The term "timeshare" is used to describe a type of property in which an owner buys the right to use it for a designated period of time. Timeshares are most often condominium units, and there are usually several different "owners."
“Buying timeshares peaked in the 1970s and ‘80s, when many people bought them as a result of mass marketing and in some cases high-pressure sales tactics,” Attorney General Dustin McDaniel said. “Because they are a type of real estate, some consumers bought them as investments, assuming the value of the property would increase with time and that the popularity of the property's location wouldn’t diminish.”
Reselling timeshares at a profit or even at a break-even point can be difficult, especially these days, so sellers might want to jump at an offer to help sell their property. If these offers sound too good to be true, however, they probably are. For that reason, McDaniel issued this consumer alert to warn timeshare owners about property resellers and reselling scams.
When many consumers originally bought their timeshares, they failed to realize that the marketing costs of the vacation units were significant and, unfortunately, included in the original price. This is one factor that makes it difficult for a timeshare to retain its value. Also, in many areas, timeshare projects were overdeveloped, resulting in a glut of properties which depressed values, also making resale difficult.
Now, facing increasing assessment and maintenance fees, many timeshare owners need to sell. Unfortunately, a number of operations exist that try to take advantage of these owners’ desperation. They offer assistance with selling the timeshare and relief from the burden of the continuing costs of ownership. But, in some cases, these promises are false.
To avoid these schemes, owners of timeshare properties should heed the following tips about reselling and resellers:
- Beware of timeshare resellers who contact you unsolicited with a promise to help you resell your timeshare.
- If they say they have willing buyers, it may be a lie.
- Never pay a substantial advance fee for resale assistance. A reputable reseller will charge a commission paid only upon sale, just like a normal real estate transaction. An advance fee may be called a "marketing fee," a "listing fee," an "Internet advertising fee," or something else. No matter what it is called, don't pay it in advance.
- Get an independent appraisal from a licensed appraiser before agreeing to any resale assistance contract.
- Deal only with local licensed agents.