Some timeshare buyers experience buyer’s remorse and immediately want to rescind their contract. Others struggle with the financial responsibility and want to give up. Even satisfied timeshare owners sometimes want to exit timeshare for personal reasons like no longer being able to travel.
Cancelling a timeshare purchase is easy if done during the rescission period – the time the buyer is legally allowed to change his mind. When the rescission period has lapsed, there is no easy way to exit timeshare as the industry has yet to provide a dignified exit for timeshare owners. Crooks see this as an opening to take advantage of timeshare owners.
Scams in Timeshare Exit
- Scammers promise to sell an owner’s timeshare at a high price in exchange for an upfront fee. They will quote a price that will entice the owner to agree. Who wouldn’t, when they are promised that they can recover their initial investment plus the fees they have paid? Do not believe this. The value of timeshare depreciates the moment they are sold. Timeshares are sold in the secondary market at a bargain, mainly because the supply is greater than the demand. If you are lucky to find a buyer, do not expect to recover your investment.
- Scammers promise to find6 a charity that will accept the timeshare. This, again, is not true. Only a few charities, if at all, are willing to take timeshares. While they don’t have to pay for it because it’s donated, they will have to pay maintenance fee and other fees annually. These fees go up on a regular basis and can be expensive depending on the timeshare’s location.
Realities in Exiting Timeshare
- The number or people who want to sell timeshares is far greater than those who want to buy them. You will be frustrated if you hope to get your money back. In higher-end properties, like those owned by Marriot, Disney or Hilton, the highest a seller can ask for is 15% of the original price. In older and less popular properties, sellers sometimes offer to continue paying the annual fees for a year or two just to entice someone to buy their timeshare. Maintenance fee is around $900 per year in regular resorts; in high-end ones, it can go over $3,000 per year.
- Timeshare developers offer a loan to would-be owners if the latter does not have the cash. If this is the case, the loan must be paid-off first before they can sell or give away their timeshare.
Options in Exiting Timeshare
- Ask the resort to take it back – There are big timeshare developers that have formal exit programs that are discretionary – they decide which timeshares they can take back. Most developers do not take back timeshares, but you can always ask. Who knows? They might have changed the rules. In cases where they accept returns, you might be asked to continue paying for annual fees for a year or two while they’re looking for a buyer.
- Sell – If you got your timeshare from one of the high-end resorts, you may look for an in-house broker who can help you sell your timeshare. They don’t charge upfront fees but will take a commission from the sale.
- Rent it out – Some owners discover they can rent their timeshares to at least help offset annual fees. The sites that list timeshares for sale also have timeshares for rent.
- File a bankruptcy – People who stop paying loans are subject to foreclosure. If you can no longer pay your timeshare, your credit score will drastically go down once the developer turns over your account to collection agencies. You may file for bankruptcy and this can stop the collection activity and eventually erase your timeshare debt. Older people may not care if their credit scores go down, but for others, filing a bankruptcy is not a good option.