Required Reading: The Timeshare Resort Public Offering Statement

Let me paint a picture that is a snapshot of nearly every resort purchase experience. You’re on vacation, you show up for a presentation, at the end of two hours you reluctantly say yes, and two hours after that you rushed to sign paperwork because the kids are ready to go and you’re late for dinner. Somewhere in those final minutes you were handed a package, likely copies and owner information…or better yet, the helpful sales rep offered to mail them to you so you wouldn’t have to lug them around all week, pack them in your car, or god forbid take them on a plane. What a nice guy or gal!!! Have I got your attention?

Little do you know that the clock is ticking on your rescission period, probably 5, maybe 10 days later, it will expire and you are seemingly stuck with everything you signed, whether you read it or not. For those of you who chose “mail”, well that sales rep was really helping himself, preventing you (most likely illegally) from the very document all state and regulatory agencies agree you must have ~ The Public Offering Statement.

So what exactly is a public offering statement and why should you read it?

Simply put, the public offering statement is a very detailed history of the project. It is the legal document required that sets forth owner rights of the ownership base, the resort management company, the developer, how units are to be sold, and various other details that outline your recent purchase. But if I had to put my thumb on the one piece of information included in the Public offering most purchasers never read and all sales rep never tell you, I’d thumb Maintenance Fees, with a big fat heavy thumb.

In that document you will find the budget of every year your development has been in place, from the cable bill, to the insurance premiums, to the water bill, to the … tada … maintenance fees. In fairness to the industry, maintenance fees every once in a while go down, however that is usually a small adjustment that followed 2-3 years of steep increases. Look within and you’ll find budgets, years after years of budgets, and all the information you’ll need to make an informed decision.

The #1 complaint resort developers get from owners that have owned for more than 2 years is “If I had known the maintenance fees would go up this much, I never would have purchased!” That’s a classic fool me once paragon. But please, don’t get fooled twice. Every bit of information you need is in your hands while you are in the rescission period. Please take the time to read your public offering, within rescission, the next time you purchase.

Choosing a Reputable Resale Broker

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.