Timeshares are a great way to have a vacation at a reduced cost. However, when it is no longer useful for vacations, annual maintenance fees still must be paid. When owners reach this point, they start to look into selling.
There is a lot of misinformation about selling timeshares ranging from selling on auction sites online to finding a broker to do all of the work. The main problem is that many brokers are expensive. The best option is to find a way to sell at little or no cost to the owner.
Selling a unit is difficult because there are many more timeshares for resale that there are people who want to buy. Many people don’t realize it’s even possible to buy a resale timeshare. They simply buy a new one.
The ironic part is that most timeshares are used unless the buyer is the first person to purchase it in a particular resort. Many owners are willing to sell their timeshares for a fraction of what they paid, just to get out of paying the maintenance fees. Because this is the reality of the market, there are many companies online that say they will sell a unit if the owner gives them an up-front fee.
Some places charge a fee-of-many-names. They may call it an appraisal fee, a marketing fee, a market analysis fee or an advertising fee. According to research, the vast majority of resales are not the results of any of these fees.
There are some fees that may help. For example, there will be fees for placing an ad in a sales publication or for membership fees to sales companies that allow the owner to place as many ads as he or she wants.
The first step is to find out a realistic price. It may be hard for many people to believe, but most timeshares sell for 30 to 50 percent of the price the owner paid to the original developer.
Unless the owner can afford to put on a glitzy presentation, tremendous pressure on customers and offer incentives, they will not sell their timeshare for anywhere near the amount they paid for it. If they set the price at the right level, it will sell.
The best way to find out the right price for a resale is to call the original seller and ask the price of a similar unit. If the sales people won’t help, the owner can call the executive director of sales to ask the price. It is also recommended to check the current and completed eBay auctions as well as the real estate listings in the same county. Owners can also search Google for the prices in their area.
Some of the publications where it is recommended to advertise are:
These sites may have a minimal advertising fee. Owners can also advertise in newspapers and the Sunday classified ad section. Craigslist.org offers free exposure for timeshares resale and rental.
Once the unit goes up for sale, the owner will receive a barrage of calls and emails offering to resell the property at or above the asking price for a fee from $99 to $800. Owners should not agree to this. Not only because the fee is high, but also because there is no guarantee the property will sell.
The ads should be truthful and accurate. They should not exaggerate the view or lower the maintenance fee, and should clearly state if the week is fixed or floating. When the buyer checks with the resort to verify the information in the ad, they may pull out of the sale if they find untruthful information. If the sale goes through based on untruthful information, the buyer may take the seller to court.
Along with brokers wanting an up-front fee, there are scammers that contact owners. One current trick is for scammers to offer more than the selling price to the owner with a certified or foreign-bank check. The check will clear the owner’s bank and he or she will send the difference to the buyer, but after the buyer is long gone, the check will bounce and the owner is stuck with the loss.
Another scam is to invite the owner to a meeting at a local hotel and tell him that the scammer will take the unit for a few thousand dollars. They may also say that the loss can be deducted from the owner’s income tax return. This is not true. If anyone offers to take over the resale of a unit for a large fee, it’s a scam.
Timeshares are much more marketable if they do not come with a loan payment. Most buyers will not take a loan payment, and the seller needs to either pay off the loan, or find a way to reduce it. One way is to refinance the loan at a lower interest rate.
Another option is to take a home equity loan and pay off the high-interest timeshare loan. If it’s not possible to lower the loan payments, it may be worth renting the unit each year to minimize losses.
When the owner gets legitimate responses to his or her ad, they should respond quickly. If the offer seems too low, the owner can make a reasonable counter offer. Once the deal is made, it is recommended to use a low-cost closing service such as Timeshare Transfer or JRA Services.