Timeshare Resale Fraud - Do's and Don'ts
- Don't pay any up front fee
- Don’t expect to receive the same amount that you originally paid for your timeshare. Many factors influence the resale price including season, location, unit size and age. In particular, if you have owned your timeshare interest for less than five years or if it is not in a well-known resort location, the resale price will reflect this. Remember, a timeshare should be considered a vacation-use product, rather than a traditional real estate investment, although it may include a small interest in real estate.
- Don’t give up the right to use the timeshare accommodations for any purpose while you are selling your timeshare unless you have decided to rent your week/interval —for which you should receive the rental amount less any commissions.
- Check with your resort developer (if they are still selling), resort management company or homeowner’s association to see if they either offer a resale program or are affiliated with a broker to handle resales. If so, ask for the statistics on past resales.
- Check with other owners at your resort. Those who own the weeks before or after you may wish to purchase more time.
- Check with local licensed real estate brokers who handle resales (check the real estate or classified section) if you have purchased in a resort area. If you find one, expect commissions to be in the 10 to 30 percent range. You may also find a broker in your hometown, but he or she may not be that familiar with timeshares.
- Run ads in the real estate or travel sections of newspapers in the resort area or your hometown.
- Research advertising costs in national publications that have an emphasis on travel and leisure. Online advertising rates may be more cost effective, but check and compare prices. Check at your library to see which have a classified section for travel/real estate opportunities.
- Understand the specific services of the resale company that you hire before signing a contract or paying a fee. For instance, if a resale company is only helping you advertise your timeshare, then their services typically will not include assisting you with writing a sales/rental contract, negotiating with a buyer/renter or assisting with the closing. However, the resale advertiser might have a licensed affiliate who can help you (probably for an additional charge).
- Notify both your resort and your exchange company in writing that you are selling your timeshare with full details about the new owner.
- Deal only with licensed real estate brokers if you are doing more than just advertising.
- Understand that timeshare resellers holding real estate licenses are usually “full-service” companies. This means that they will not only help with advertising your timeshare but also assist buyers, help negotiate prices, write up contracts and assist with the closing. Some licensed companies may charge an up-front fee (if permitted by state law) or they may only—or also—charge a commission (10% to 30%) when a sale occurs, based on the price for the timeshare interest sold.