Posts

Frequently Asked Questions About Buying a Timeshare on the Resale Market

/in /by

What is a timeshare resale?

A time share resale is simply a timeshare villa (either a week, interval, or points), which is being sold by the current owner rather than by the resort.  In most cases the owner purchased it directly from the resort at a much higher price than the asking price on the resale market.

What is the difference between a deed week and vacation clubs and points?

Deeded weeks are exactly what they sound like:  A deed to a week at a specific resort.  It is usually a specific week and unit number; however usage is usually floating, meaning you are not limited to using it during your deeded week.

Vacation clubs are an ownership that is points based and is often called a membership.  There is usually a set number of years to use the property and then the membership expires or you spend more money to renew the membership. Members receive an annual allotment of usage points that they can exchange for vacation accommodations at resorts within the club’s network.

Points-based ownership allows for more flexible usage options, allowing you to book vacations for a shorter or longer period (or in a smaller or larger unit) than the traditional week-long timeshare interval.

Most deeded week systems have an internal network of resorts where the usage resembles a points system, offering the best of both worlds.  The security of a tangible deeded week, and the flexibility of a points based allotment for usage.

All forms of timeshare ownership can be bought and sold on the resale market.

Why are timeshare resales less expensive than purchasing from a resort? 

Buying a timeshare from a resort presentation sales center comes with significant marketing related expenses, and it directly impacts the purchase price of the timeshare unit.  Most sales centers budget to convert between 10%-15% of all customers on presentations, which means the 15% that do purchase bear the expense of the 85% that do not purchase.  So the 15% pay for the Disney tickets, attraction tickets, resort gifts, marketing, and all the fixed costs that go into bringing in 75-125 families per day that choose not to purchase.

When buying from a current owner, you pay only the fair market value of the timeshare – a price that’s often 20 to 70 percent less than the retail price.  You do not pay the marketing expense associated with the resort sales centers.

How is the “market value” determined for resales?

The market value of a timeshare unit on the resale market is influenced by a number of factors. Some of the important factors are the time of year (season), location, resort amenities, size of the unit, unit amenities, and, of course, market demand.  Timehares located on the Ocean at a sunny time of year are always a good bet to maintain market value.

If you already own a timeshare and are curious about its current resale value, please feel free to inquire with one of our approved realtors and they will be glad to give you a free estimate of what you can expect your unit to bring on the resale market.

What are maintenance fees?

A maintenance fee is a mandatory fee that the resort management company or homeowners association charges its owners. This fee most often covers property taxes, utilities, insurance, and maintenance expenses including beautification of the unit and property. Maintenance fees are generally billed on annual basis, however, certain resorts allow you to pay them monthly.

If you purchase a resale time share, you will be expected to pay all maintenance fees and dues, however those fees will be disclosed to you during the purchase and closing process.

If I purchase a time share resale, will I receive the same benefits offered by the resort?

Ownership rights transfer to the new owner when you purchase a resale.  However, some companies that offer internal usage networks may have restrictions that apply to units purchased on the resale market.  Those companies know the value of the resale market and are attempting to force customers to buy the second, third, or multiple weeks directly from them.  It is up to the consumer to decide if it is worth paying 3-4 times more for a unit to have the ability to use some usage perks designed by the developer, such as the ability to split the week up into two smaller pieces.  In most cases, any and all rights of ownership are transferred when you purchase a resale.

How is ownership of the timeshare resale legally transferred to me?

Resale timeshare closings can be legally complex, but complete timeshare closing and title transfer services are available from the Timeshare Closing Group. Our services are all-encompassing (including deed preparation, recording, management of the escrow of funds, and verification of timeshare usage and unit information), or they can handle any single aspect of the closing which you do not feel capable of handling yourself.  We hope you choose the Timeshare Closing Group, but rest assured title transfer services are available from other well respected companies.  In most cases, the buyers are expected to pay the fees associated with the closing and transfer of the title.

What resale companies are Timeshare Closing Group approved realtors?

The Timeshare Closing Group currently recommends the following as approved realtors:

Concierge Realty – Orlando FL  www.myconciergerealty.com/

FiveStarTimeshare Realty – Montgomery TX  www.fivestartimesharerealty.com/

Timeshare Brokers Sales – Tampa FL  www.timesharebrokersales.com/

Timeshare Resales USA – Orlando, FL   http://www.timeshareresalesusa.com/

Selling a Timeshare? Florida Might Have Your Back

/in /by

They sing a popular song in the south that goes…  In Birmingham, they love the governor…, timeshare owners looking to sell their unit should just substitute Tallahassee.  Specifically they should love the Governor of Florida, Rick Scott.  Earlier this month, Florida’s new Timeshare Resale Accountability Act went into effect.  The law specifically regulates sales in Florida and while it doesn’t cover every possible scam, it’s a good start for sellers looking for protection.  The law went into effect on July 1 and offers some important protection for timeshare resales by providing penalties for resellers that:

  • Misrepresent that some buyer has an interest in buying a timeshare resale
  • Collect payments from sellers before the seller signs a written agreement to the terms of the resale
  • Does not honor a seller’s cancellation request made within seven days of a signed agreement or fail to provide a refund within 20 days of cancellation.

