Timeshare Resale Fraud - Selecting a Resale Company
The following are the procedures that ARDA and its members suggest using when choosing a resale company:
- Be prepared by having all your paperwork in order before proceeding (see the resale checklist).
- Ask what methods the company will use to advertise and promote the property. How can you get regular information on the status of the property? Be sure you know exactly what services the company will perform before making any payments, signing a contract or giving any credit card information. Get a written contract with a full description of the services to be provided.
- If you receive an offer from a resale company by telephone, email or otherwise, resist any pressure to make an immediate decision. Ask the reseller to put details of the offer in writing and send the information through the mail or by email. Obtain a written contract before making any payments or providing your credit card information.
- Once you have received the contract, be sure you understand the terms and conditions, including:
- any fees, commissions or other costs you must pay
- whether you can still rent or sell the interest on your own
- how long the contract will be in effect
- exactly what services the company will provide
- who is responsible for documenting and closing any sale
- Some resale companies charge up-front or advance fees for resale activities. The legality of these fees depends on your state law. Check your state law before paying any advance fees. You may wish to consult with a state government agency such as the Department of Real Estate, Real Estate Commission or the Bureau of Timesharing to determine the legality of such fees in your state. A list of such agencies is available at www.arello.com.
- Ask if the company holds a real estate brokers license in its home state. Check with the state real estate licensing agency or www.arello.com to verify the information.
- Understand that, despite what some salespeople may tell you, there are no guarantees that your vacation interest can be resold or rented at a particular price or within a certain period of time. Resale of property is not an overnight process. Do not expect immediate results, but don’t hesitate to check on the progress your company is making on reselling or renting. If you have listed your timeshare with a resale advertiser (rather than a licensed broker or sales person), any buyer or renter inquiries will usually come directly to you.
- If you have a problem, report it to the proper agencies: The Better Business Bureau, state and local real estate commissions and consumer protection agencies, consumer reporters, and state attorneys general.
- Make sure you get a written contract and understand the terms of the contract before paying any money.
- Be aware that some resale companies require up-front fees which are not refundable. Some of these fees may legitimately be for advertising your timeshare—ranging from as little as $25 to hundreds of dollars.
- Be wary of companies offering gimmicks, such as money-back guarantees, or threats or scare tactics in order to get money from you.
- Ask questions regarding the company’s background, history of resale or rental success, and who at the company, if anyone, will handle the closing and at what cost.