Consumer Advocacy
Realities of Reselling
Before you buy, consider that selling a timeshare is no walk on the beach
Timesharing is a billion dollar industry, and if you've been invited to a "free weekend" at one of hundreds of resorts it's easy to get swept away in the dulcet beauty of the locale and the sales pitches seemingly offering paradise for pennies. After all, you may think to yourself, timeshare companies wouldn't be nearly as lucrative if what they sold failed to live up to expectations, right?
And yet, this seems to be the case. Stories are run constantly in periodicals detailing the intense dissatisfaction timeshare owners feel over what they've purchased. After buying property (or right-to-use points) at a resort, these consumers have fallen prey to everything: hiked maintenance fees and hidden charges; advertising snafus that offer lush, luxurious hotels but deliver half-constructed dives; and inconvenient week-trading that leaves the owner vactionless. But one of the most dire difficulties in timesharing emerges when the owner becomes exasperated and decides to rid himself of the property. Few individuals have found an easy way out.
First of all, you cannot simply cancel your timeshare and return it to the company you purchased it from. According to a webpage on the Wisconsin Department of Agriculture, Trade and Consumer Protection site, "Some resorts refuse to ‘take back' unwanted memberships. This is because the income generated by annual maintenance fees may be more valuable than the member's title to real estate…" And refusing to pay the associated fees is hardly the answer. The webpage continues: "If the member refuses to pay annual dues, the condominium association may sue and recover back dues, interest, and attorney fees." Not only will the owner find himself embroiled in legal entanglements, but he could be financially crippled by bad credit as well.
Not even death, it seems, provides an escape. Most timeshare owners don't realize that their contract contains a perpetuity clause; they are essentially purchasing the property for the remainder of its existence. Jane Bryant Quinn addressed this in Newsweek: "At some point in your life you will not want this holiday anymore…but you can't store a timeshare in your basement next to the dusty exercise bike. Dying, incidentally, does not help. Your heirs can inherit the timeshare and along with it the ever escalating maintenance fees."
Most owners desperate to unload their timeshare weeks have had to rent or sell the property, and neither option is effortless or profitable. The few resorts that buy back timeshares at all typically do so at 35% or lower of what the owner initially paid. Some companies will also act as "agents" for owners of unwanted property, aiding them through the resale process. This, however, also comes at a cost, and during such transactions resort companies have the first right to refusal – in other words, should the price of the timeshare drop too low they can halt the sale.
All too often timeshare owners will find themselves waiting – and paying maintenance fees – for months before their units sell. Susan Foss purchased her Snowbird Ski and Resort property for $15,000; after three years on the resale market at $6,000 it still hasn't moved. "I haven't had any takers," she said. "I hear that people are selling them for even less: $4,000 and $5,000." Marriott owner Sonja Clarke put her timeshare on the market for $7,800, while the same units sell from the resort company at $10,900. "My daughter put this timeshare on the Internet last January," she says, "and we have yet to receive any inquiries from prospective buyers. If I could find a buyer for this timeshare, yes, I would have to discount it significantly from the original price to sell it."
Other frustrated owners have even found it difficult to auction off their timeshares without reserve on ebay, or donate their timeshare to charity and receive a tax write-off. The latter has become an increasingly popular "last resort" solution, despite a myriad of myths surrounding it: you cannot, for example, automatically deduct the amount you initially paid for the timeshare, and in order to donate the property at all the charity in question must approve it. As would be expected, they rarely take timeshares of little value. And even if your donation is authorized, charities commonly navigate such transactions with third-party legal and business experts – again at the cost of the timeshare owner.
Of course, the situation isn't entirely hopeless – some owners of Disney's Vacation Club have found that the company's buying and selling policies have aided the equilibrium of their property's value. Marylyn Carlyle, a Disney owner and timeshare consultant, says: "[The Disney timeshare is] the only one where the value actually went up ... and I actually made money on it."
Unfortunately, however, cases such as this one are in the extreme minority – facts one certainly must consider before succumbing to the siren call of an idyllic resort.
Quotations from "The Trap in Timeshares" by Jane Bryant Quinn, published in Newsweek July 23, 1993 (Copyright 1993 Newsweek).
Remainder of quotes from "Reselling Can Be Costly" by Lee Davidson, published in The Deseret News November 21, 2006 (Copyright 2006 The Deseret News Publishing Co.).
Other info from www.datcp.state.wi.us
