Timeshare Resales
If you own a vacation timeshare — the use of a vacation home
for a limited, pre-planned time — be cautious about people offering to help you
resell it for a fee. Most of these sales programs are bogus. The market for resales is
poor. One recent survey found that only 3.3 percent of owners reported reselling their
timeshares during the last 20 years. Still, desperate to sell, many owners have been taken
in by timeshare resale scams.
The Resale Scam
Unscrupulous companies may contact you by phone or mail. Salespeople are likely to
tell you the market for resales is "hot" and that their company has a high
success rate in reselling units. They may claim to have extensive lists of sales agents
and potential buyers. For an advance "listing" fee, often $300 to $500, some
salespeople promise to sell your timeshare for a price equal to or greater than your
purchase price. To further entice you, they may offer a money-back guarantee or a $1,000
government bond if they can't sell your timeshare within a year. Others offer to purchase
your timeshare for 80-90 percent of its appraised value if they don't sell it within a
specified time.
In reality, the market for resales may vary considerably, depending on the location and
time of year. The lists of sales agents and buyers may consist of people who have never
heard of the company or have no interest in buying a timeshare. It may be unlikely that
the company can sell the timeshare at all, let alone at a price equal to or greater than
your original purchase price. In addition, many consumers whose timeshares don't sell
after a year may be presented with a government bond worth only $60 or $70 or told there's
no refund on their listing fee.
If You Want to Sell
If you want to resell your timeshare and are approached by a company offering to
help, consider taking these precautions:
- Don't agree to anything over the phone until you've had a chance to check out the
company.
- Ask the salesperson to send you written materials.
- Find out where the company is located and where it does business.
- Contact the Better Business Bureau, state Attorney General, and local consumer
protection agencies in the state where the company is located. Ask whether complaints have
been lodged against the company.
- Ask if the company's salespeople are licensed to sell real estate by the state where
your timeshare is located. If so, verify this with the state licensing board.
- Be wary of companies charging an advance "listing" fee for services. Consider
opting for a company that offers to sell for a fee only after the timeshare is
sold.
You have several other resale options. You may try selling your timeshare yourself, by
placing an ad in a newspaper or magazine, or contacting a real estate agent familiar with
the area. If all the timeshares have been sold in your development, consider asking the
seller to establish an on-site resales office. As an alternative, you may consider an
exchange program. For a fee, these programs allow you to arrange trades with other resort
units in different locations.
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