The Questions You MUST Ask Timeshare Re-sale Companies

We have written this post as a caveat relating to the recent timeshare exit scams emerging everywhere around the world.

In doing so, we hope to make people aware of how unscrupulous agents are promising to represent timeshare owners in negotiations with potential buyers only to collect upfront payments and disappear into thin air.

If you own a timeshare and are thinking of contacting a resale agency or have already been contacted by one, we highlight below the things you should look into to make sure you are not dealing with a scammer and prevent having any financial losses.

First and foremost, if you are wanting to sell your timeshare, it’s advisable to check with your company if they have a buy-back option. This is by far the best and safest way to exit your contract.

However, if this option is inexistent and you need to resort to a different arrangement, such as engaging with a resale agency, then consider the following checklist of questions you should make when contacting them, or vice-versa.

  • How long have they been in the market, and is this something you can check for yourself?
  • What services are they going to provide you, exactly?
  • What are their fees and commission rate?
  • Is the price for sale they’re suggesting in accordance with the market?
  • Do they offer any guarantees?
  • Is there any social proof that testifies to their legitimacy?
  • What’s the origin of their timeshare inventory?
  • What’s their method of sourcing potential buyers?
  • How do they market the timeshares they have for sale?
  • What happens if they don’t succeed in selling your timeshare?

Whilst these are simple questions, the answers provided may be purposefully intricate and confusing.

It’s important to request that everything conveyed during the conversation, especially the answers given to the questions above – and all other important questions asked – be put in writing to make the company accountable for their promises.

A reputable resale agency should see no problem in providing this information detailing every step of the timeshare sale process, including what’s due to them once the deal has been finalized and their refund policy. On the contrary, if they fail to provide this information in written form, be wary in proceeding with them.

The Ultimate Guide For Selling Your Timeshare

Pricing Your Timeshare Correctly

Determining the price of sale of your timeshare in the aftermarket is a little bit tricky.

It all depends on how fast you want to sell and other factors such as the demand for the complex in which you have your timeshare, the holiday area, unit size, season, amenities and facilities in the complex.

A timeshare, if well maintained, does not have to lose its value over the years, as with other fixed assets. So it can be bought in the second-hand market as if it were from the developer, but with prices up to 75% below the original prices – if not more.

And potential buyers may have a preference to get their timeshares straight from the developers because they can see the complex beforehand, financing is usually offered and there is little risk of fraud.

The risks of buying a timeshare in the second-hand are well known.

The information provided by the seller may be false, the seller is not the legal owner, there are debts, the complex is in poor condition or suspended from the exchange companies.

In addition, potential buyers may not be able to see the complex prior to committing to a contract, increasing the chances of buying a timeshare that is much below the quality standards they are looking for. Which works against someone trying to sell their timeshare in the aftermarket.

So if you want to price your timeshare correctly, with better chances of getting the most out of the negotiation, the first thing to do is to research the market price of your property, comparing prices and the time of the year it is for sale.

Pricing Your Timeshare (Simulation)

A low price would be $2000 (you want to sell urgently);

A normal price would be $3500 (not in a hurry to sell);

A high price would be $5000 (wants to make a profit);

Now add $1000 For each bedroom; add another $1000 if it’s a highly requested complex (5 stars); finally, add $1000 per red week or if it’s a region with high demand.

Pricing Your Timeshare (Alternate)

If you want to get out of your timeshare without having a substantial loss, subtract 25% from the original price;

If not in a hurry to sell, subtract 25-50%;

If eager to sell, subtract 50-75%.

Developer prices range from $6000 – $15000 per week.

Resale companies

Lately, many companies have appeared that are supposedly engaged in the resale of timeshare. As you may be well aware by this stage, not all of them are serious and we recommend that you inform yourself well about the resale companies you might be considering to get assistance from.

Here are a few points to consider:

Where does their inventory of timeshares come from;

How do they find potential buyers;

What marketing strategy do they have? Mailing, phone calls, letters, programs with promotional stays, salesrooms, press advertisement;

Do they have satisfactory transaction references you can see and check for yourself;

What fees, deposits, and commissions do they get from you;

If they ask for money upfront, it should be a very small sum;

Commissions are usually 10-50%;

The price they suggest for sale;

The guarantees for sale they offer you;

If your timeshare is not sold, will they refund your initial deposit;

If you must pay fees, are they one-off fees or recurrent;

What other services will they give you, and are these services worth the money they ask for;

What experience do they have;

Will they rent out your weeks until they make a sale;

Finally, beware of companies that contact you unsolicited and promise fantastic prices that a supposed buyer is willing to pay.

Rentals

If for some reason you cannot go on vacation or need money, rent out your weeks.

To determine the price for the rental, find out about the prices of similar accommodation in the area in which you have your timeshare.

