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Timeshare Sales

NOT ALWAYS A DREAM VACATION

Who could resist the promise of a sure way to have a yearly vacation?  While buying a vacation home may not be an option for you, perhaps you’re looking at timeshare properties as an alternative.  Before you go to a sales presentation for a timeshare or seriously consider purchasing one, please do some research and get all the facts.

What Is a Timeshare?

A timeshare is typically a condominium property that is split up and sold as separate estates, whose use is shared among a number of owners. 

A deeded timeshare allows you to use a particular unit at a specific time every year.  You are also allowed to rent, sell or exchange your allotted time.  This type of timeshare is your own property and can be passed on to your heirs.  Once you have purchased the timeshare, you are responsible for the annual maintenance fee and taxes.

A right-to-use timeshare is a leased property.  You are purchasing the right to use the property for a set number of years, determined by your contract.  Unlike the deeded timeshare, you might not stay in the same unit every year.  Instead, you are purchasing intervals (weeks or points) to be used as specified by the developer.  The types of intervals are:

• Fixed: You purchase the right to use during a specific week of the year.
• Floating/Flex (based on a rotation of all the owners): You can request a certain week within your specified range during the year.  This is typically on a first-come first-serve basis and requires advance planning.
• Biennial: You purchase the right to use for a fixed week every other year.
• Fractional: You purchase a large block of use, instead of one interval per year.
• Point-based: You purchase points at a specific resort that may also be used at other locations.  Each vacation would vary in point value, depending on the location, the length of your stay, and the season.

The Costs of Ownership

You will incur costs for the initial purchase of the property and for annual maintenance fees.  The annual fees are determined by the owner of the resort property and can vary according to location, size and amenities.  The fees go toward the upkeep of the property (onsite management, unit maintenance, utilities, real estate taxes) and any improvements or upgrades that may be needed, such as replacement appliances.  Maintenance fees can increase at any time and must be paid whether or not you use the property.  There could also be additional fee assessments for unexpected repair costs at the resort, such as hurricane damage if you are in a vulnerable location such as Florida.

Use Sound Judgment

You may be offered a great prize just to go and hear the sales presentation.  Find out whether the prize is what it’s claimed to be (is that “free boat” just a toy?) and whether you are asked to pay a fee to receive it.   Never sign a contract under pressure.  Always get everything in writing to look over at home first.

Florida Timeshares

Georgia residents often look southward to Florida with their vacation fantasies.  If this describes you, you should be aware that the Florida Vacation and Timesharing Act sets out specific requirements for inclusion in any timeshare purchase contract, including resale purchase agreements.  These include a ten-day cancellation period and certain financial disclosures that must be made by the seller.  If the timeshare is in Florida or the seller is a Florida company, you may contact the Department of Business and Professional Regulation Division of Florida Land Sales, Condominiums, and Mobile Homes, Bureau of Timeshares at 850-488-1122 for additional information.

Selling Your Timeshare

Trying to sell your timeshare later may be difficult and will most likely result in financial loss.  You may receive only half (or less) of your original purchase price when you decide to sell.  There are many more people trying to resell than to buy, yet developers routinely hold sales presentations to sell new timeshares to consumers who are unaware of the lower-priced resale market.

The best place to start when seeking a buyer is with the resort from whom you bought your timeshare.  Many resort properties include a clause in their contract called the “Right to First Refusal,” which states that they will buy back your week.  Although this is likely to be for less than you paid, it is generally more than you would receive if you sold it yourself.

If there is no Right to First Refusal clause, you can attempt to sell your timeshare yourself.  Online outlets include RedWeek.com, Tug2.net, eBay and others, where you will have to pay a small listing fee.  To set a fair asking price, check the resale market to gauge prices for timeshares similar to your own.

If you are unable to sell your timeshare, as a last resort you might try donating it to charity.  Donate For A Cause will sell your unit, with the proceeds going to charities.  By donating your timeshare to charity, not only do you dispose of the property, but you also might be eligible for a tax deduction.

Be cautious if a company should approach you with an offer to sell the timeshare on your behalf, and never pay an advance fee.  People have been scammed by outfits who claimed they could make a sale and who charged them a fee for an appraisal or for “marketing purposes.”  Check the reputation of the business with the Better Business Bureau where the company is located, and ask whether there are any complaints against them.   The most reputable real estate brokers charge a commission only after the sale.

Points to Ponder

• A timeshare is only beneficial if you use it.
• Compare your annual vacation costs to the costs of a timeshare to see whether it would save any money.
• Rewards and prizes for purchasing are of little value in comparison to the cost of the timeshare.
• Don’t feel pressured to buy or sign anything on the spot.
• You have to pay the annual maintenance fees even if you don’t use your timeshare, and these can go up.
• Timeshares are not financial investments; you will probably end up losing money if you sell it.
• Beware of any company that proposes to sell your timeshare for an upfront fee (other than a modest listing charge).
• And, as always—when the sales pitch sounds too good to be true, it probably is.  Read the fine print!

Fast Facts

• 22.7% of U.S. timeshares are in Florida.
• 3.9 million households in the U.S. own timeshares.
• The average price of a timeshare for one week (or the equivalent in points) is $15,789.