Selling Your Timeshare

The American Resort Development Association (ARDA) has released six advisories to help consumers and timeshare owners navigate through the secondary market, which includes timeshare resellers, internet advertisers and other resale companies, to ensure a safe and positive selling experience.

The advisories were developed to help dispel the growing misinformation and confusion in the secondary marketplace by providing specific tips on reviewing timeshare resale companies, their practices, costs and services in the marketplace.

Resales Advisory I: focuses on the types of timeshare resellers with four steps to guide consumers through the process: utlizing existing resources, understanding timeshare resale companies, choosing the best option, and following basic rules.

Resales Advisory II: provides tools to evaluate resale companies with a list of tips.

Resale Advisory III: ARDA learned of a new scheme involving timeshare resales that not only preys upon consumers but falsely cites ARDA as a reference. ARDA does not contract with, become involved with, authorize, or endorse any company’s resales activities. 

Resale Advisory IV: ARDA advises consumers of the most recent resale precautions.

Resale Advisory V: ARDA has become aware of a deceptive solicitation practice, commonly referred to as transfer or repurchase solicitations, being used by some unethical transfer companies aimed at timeshare owners.

Resale Advisory VI: Based on communications with numerous timeshare owners, ARDA cautions consumers on a new scam targeting timeshare owners. 

Selling Tips

DO

Check with your resort developer (if they are still selling), resort management company or homeowner’s association to see if they either offer a resale program or are affiliated with a broker to handle resales. If so, ask for the statistics on past resales.

Check with other owners at your resort. Those who own the weeks before or after you may wish to purchase more time.

Check with local licensed real estate brokers who handle resales (check the real estate or classified section) if you have purchased in a resort area. If you find one, expect commissions to be in the 10 to 30 percent range. You may also find a broker in your hometown, but he or she may not be that familiar with timeshares.

Run ads in the real estate or travel sections of newspapers in the resort area or your hometown.

Research advertising costs in national publications that have an emphasis on travel and leisure. Online advertising rates may be more cost effective, but check and compare prices. Check at your library to see which have a classified section for travel/real estate opportunities.

Understand the specific services of the resale company that you hire before signing a contract or paying a fee. For instance, if a resale company is only helping you advertise your timeshare, then their services typically will not include assisting you with writing a sales/rental contract, negotiating with a buyer/renter or assisting with the closing. However, the resale advertiser might have a licensed affiliate who can help you (probably for an additional charge).

Notify both your resort and your exchange company in writing that you are selling your timeshare with full details about the new owner.

Deal only with licensed real estate brokers if you are doing more than just advertising. When in doubt of a company’s reputation, ask for references – and ask to speak with past sellers. And check out the status of the broker’s real estate license at www.arello.com

Understand that timeshare resellers holding real estate licenses are usually “full-service” companies. This means that they will not only help with advertising your timeshare but also assist buyers, help negotiate prices, write up contracts and assist with the closing. Some licensed companies may charge an up-front fee (if permitted by state law) or they may only—or also—charge a commission (10% to 30%) when a sale occurs, based on the price for the timeshare interest sold.

DON'T

Don’t expect to receive the same amount that you originally paid for your timeshare. Many factors influence the resale price including season, location, unit size and age. In particular, if you have owned your timeshare interest for less than five years or if it is not in a well-known resort location, the resale price will reflect this. Remember, a timeshare should be considered a vacation-use product, rather than a traditional real estate investment, although it may include a small interest in real estate.

Don’t give up the right to use the timeshare accommodations for any purpose while you are selling your timeshare unless you have decided to rent your week/interval —for which you should receive the rental amount less any commissions.

Resale Checklist

For the most comprehensive information on the resale process, visit the Timeshare Resale Resource Center.

Even though it’s a vacation-use product, selling a timeshare usually involves the same steps involved in selling real estate, such as a house. Before selling your timeshare, make sure that you have your paperwork in order.

The following checklist should help:

• the name, address, and phone number of the resort


• the deed, and the contract or membership agreement which clearly identifies the timeshare you own


• the financing agreement (if you are still paying for the property)—remember you’ll have to pay this off before you can transfer your timeshare to a new owner


• any title insurance information


• any other information to identify clearly your particular interest or membership


• the exchange company affiliation


• the amount and due date of your maintenance fee, and whether it has been paid for the current year


• the amount of real estate taxes (if billed separately), the due date, and whether they have yet been paid for the current year.


• the date your timeshare will next become available for use by a new owner or when a new owner can first make a reservation


• whether or not your timeshare is a fixed week and/or unit or requires an advance reservation (a floating or flex-time timeshare)


• gather copies of the documents governing the resort owner’s association, if any, the resort’s rules and regulations, reservation rules and any other information that would be helpful to a new owner, such as area attractions


• know whether or not your vacation interest is legally classified as real estate or personal property, as this will make a difference in how it is conveyed to a new owner

Selecting a Resale Company

For the most comprehensive information on the resale process, visit the Timeshare Resale Resource Center.

The following are the procedures that ARDA and its members suggest using when choosing a resale company:

Be prepared by having all your paperwork in order before proceeding (see the resale checklist).

Ask what methods the company will use to advertise and promote the property. How can you get regular information on the status of the property? Be sure you know exactly what services the company will perform before making any payments, signing a contract or giving any credit card information. Get a written contract with a full description of the services to be provided.

If you receive an offer from a resale company by telephone, email or otherwise, resist any pressure to make an immediate decision. Ask the reseller to put details of the offer in writing and send the information through the mail or by email. Obtain a written contract before making any payments or providing your credit card information.

Once you have received the contract, be sure you understand the terms and conditions, including:

- any fees, commissions or other costs you must pay
- whether you can still rent or sell the interest on your own
- how long the contract will be in effect
- exactly what services the company will provide
- who is responsible for documenting and closing any sale

Some resale companies charge up-front or advance fees for resale activities. The legality of these fees depends on your state law. Check your state law before paying any advance fees. You may wish to consult with a state government agency such as the Department of Real Estate, Real Estate Commission or the Bureau of Timesharing to determine the legality of such fees in your state. A list of such agencies is available at www.arello.com.

Ask if the company holds a real estate brokers license in its home state. Check with the state real estate licensing agency or www.arello.com to verify the information.

Understand that, despite what some salespeople may tell you, there are no guarantees that your vacation interest can be resold or rented at a particular price or within a certain period of time. Resale of property is not an overnight process. Do not expect immediate results, but don’t hesitate to check on the progress your company is making on reselling or renting. If you have listed your timeshare with a resale advertiser (rather than a licensed broker or sales person), any buyer or renter inquiries will usually come directly to you.

If you have a problem, report it to the proper agencies: The Better Business Bureau, state and local real estate commissions and consumer protection agencies, consumer reporters, and state attorneys general.

Make sure you get a written contract and understand the terms of the contract before paying any money.

Be aware that some resale companies require up-front fees which are not refundable. Some of these fees may legitimately be for advertising your timeshare—ranging from as little as $25 to hundreds of dollars.

Be wary of companies offering gimmicks, such as money-back guarantees, or threats or scare tactics in order to get money from you.

Ask questions regarding the company’s background, history of resale or rental success, and who at the company, if anyone, will handle the closing and at what cost.