The price you ask for your timeshare should be below these prices, so it’s an interesting offer for prospects, but at the same time, it should cover the maintenance fee.

It is possible that a potential buyer of your timeshare would like to see the complex beforehand and rent it. Conversely, a rental might end up in a sale if the renter is pleased with the experience.

Timeshare owner having a coffee

Timeshare owners and exit companies

A lot of owners continue enjoying their timeshare, that’s why the industry continues to grow. A lot of timeshare sales are not from new buyers; they actually come from existing timeshare owners. This indicates that there are a lot of satisfied timeshare users.

There comes a time though when owners can no longer hold on to their timeshare and have no choice but to give up the lifestyle. Financial circumstances may change, and they can no longer afford to keep their timeshare. Sometimes, children move out of the family home making family vacations few and far between. Declining health may also be a reason to let go of the timeshare. Whatever the reason may be, there are ways to exit timeshare properly.

Timeshare owners usually sell in the secondary market. Selling at a reduced cost is a bitter pill they must swallow because timeshare is an investment that depreciates. Donating the timeshare is also another option. Holding on to it unnecessarily is expensive because even if it’s unused, the maintenance fees and other fees must be paid annually.

There are owners who resort to getting the services of an exit company or relief company to take out from them the headache of selling their timeshare. Before hiring one, here are some pointers worth considering. These are from the study issued by the BBB (Better Business Bureau) of Eastern and Southwest Missouri and Southern Illinois.

In the June 2019 study, it was discovered that more than 400 timeshare owners believe they were scammed by third-party exit companies. The general complaint is they were asked to pony up large upfront fees for services that were not delivered. The upfront fees ranged from $1,000 to more than $30,000.

The timeshare industry has over nine million owners. It generates over 540,000 jobs and $10.8 billion in taxes in the US. As such, it has become a target for unscrupulous companies. Because of this, timeshare companies want to educate the owners on how to exit timeshare safely.

Here are the red flags to watch out for:

  1. Scammers usually call you up or send emails claiming that they have an “interested buyer”.
  2. They claim that they are from the Australian Timeshare and Holiday Ownership Council (ATHOC). Note that ATHOC does not initiate calls, emails or any other type of communication. They only talk to timeshare owners when the latter initiates contact.
  3. They ask for an upfront fee with a promise to modify, cancel or transfer the timeshare’s ownership.
  4. They claim that a sale or transfer is about to be completed provided you wire some money for “tax” or other “requirement” to finalize said sale or transfer.
  5. If their promise sounds too good to be true, chances are it is.

If you have been victimised by these unsavoury companies, you may get help from your state’s Office of Fair Trading or Department of Consumer Affairs.

Stop sign

When a timeshare is not for you

If you are the type who goes on regular vacations who cannot be bothered looking for resorts or hotels, timeshare ownership will do you good. We all know that looking for a vacation destination can be stressful unless you have a travel agent who will do the work for you. You have to review several brochures, compare prices, check the availability and read reviews before you can pick one. If you’re unlucky, you’ll end up with a lousy resort despite the work you have put in.

A timeshare ownership saves you from the stress. You are assured of a top-notch location and your booking is safe. All you have to do is pack your back, leave and enjoy. This is pretty much how the timeshare companies sell you an ownership. If you can afford the prize, who wouldn’t want a stress-free vacation that you can have regularly? Another upside to timeshare ownership is it costs much less than owning a vacation home. You don’t have to worry paying for and attending to the property’s upkeep.

Before you take the plunge and sign the dotted line, here are some considerations to owning a timeshare. Read through them because timeshare may not be for you.

Considerations to Owning a Timeshare

  1. You may get stuck to one company – Some timeshares may keep you to a single resort year after year. This can be tiresome unless the resort keeps on upgrading their facilities or adding attractions. Going to a specific resort every year may be appealing to some though. It saves them from unfavourable surprises when they already know what’s waiting for them.
  2. You may end up not using it – There are some owners who bought their timeshare because they wanted it. They are not regular vacation goers yet. Owning a timeshare might finally push them to take regular breaks. Or, they feel it would be nice to have one should they take a vacation. The reality is, they don’t need a timeshare because going on a holiday is something they don’t consider to be a need.
  3. Timeshares cost a lot – The upfront cost of a timeshare is a considerable amount. On top of it, there are annual fees to be considered.
  4. The value of a timeshare does not go up – You would think that like other real estate investments, the value of a timeshare appreciates. Sadly, they do not. The value of the property may go up, but it doesn’t affect the timeshare owner. They did not buy the property, but the time to use it.
  5. Timeshares are not income generating – Real estate investments allow you to earn income. If you rent out your home, your tenants pay you rent. This does not apply with timeshare.

If owning a timeshare does not benefit you, you do not need to suffer and hold on to it. Keeping it despite non-use is going to cost you more money in the long run because of the annual fees it requires. Do yourself a favour and exit timeshare now. There are ways you can give up your timeshare properly.

