Last week’s Ask Stacy column was based on the most common reader questions I received in 2013. Just missing that list were questions about getting out of time shares. I won’t bother to count the number of questions I’ve gotten about this over the years, but it’s been a lot.
Here’s the latest:
How do you go about getting rid of a time share to make sure you aren’t robbed and/or to unload it the legal way?
Thank you. This is a great concern to those who have been foolish like me and wasted money. – Pam
Let’s start with a video we produced about time shares last year. Check it out, then read on for more.
Getting in? Easy. Getting out? Not so much
The simple fact is that recovering even a fraction of your money is nearly impossible in many cases. The reasons for this include a very inactive secondary market, high monthly maintenance fees, and a supply that eclipses demand.
But when you boil it down, it’s hard to recoup your money from a time share simply because they’re sold for a lot more than they’re worth. Like new cars, the vast majority of time shares lose a huge part of their value the instant you buy them.
How NOT to sell a time share
The most important thing to know about selling a time share: Never pay a big upfront fee . Last year, the Federal Trade Commission announced 191 actions to “stop fraudulent operations hawking time-share property resale services.” What fraudulent resale services commonly do is say they already have a buyer for your unit. All you have to do is pay an upfront fee ranging from several hundred to several thousand dollars. Don’t bite. Odds are, that buyer doesn’t exist.
According to the Timeshare Users Group, here are some sites where you can sell or buy time shares without a big upfront fee:
- Timeshare Users Group listings (Note: Buyers, check out the Bargain Basement listings with deals as low as $100.)
- Redweek time share listings
- My Resort Network
- EBay time share sales
You should approach a sale with low expectations. Many time shares don’t have much of an active aftermarket, which means there aren’t a lot of buyers. If you borrowed most of the money to buy your time share, you might have to pay off part or all of your loan to get out of it. While you might start your sale by talking to the developer you bought from, don’t be surprised if they tell you they won’t help you.
For additional information, read this story about selling time shares from the Timeshare Users Group. It has a lot of great information, including how to market your time share, what to do if you owe more on your time share than it’s worth, and how to transfer the title when you find a buyer. Another place for information on selling time shares is eBay’s guide to time-share sales.
How NOT to buy a time share
I’ve done several stories on time shares over the years and, as a result, I’m no fan.
Time shares are a product that’s too often foisted on the gullible with high-pressure sales tactics. And when it’s time to sell, there’s often no way to do it, especially when there’s a loan involved.
Like a new car, time shares depreciate radically the moment they’re purchased. But at least a car dealer will buy back the car at some price. Buy a time share at retail from a developer and odds are good you’ll be left twisting in the wind.
I’ll stop short of saying you should never buy a new time share because the world is a big place, people’s appetites vary widely, and there are always exceptions to every rule. But if I ever buy a time share, I’ll make sure I never intend to sell it and I won’t expect much if I do. I certainly won’t finance it, and I will definitely buy it used from a website like those above for pennies on the dollar rather than paying top dollar to a developer.
What to do if you’ve been ripped off
If you feel you’ve purchased a time share based on false promises or misleading sales tactics, do something about it.
- Complain to the feds. To file a complaint, check out the FTC’s online Complaint Assistant or call (877) 382-4357.
- Complain to state and local authorities. Contact the state attorney general and local consumer protection agencies in the state where the seller is located.
- Report it to the Better Business Bureau.
- Talk to a lawyer. You can always sue, or threaten to sue the developer or time-share dealer. The National Association of Consumer Advocates can hook you up with a local lawyer.
If I could prove I’d been hoodwinked by a time-share developer, or anyone else, I’d start by talking to a lawyer. Initial consultations are typically free. If the lawyer thought I had a good case, I’d go to the company that ripped me off, lay out my case and allow them to refund my money. I’d also mention that if they refuse, I’ll be complaining to the agencies above and seeing them in court.
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This article was originally published on MoneyTalksNews.com as 'Ask Stacy: How Can I Get Out of My Time Share Without Being Robbed?'.
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