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|April 9, 2005, 12:35 PM||#1|
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How to Sell Your Timeshare (and avoid getting scammed!)
How to Sell Your Timeshare (Updated 03/26/08 by Dave M)
We at TUG get many questions relating to the various steps in an effort to sell a timeshare week. Here is one formula for selling your week. It is a compilation of recommendations of those here at TUG who have been through the process many times. It expands on some of the info in the TUG Advice section. That section (link at the top of this page) should also be reviewed for assistance in how to sell your week.
Paying Up-front Fees
Most important rule: Never pay an up-front fee in an effort to sell your week! Whether the fee is called an appraisal fee, a market analysis fee, a marketing fee, an advertising fee or some other type of fee, the result, historically, has been the same for all who have reported here about their experiences.
There have been only two reports at TUG of successful sale transactions as a result of paying such an up-front fee. Neither has been verified. There have been hundreds of reports and complaints at TUG from those who have paid such fees without success.
Yes, I know you want to believe that the company “has a buyer (or several buyers) waiting to make a deposit on your week. All [the company] needs is a $495 deposit from you. It’s refundable.” Or the company has a money-back guarantee.
I know how desperately you want to believe that sales pitch. Don’t believe it! There is no purchaser waiting in the wings. Once the company has your money, they have no significant incentive to work for you. And despite guarantees and other promises, you won't get your money back when you complain!
There are narrow exceptions to this advice against paying up-front fees - for selected nominal fees ($15-$30), such as to place an ad in a specific publication or at TUG.
What Is Your Timeshare Worth?
Advertise your week at a realistic price. With few exceptions, owners of timeshares purchased from a developer can expect to take a beating on resale. Although it’s not what you want to hear, most timeshares sell on the resale market for only 30% to 50% of the price you likely initially paid to the developer when you purchased. Shocked? Please believe it!
The key is to bury forever any thoughts that because you paid (let's say) $12,000 for your week, someone else will be willing to pay the same amount. They might, if you were putting on the same glitzy sales presentation that some high-pressure salesperson did when you bought, including giving free incentives for attending the presentation. But you don't have that luxury. So do your homework and set the price at the right level. It will sell.
To help establish an asking price for your timeshare, try to find out what other weeks like yours are selling for. Ask your resort about recent sale prices, check the TUG sales database (to which you have access if you are a TUG member), look at current and completed eBay auctions, check real estate records in the county where the resort is, etc.
For more help in establishing value, look at all of the places listed below for advertising your week. To find other current listings, do a Google.com search using the name of your resort (in quotes, if more than one word) and the word timeshare as search terms.
When you have done all of that work, you might be even more confused as to what asking price you should set. As an example, you might find 15 listings for your timeshare on Redweek (see next section) at asking prices ranging from $2,000 to $12,000. First, keep in mind that most timeshare owners have no concept of what resale values are. They may incorrectly think of their timeshare as a traditional piece of real estate that should appreciate in value. Thus, they way overprice their timeshare, looking to recoup - at a minimum - most or all of what they paid for it. Second, make sure you compare the details of your week (week or season of the year, # of bedrooms, view, etc.) with the other for-sale listings for your resort to determine which listings are reasonably comparable to yours. Lastly, keep in mind that if there are multiple listings for the same or similar timeshares, buyers will seek to buy only the one listed at the lowest price. Thus, you should almost always list your week at or below the low end of the range of asking prices you see. Otherwise, you will own your timeshare for a long time!
Where Do You Advertise?
Ask your resort for ideas of how others sell their week. Advertise on a bulletin board or in a newsletter at your home resort, at the various on-line free timeshare resale services (see listing below) and at timeshare related locations where you can advertise for a nominal cost (e.g., here at http://ads.tug2.net and in the on-line and print editions of Timesharing Today).
Advertise at some of the online free (or free except for a $10-$35 registration or listing charge) resale sites that get considerable action. Examples include Redweek.com, MyResortNetwork.com and Transaction Realty. For other resale sites frequently mentioned favorably here at TUG, see this listing.
Also consider trying to sell your week on e-Bay, setting a reserve as low as you are willing to sell for or, perhaps even better, no reserve at all. There are conflicting reports here at TUG as to whether setting a reserve inhibits prospective bidders from submitting a bid or whether it helps by setting a minimum price.
To get started, review other eBay timeshare ads for deciding on a format for your ad. Then go to eBay's Timeshare Seller's Guide. At e-Bay, even if your week doesn’t sell, the bids you get will give you another strong indication of the true value of your week.
Another auction site to consider, although it seems to have considerably less activity and often lower selling prices than eBay, is www.bidshares.com
Consider advertising in newspapers. Place a classified ad in the Sunday “Real Estate – Timeshares” section of major newspapers in locations where concentrations of visitors to your resort live, etc.
How about the local newspaper where the resort is located? Visitors to the area will likely want to come back and may want to buy a piece of the resort area, just as you did. They are prime targets. There may also be some timeshare resale realtors in your resort area (such as there are in Hilton Head) that will try to sell your week for a commission. They typically advertise in the Timeshares classification of the Sunday real estate section of the resort area’s local newspaper.
What if Your Timeshare Loan Exceeds the Likely Selling Price?
Be prepared to pay off the loan or put money into the transaction (paid to the closing company) in order to sell it. Very few potential buyers will be interested in taking over your loan payments.