Happy mum and her two children

What are the advantages of owning a timeshare?

A timeshare is a property, usually condominium apartments, owned by several people who schedule their use throughout the year. These properties are usually found in desirable tourist destinations. There are cases when timeshare owners “swap” timeshares, so they go to other locations.

It is common to hear complaints about owning a timeshare, but it is advantageous if you are the right market for it. If you are the type who values regular vacations and do not mind going to the same destination, you will surely find owning a timeshare advantageous.

  1. Timeshare provides a much better accommodation than hotels do. Timeshares can be spacious units that have fully-equipped kitchens, dining room, living room and several bedrooms. Some can provide hot tubs, fireplace and entertainment centres. It really feels like being “home” when you’re on vacation. You can even have home-cooked meals every time and this is great if you’re on a certain diet. It’s budget-friendly, too.
  2. There are timeshares that provide amenities like the use of swimming pools, fitness centres, tennis courts and health and beauty services. Some even have tie-ups with offsite recreation or outdoor adventures. Choose a timeshare that is close to the attractions you want to enjoy, and you’ll surely have a fun holiday.
  3. Owning a timeshare can help you save money. You can book future vacation accommodations at today’s cost. You can also share it with families and friends. If you want to generate income, you can rent out your timeshare space. Timeshare owners can choose when and where to travel, the length of their stay and the type of accommodation they want. They belong to a group that can swap their units, thereby explore other destinations.

Admittedly, there are downsides to owning a timeshare. Maintenance fees go up annually whether or not you use the property. They are also very hard to sell. If you’re lucky enough to sell yours, you will most likely take a loss. In the end, losing money in sales can be good because you no longer have to pay the annual fees. There are also rare occasions when the property is poorly managed.  

There might also come a time when you can no longer use your timeshare. Changes in personal circumstances happen. Children grow up and their interests change. They go to college and move out of the family home. Family holiday may no longer be a priority. Declining health can also be a reason why a timeshare owner no longer goes on vacation.

At the end of the day, you have to weigh the pros and cons of keeping your timeshare. If you can still make use of it, it would be wise to keep it. Remember that you can pass it on to future generations. If, on the other hand, keeping the timeshare is no longer practical, you can exit timeshare now or whenever you want. There are proper ways to do it and you can even hire an exit company to help you.

Person signing on paper

How to cancel your timeshare contract

If you have signed a timeshare contract and find yourself changing your mind, you can cancel the said contract if you act immediately. You can exit timeshare, but time is important in the rescission of a contract, so make sure to follow the correct procedure.

When buying a timeshare, what you’re getting is an interest in a piece of real estate, usually a resort condominium. Sellers are known for their hard-sell method. They approach people in public and offer them some freebie, provided they attend a short presentation. The presentation is not short and usually attendees leave the presentation as timeshare owners. They sign the contract without reading the fine print. A lot of them do not know that aside from the purchase price, they have to pay annual fees, taxes and other assessments. After giving it considerable thought, a lot of these buyers change their mind. If they act quickly, they can still exit timeshare.

How to Cancel Your Contract

  1. Cancel within the cancellation period – The contract should have a rescission period. This is the time the buyer can change his mind and rescind the contract. If the contract doesn’t have a rescission period, contact the consumer protection office.   
     
  2. Cancel in writing – Cancel the contract in writing even if you are told that doing so is not required. It is for your protection that everything is in black and white. Make sure the following is clear in your cancellation letter:
    • Your name should be how it appears in the contract.
    • Indicate your complete address, telephone number and email address.
    • Indicate the name of the timeshare company.
    • Write a description of the timeshare. Make sure it is the same with how it was described in the contract.
    • Indicate the date you bought the timeshare.
    • A clear statement that you are rescinding the contract. Example: I am putting in writing my intention to cancel this timeshare contract. This letter is signed and submitted within the rescission period indicated in the said contract
  3. Delivery of the cancellation letter – The contract should have a clear procedure on how to deliver the cancellation letter. They may require that you hand-deliver the letter or have it sent by registered mail. Be sure to follow the instruction clearly and deliver the letter within the rescission period or your cancellation may be invalid.

Post Rescission Period

There may be instances when you might be able to cancel your timeshare contract when the rescission period has lapsed. However, this usually entails a lawsuit against the timeshare company. You will need a real estate attorney for advice and assistance.

Scale

The pros and cons of owning a timeshare

There are people who found themselves suddenly owning a timeshare without knowing what it’s about.

They hear keywords in presentation like “stress-free vacation” in top-notch destinations and immediately get sold to the idea. Considering that a timeshare is expensive, one must weigh the pros and cons of owning one. The seller might be remiss in explaining the product thoroughly, so it would be helpful to the soon-to-be timeshare owner to do his own research.

