshare you no longer want:
Review your agreement.
You need to determine whether you have a deeded timeshare or a leased timeshare property. A deeded timeshare bounds you to the contract as an exclusive owner, while the leased timeshare means you are only the owner for a set number of years. If you have a deeded timeshare, you have the option to sell it to someone else. If you have a leased timeshare, you may have to keep paying your annual fees until the lease expires.
Consider renting it out.
If you know you aren’t going to be using your timeshare for a certain period of time, consider renting it out to somebody as a vacation rental for extended stays. In some cases, the rental fees you earn will be able to cover the annual maintenance fees you must pay on the timeshare. Just remember that, regardless of whether you use the timeshare or rent it to someone else, you’ll still be responsible for maintenance costs and other fees as outlined in your initial timeshare agreement.
Check in with the company that manages the property.
Some timeshare companies offer services for those who are interested in selling their timeshare, and they may even help to match you up with an interested party. They may charge a fee for this service – which will come out of the final sale price – but this could be an easier way to get that timeshare sold.
With some timeshares, your annual fees may have escalated to the point where you’re not getting much value each year from the timeshare, or you could simply pay to go to another resort and come out cheaper. If high annual fees are the issue, ask your timeshare property management company for permission to deed back your timeshare to the organization. With a “timeshare deedback,” you basically agree to give your timeshare back to the resort.
Advertise your timeshare property for sale.
If you are under a deeded timeshare agreement and decide to sell the timeshare on your own, consider posting your property on reputable site like TUG, the Timeshare Users Group.
TUG offers a wealth of practical, consumer-friendly information for both existing timeshare owners and would-be timeshare buyers. Among the features at TUG are a “Timeshare Marketplace” that lets you sell or rent your timeshare free of charge; a wealth of advice articles about timeshare ownership; and an online forum where you can ask timeshare questions and get answers.
Best of all, TUG provides its members with a sales history database, so you can get the most recent, up-to-date information on timeshare sales and properly assess how much your timeshare is worth.
Aside from TUG, you can also place classified ads for your timeshare on sites like Craigslist and eBay.
Never pay an upfront fee.
Be careful about working with certain companies that offer to “help” you sell your timeshare.
Some of them make lots of upfront promises about getting you fast money for your timeshare, but they may charge high listing and sales fees and really not do much more than post Internet advertisements for your timeshare.
Even worse, many timeshare re-sellers will insist that you pay an upfront fee to unload your timeshare. They may call this a “marketing charge” or a “listing fee;” some may claim it’s a required cost to do an “appraisal,” a “title search” or something else altogether. Whatever the fee is labeled, don’t fall for it.
You should never, ever pay an upfront charge to someone to sell your timeshare. It’s just asking for financial trouble and the potential loss of your money. In fact, some places asking timeshare sellers to pay upfront fees are outright scams.
Still, because a timeshare-reselling agent acts as a third-party between timeshare owners and sellers, some people think that using a re-seller can speed up the sales process. Recognize that any re-seller will charge a fee for his or her services, and this is typically charged as a percentage of the sale.
Also realize that even if you sign over a power of attorney giving someone else the right to sell a timeshare on your behalf, you nonetheless remain the legal owner of the timeshare and are financially responsible for it until the timeshare actually sells.
How to avoid timeshare telemarketing scams
Here are a few tips to follow when dealing with timeshare telemarketers or vacation rentals.
1) If someone promises to sell your timeshare or tells you they have a buyer but need cash upfront DON’T do it! You wouldn’t pay a realtor to sell your home before they sell it, would you?
2) Companies that cold call you are more than likely a scam. Don’t do business with them as legitimate timeshare companies generally never initiate contact with you first.
3) Refuse to be pressured. Legitimate businesses do not demand that you make a snap decision. They welcome your questions and will encourage you to consult with experts and other reliable sources. Do not sign anything you do not understand.
4) Avoid sending cash, check or a money order should you decide to utilize a timeshare rental.