You might decide you can’t afford to sell at the price your research indicates is reasonable, because you still owe an astronomical amount on your timeshare loan. Consider refinancing your loan to get a lower interest rate and make the payments more palatable for you and, perhaps, partially deductible. The best way to do that may be to refinance your home mortgage for an additional amount or open a home equity loan so that you can pay off that high-interest timeshare loan. By doing that and paying off the timeshare loan, you will have made your timeshare much more marketable.
It's also possible, perhaps likely, that your timeshare loan is a personal consumer loan rather than a mortgage-type loan where the lender takes a security interest in your timeshare. If so, you can probably sell your timeshare just as though you didn't owe any money. But keep in mind that you'll still have to repay that loan eventually!
If the high unpaid balance on your timeshare loan prevents you from selling, consider trying to rent your week each year to minimize your losses until you can get the debt paid down somewhat. Much of what is written in this article (paying no up-front fees, setting a reasonable price, etc.) applies equally to rentals. (See the "How to Rent" article in a separate "Sticky" thread.)
Cold Calls from Resellers
Once you start listing your week for sale, expect calls and e-mail messages from entities promising a quick sale at your asking price (or even higher). All you have to do is pay an up-front fee of $99 to $799. When that happens, go back to the Up-Front Fees section at the beginning of this article!
Gimmicks and Offers to Avoid
Beware! There are a variety of scam artists and expensive solutions waiting for you when you place an on-line ad.
One current scam involves an offer to pay you more than your asking price. You are told to wait until their check (usually a foreign " bank check" or "certified check") clears and then refund the difference, still netting you a very attractive sales price. The problem is that well after their check cleared your bank and you sent them money, their check will bounce and you'll be stuck!
Another gimmick is to invite you to a meeting at a second tier hotel/motel near where you live and offer you several thousand dollars for your timeshare. At the same time they "invite" you to purchase a great (not!) vacation package for (usually) $6,995. The problem is that the real value of the vacation package ("free" cruise, discounted vacation rentals, discounted air fares, etc.) is several hundred bucks at most. All of the package offerings can be found on eBay and other Internet sources for nominal prices. Further, the "free" cruise and other benefits require significant additional payments.
A similar gimmick is the meeting at that same second tier hotel/motel where you're told you can unload that terrible no-value timeshare that you have simply by paying $3,995 (or some similar high amount). You might also be told (incorrectly) that the loss you incur upon sale is deductible on your tax return. Before considering such an expensive and unnecessary transaction, follow the various sale options discussed in this article!
Perhaps the best advice is that if you get an offer or solicitation related to your ad that seems too good to be true or seems unusual, ask about it on the TUG Buying, Selling, Renting forum.
Timely and Accurate Information to Prospective Buyers
Treat prospective buyers the way you would expect to be treated if you were considering a purchase. Respond quickly to e-mail messages or phone calls from prospective buyers. Consider making reasonable counter offers when someone offers less than your asking price.
Make sure that information in your ad and in responses is accurate. If you tell a fib or accidentally provide the wrong info about the annual maintenance fee, the view from your unit, whether it's a fixed or a floating week, whether maintenance fees for this year have been paid, whether this year's use is available and whether the week has been reserved or other important information, you'll likely lose your sale when the prospective buyer checks your info with the resort. No one likes to deal with someone who can’t be trusted. Worse, you might have legal difficulties after a sale, based on your having provided inaccurate information.
Once You Have a Buyer
It’s best to have a contract with your buyer that specifies what the buyer gets in addition to ownership (e.g., use of this year’s week?) and what you get (payment amount and terms) and when. Although you should consider the possibility of engaging an attorney to assist you, the cost to do so might be prohibitive, depending on the price of your transaction.
Timesharing Today has a Resale Document Kit, which you can purchase for about $30, or even less if you choose to download the kit. Instructions, fill-in-the-blank forms, sample letters, loan documents, etc. Easy to follow. A kit from My Resort Network sells for under $10, but might not include legal language required if the timeshare or one of the two parties is in Florida.
If you want to be somewhat secure in the closing process after you have negotiated a written deal, consider using one of the low-cost timeshare closing services such as the ones listed in the Frequently Mentioned Resale and Rental Sites article above, so that neither the money nor the deed is disbursed until both are in the hands of the closing company. Your buyer might insist on using such a service. Fees are typically around $300-$500 depending on what services you utilize.
Whether you or the buyer pay such closing fees is a matter of negotiation between you and the buyer. Using such a service is not a substitute for having a contract with the buyer. Another reason for using a closing company: Keep in mind that you are responsible for the timeshare maintenance fees until the resort is properly notified of the title change, along with payment of the resort's transfer fee, if applicable.
Donate Rather than Sell?
If you believe it would be too much trouble to sell your week, consider donating your week and claiming a tax deduction for it. See this TUG Advice article for information on donating and the "Donating" part of this TUG Advice article for information on the tax aspects of your donation. Also see this link for a good description of the practical aspects of donating and a separate more comprehensive list (link in the first paragraph of the linked page) of charities that accept timeshares. (Warning: Some of the charities listed in both places apparently no longer accept timeshare donations.)
Selling a timeshare week takes effort, patience and diligence (to avoid a scam). But the effort, if you are realistic in your expectations, will pay off.
Last edited by TUGBrian; April 1, 2014 at 12:39 AM.
|October 10, 2013, 03:46 PM||#2|
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