Pros

  1. It would be nice to own a condominium unit in a high-end vacation spot, but not everybody can afford to buy one. There are timeshares that can allow you to live in the same condominium unit during the time-frame you reserved. You enjoy the same perks even if you don’t own the unit. And, because you don’t own it, you don’t have to worry about the maintenance. You also don’t have to worry about the security when you’re not in the property.
  2. Large families need not feel cramped when they go on vacation. There are spacious two- or three-bedroom condominiums that have multiple bathrooms, living room, dining area and kitchen. Families can enjoy meals together as a whole, without having to reserve several tables when they go out for every meal. Plus, if you’re the type who enjoys cooking for your family, you can continue lording it over the kitchen even during holidays.
  3. Timeshare can be an investment when you sublet your unit to others. You can sell your week of vacation and make a profit if the sublet fee is higher than the monthly fees you pay.
  4. If you enjoy going to the same place every year (pretty much like going to your summer home every year), a timeshare can ensure that you stay at a particular resort during the time-frame you reserve. This saves you from the hassle of looking for a holiday destination.

Cons

  1. There are many costs involved in owning a timeshare. Maintenance fees can go up every year. There are claims that the maintenance fee can go up by 12% annually. There are special assessments and taxes involved, too. Sometimes, there is a mortgage to be considered.
  2. A lot of timeshares carry a lifetime contract that can be hard to get out from. This lifetime contract can be passed on to future generations through the perpetuity clause.
  3. Pretty much like a car, the value of a timeshare goes down as soon as you buy it. The difference is, it’s easier to sell a used car than a timeshare. This is because the supply of timeshare is much greater than the demand for it.

During a timeshare presentation, it can be expected that they highlight the pros of owning a timeshare. Some don’t even bother discussing the cons.

If you already own one and realise that keeping it no longer makes you happy, there are legitimate ways you can leave timeshare. You can either do it on your own or get the services of an exit company.

Disappointed timeshare customer screaming on the phone

Be Aware: Timeshare Exit Scams

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

  1. 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.
  2. 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

  1. 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.
  2. 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

  1. 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.
  2. 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.
  3. 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.
  4. 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.
1 Lady having breakfast and enjoying a beautiful view

How to exchange your timeshare

Every once in a while, sometimes abruptly, even, we feel like a bit of change could do us some good. It is in our nature to seek new perspectives and tread different ways for the sake of discovery. Not knowing where you´ll end up is thrilling (most times, anyway). That´s where all the fun comes from: the possibilities and the surprises along the way.

When it comes to exchanging your timeshare, it is partially the same!

A new destination can bring a reinvigorating breeze to your holidays, sprinkling it with the excitement of novelty. You leave your beachfront resort for a cabin in the mountains; replace your thongs for boots, and your speedos for baggy pants. And just like that, the possibilities have been completely revamped.

But let´s stop here and regroup. Before this can happen, planning is required, and understanding the ways in which you can exchange your timeshare will determine whether your holidays will turn out to be as exciting and refreshing as they can.

Verify the possibilities

The first step to using your timeshare towards a new holiday destination is to verify the week and resort in which you own it – considering that the exchange value will vary from week to week, and from resort to resort. As with most holiday destinations, the better resorts at peak travel season will have a higher exchange value. Creativity and flexibility at this stage will help expand the range of options.

Next, check if your home resort is a part of an internal exchange program. These programs are usually the most economical ways of exchanging your timeshare and will give you options that are consistent with the quality you are used to having in your timeshare resort.

Pick an exchange company

If more options are what you are looking for, then have a look at RCI, one of the largest timeshare vacation exchange networks in the world. There will be an added cost associated to using their services, as membership is required to access their booking system. It might be a worthwhile investment, however, as their affiliated resorts span across 110 countries.

There are other exchange operators to choose from as well, such as Dial An Exchange (DAE), which will not charge you a membership fee. Their cost derives from the exchange operation itself, meaning you only pay their due when your exchange has been confirmed. And it is not a problem if you are already member of a different exchange company, for you can still use DAE´s services.

Make a choice

Now we are getting to the exciting part of the journey, where the thrill of novelty kicks right back in!

Once the possibilities of what you can do with your timeshare have been verified, and you have either opted for an internal exchange program or an external exchange operator, you can really start to ponder whether to pack your speedos or baggy pants.

In this case, it is better to start by choosing the destination and then going through the list of resorts you can afford, based on the exchange value of the week you own. At this stage, if you opted to use the services of an exchange operator, you will “bank” your week, meaning you are providing the operator the use of your week in exchange for using the week you requested from them. But start early, like twelve months in advance; at least, to ensure you get to choose what you want to choose. Especially if you are going for the popular destinations, which people love to exchange into. Because if you have pictured yourself in speedos, you are definitely not going to want to wear pants!