Finding a company to help with the resale of a timeshare in vacation property can be a minefield of potential scam artists and shady businesses. Last week we wrote about the new purchase of time shares and the inherent dangers of being scammed that lie therein. This week we will focus on those who already own a timeshare and are looking to move stake in the vacation home.
Unfortunately, with the economy in a rut and most people cutting every corner to scrimp and save, the current market for reselling a timeshare is not very promising. Many owners hoping to sell are facing the prospect of taking a significant loss against the money they initially invested in their set time at the home-away-from-home.
The barren condition of the timeshare marketplace has been partially responsible for the recent influx of fly-by-night companies looking to make a quick buck off of owners who are desperate to sell. This desperation often comes in the form of yearly maintenance costs that often exceed the initial cost of the timeshare over a few short years.
There are several different types of scams that are pretty commonly employed in the timeshare resell marketplace. Here are a few of the most popular:
TIMESHARE RESELL COMPANIES
These companies often reach out to owners over the phone, email or by letter with guarantees that the marketplace is “hot” and they will be able to help the owner sell their property. All you have to do is give them a call.
These companies claim to provide a list of potential properties to eager-to-purchase sales agents and prospective timeshare buyers. Claims are made that most properties listed are often sold at a profit and at the very least break even. All you need to do to get your property on that successful listing is pay a small upfront fee, usually between $300 and $700. This fee is sometimes given with a verbal promise (not written) of guarantee if the timeshare doesn’t sell, or even a government bond is promised in return if no sell happens in a set amount of time.
In most cases, the properties don’t sell. There is no list, or if there is a list they are not actually “hot” for timeshare properties in the location where you are selling. The fees are never returned and the government bonds normally total around 10% of the upfront fee.
There are literally thousands of companies online that offer to do nothing but advertise timeshares via their website. Many make questionable claims as to how they will help in all the headaches and paperwork of finalizing a timeshare sale. In fact, they are unlicensed and shouldn’t be giving anything that could be construed as advice on the matter, and in fact, they refrain.
The only service these sites offer is a listing on their website. It doesn’t matter if the timeshares sell or not, they make their money strictly off of selling the initial listing. The timeshare owner looking to resell who doesn’t mind taking care of the closing on their own would be better served by using a free site such as Craig’s List.
COLD CALL COMPANIES
There are numerous reports of timeshare owners receiving phone calls or letters from resale companies claiming they have a potential purchases ready for their timeshare. They claim the timing is such that the sale must be closed immediately and often demand a large fee to cover the closing costs, somewhere between $500 and $3,000.
These are outright scams. The companies collect these “closing cost fees” then close up shop and move to another state or county to avoid prosecution. There never was a potential buyer and the only thing they were interested in was getting quick cash from those looking to sell.
TITLE TRANSFER/POST CARD COMPANIES
These scammers main interest is getting owners to deed their timeshare properties to them so they can then resell at a profit.
Normally, they set up large meetings at a local hotel and pitch a number of timeshare owners at once. