As time passes, families evolve, children grow up and parents age. What seemed like a terrific vacation idea 20 years ago could be a financial burden today. If you own a vacation timeshare — the use of a vacation home for a limited, pre-planned time — be cautious about people offering to help you resell it for a fee. Most of these sales programs are very questionable.
While the real estate sector nationwide is in a slump, the market for timeshare resales is even weaker. One recent survey found that only 3.3 percent of owners reported reselling their timeshares during the last 20 years. Still, desperate to sell, many owners have been taken in by timeshare resale scams.
The Resale Scam
Unscrupulous companies may contact you by phone or mail. Salespeople are likely to tell you the market for resales is "hot" and that their company has a high success rate in reselling units. They may claim to have extensive lists of sales agents and potential buyers.
For an advance "listing" fee, ranging from $500 to $5,000, some salespeople promise to sell your timeshare for a price equal to or greater than your purchase price. To further entice you, they may offer a money-back guarantee (which can be difficult for you to successfully claim, due to variances in the fine print of your contract) or a $1,000 government bond if they can't sell your timeshare within a year.
Others offer to purchase your timeshare for 80-90 percent of its appraised value if they don't sell it within a specified time, but given the soft market and low demand, even that offer may be too good to be true.
Even in stronger economic times, the market for resales may vary considerably, depending on the location and time of year. Meanwhile, the industry of vacation destination packages has evolved a great deal in the last two decades, making the older plans/properties (i.e., one location, one week, without many options) not attractive or competitive to today’s new buyers.
Thus it may be unlikely that the company can sell the timeshare at all, let alone at a price equal to or greater than your original purchase price. In addition, many consumers whose timeshares don't sell after a year may be presented with a government bond worth only $60 or $70 or told there's no refund on their listing fee.
If You Want to Sell
If you want to resell your timeshare and are approached by a company offering to help, consider taking these precautions:
You have several other resale options. You may try selling your timeshare yourself, by placing an ad in a newspaper or magazine, or contacting a real estate agent familiar with the area. If all the timeshares have been sold in your development, consider asking the seller to establish an on-site resales office. As an alternative, you may consider an exchange program. For a fee, these programs allow you to arrange trades with other resort units in different locations.
Source: U.S. Federal Trade Commission, in cooperation with the American Society of Travel Agents.