Ask Stacy: How Can I Get Out of My Time-Share Without Being Robbed?

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Like marriage, hammocks and car leases, time-shares are a lot easier to get into than out of. Here's everything you need to know before you buy (or what you wish you'd known before you bought).

The people peddling time-shares must be pretty good at it.

In the nearly six years I’ve been answering questions in these columns, time-shares have been one of the most popular topics. It’s not hard to guess why. Lots of people have time-shares, and it’s not until they need to sell that they learn something shocking: They can’t.

Here’s a sample question:

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

Getting in? Easy. Getting out? Not so much

The simple fact is that recovering even a fraction of your money when selling a time-share can be nearly impossible. The reasons for this include an inactive secondary market, high monthly maintenance fees, and a supply that eclipses demand.

But when you boil it down,the real reason it’s hard to sell a time-share is because most lose a huge chunk of their value the instant they’re purchased.

Maybe that’s why it was a timeshare developer who was able to attempt building the largest private home in America. If you’re interested, here’s a look at it.

How NOT to sell a time-share

The most important thing to know about selling a time-share: Never pay a big upfront fee. A couple of years ago, 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, the 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:

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 you can probably tell, I’m not a fan.

Time-shares are a product that’s 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.

Here’s a fun exercise you can try right now. Remember the developer who was building the largest house in America with profits from time-shares? Here’s the eBay page where you can see how much some of his units are selling for on the secondary market. When I wrote this, there was a three-bedroom, three-bath Orlando unit available for $1.

The person who bought this time-share probably paid more than $10,000 for it. Why would they sell it for $1? Maybe because they can only use this unit one specific week per year, the annual maintenance cost is more than $1,100, they no longer want to visit Orlando every year, want to get out from under the annual bill and can’t find anyone to take it over.

Bottom line: If you’ve got the time-share itch, scratch it for $1, not thousands.

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.

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.

What’s your experience with time-share property? Share with us in comments below or on our Facebook page.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here.

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.

Stacy Johnson

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