You Bought A Timeshare, But Now You Want to Sell It: Evaluating Your Options
By: Ryan Muscatella
Timeshares often give individuals and families the opportunity to lock in an affordable yearly vacation at various luxury resorts around the world. Creating memories and enjoying excellent amenities while also benefiting from the flexibility of the timeshare plan is what keeps these vacation contracts appealing over time. While there can be many benefits to owning a timeshare, there can be downsides as well, especially if you eventually plan on selling it.
For the most part, the timeshare market has more sellers than buyers. As a result, customers are more likely to face financial difficulties when trying to sell their timeshare. Aside from trying to sell in an oversaturated market, there are two other important financial factors to keep in mind when trying to dispose of your timeshare:
- Loans must be paid off: If you borrowed money from the timeshare developer, that loan must be paid off before you can sell or give away your timeshare.
- Loss of value: Most, if not all, timeshare re-sales result in a loss of value. Therefore, people looking to sell their timeshares should not expect to make a profit. For example, Disney, Marriott, Wyndham, and Hilton, sell for ~15% of their original price, at best.
It’s important to set realistic expectations about selling your timeshare because the selling process may not be as lucrative, or as straightforward, as one might hope. Aside from the recission period – a legal right to cancel the contract within three to fifteen days (time limit varies by state) after the purchase – there’s no easy way to get rid of a timeshare.
Since many timeshare companies back their customers into a corner when they try to sell, some owners believe the best and only way to get rid of the timeshare is to default on the policy. However, there are a couple of major consequences associated with defaulting on a timeshare including:
- Lower Credit Score: A timeshare foreclosure may lead to a drop in your credit score of at least 100 points.
- Difficulty obtaining Future Credit: As a direct result of a lower credit score, receiving future loans, such as a new home mortgage or car loan, may be accepted with higher interest rates or denied completely.
A foreclosure on a timeshare can negatively impact your financial situation and should be seen as a last resort. Therefore, you should consider disposing of the timeshare properly with the right resources. While selling a timeshare may not be a walk in the park, there are some legitimate ways to dispose of your timeshare post-rescission period. Some options to consider include:
- Ask the Resort: Some resorts may be willing to help their timeshare owners by offering to buy back the contract. Be cautious of resorts that may list a resell opportunity, but not follow through or do it altogether. Whatever the case is, it can never hurt to ask.
- Use a Timeshare Website:BuyATimeshare.com, Timeshare Adventures, Sell My Timeshare Now, RedWeek, and the Timeshare Users Group are more informative sites that provide resources and tools to help customers price and sell their plan.
- Use a Timeshare Broker or Attorney: Using a Timeshare broker from organizations such as the Licensed Timeshare Resale Brokers Association will provide the seller with a dedicated professional to help them sell their timeshare with no upfront fees. Also, consider talking to a lawyer that specializes in timeshare contracts to review your specific situation and advise you on your legal options to manage your timeshare.
- Give your Timeshare Away: Many individuals and families can still benefit from the various aspects of timeshares. If you no longer want to pay for the timeshare or have a need for it, one option is to transfer the timeshare to a new owner. Generally, the original owner will need to pay the upfront transfer fees and complete paperwork to change the ownership of the policy. It is important to go through the specifics with the new owner, so they are not caught off guard by any unexpected financial aspects once the ownership is transferred.
- Donating the timeshare to a charity: To donate the timeshare, you’ll need to bring the assessments up to date, such as paying off any debt owed, before donating it. You may still be liable to pay a transfer fee, but once you donate the timeshare, you won’t be responsible for future assessments, and you will be able to avoid foreclosure.
- Local Ads: Get creative and consider advertising your timeshare with your local newspaper or spread the word through your neighborhood forums.
- Rent out the property: You can even try renting out your timeshare if the timeshare company allows it.
Ultimately, by treating a timeshare like a real property sale, such as a residential home, more people have found success when hiring a licensed broker to help make the sale. By engaging in a timeshare broker relationship, a customer will be able to work alongside a knowledgeable professional with education and experience in this field.
No matter what option you choose, selling a timeshare can be stressful and time-consuming but with the right help and guidance, the process can be much more efficient and achievable in the end.