 

Consumer advocates, including this blog, have been warning about scams and giving advice to the pitfalls of choosing a resale broker.  Florida now provides protection from the most common misrepresentations sellers face when looking to sell a timeshare.

The second two provisions are details that have governed the resort sales center for decades in most jurisdictions.  But the first provision is the one that is most important to the resale market.  Scam agencies know that creating urgency is the quickest way to get the seller to pay fees in advance of a written contract.  Nothing says urgent more than we have a buyer waiting.  The timeshare resale market is a thriving, and important part, of the resort timeshare sales industry.  But note that Sellers still outnumber buyers in the market, which means quite simply, a good broker will be outlining a more realistic sales timeframe.  Anyone saying they have a buyer waiting is likely lying, but at least those liars are now regulated in Florida.

The Act fails in my opinion to completely rein in scam agencies because it fails to eliminate upfront fees; it simply requires that the fee come after the signing of a contract.  So while there is some protection that Florida is providing, it could have gone further in my opinion.  This is why my advice in previous blog articles is still relevant.

  • Don’t deal with a broker demanding an upfront fee from the seller.
  • Do your homework, and
  • Do your homework.

While this is a Florida law and applies to only Florida, it is a good start as we now have a major jurisdiction recognizing and being proactive to protect resale consumers.  Hopefully we will see similar legislation make its way into other popular timeshare states, such as California, Hawaii, South Carolina, and Arizona.  Some of the good and well respected resellers are solidly behind the new Florida law, such as Concierge Realty, FiveStar Timeshare Realty, and Timeshare Broker Sales as the new law puts into place practices they have been following for years.

The fact is if you want to sell your timeshare you must be pay attention to the process and choose to deal with respected brokers.  The new Florida law allows you to proceed knowing the government is at least trying to cover your back.

Choosing a Reputable Resale Broker

/in /by

The Timeshare resale market is by no means a new wrinkle to the global timeshare sales world.  The Timeshare industry projects sales for 2012 to exceed $8 billion dollars in U.S. sales alone.  While a small percentage of that figure is made up of timeshare resales, that percentage continues to grow yearly as the timeshare owners become more savvy to available options to purchase additional weeks through “independent” realtors.

The decision to BUY a timeshare comes with choices as a consumer can purchase from either a developer at a resort sales center or from a trusted resale realty company.  The decision to SELL, however, comes with little choice, as the selling consumer is often not given the option to sell the unit through the sales center that represented the sale.  A selling consumer is forced to navigate the internet to locate an honest resale broker.

Timeshare scams have been rampant on the resale market, but there is good news, there are plenty of honest resale brokers, some of who go to great lengths to prove their legitimacy. Finding a legitimate, licensed broker is not that difficult, consumers should follow some basic steps to ensure they are dealing with a legitimate company.

  1. Is the resale agency licensed?  Do not take their word for it, check with the Real Estate Commission in the state where they are located.  Reputable agency’s proudly list the licensing information on their website.
  2. Check with the Better Business Bureau, is the agency accredited?  Dealing with an accredited agency is advised.  However, the fact that an agency is not accredited is not fatal.  Bureau accreditation often takes one year of continuous stellar business practices, so it is possible the agency you find may be legitimate, but new.  Check the bureau complaints and steer clear of any business (accredited or not) that has a multitude of complaints relevant to a sale.
  3. Does the agency charge a listing fee?  This is important.  Reputable, legitimate real estate resale agencies do not charge a listing fee nor do they charge you to speak to an agent.  They are willing to make their fee through traditional real estate commissions.  You want an agent who is motivated to SELL your week, not one who is motivated to LIST your week.  Too many resale sellers have paid a listing fee only to find the number for the agency is “no longer in service”.  Don’t make this mistake.
  4. Other simple ways to check exist on the internet.  If the agency uses ebay for listings, you can check the seller ratings.  Various message boards and forums are available and a quick search within the forum will reveal information on an agency.

These are just some simple steps to ensure you are dealing with a legitimate agency.  While the advice is basic, you don’t want to be the consumer that should have known, but didn’t check.

Anyone with a specific question about an agency or agent, feel free to email this site using the “Contact Us” tab at the top.

I will not only provide a response, but I will provide the backup work (websites, ratings, links) so you can independently verify the information I provide regarding the particular agency or broker.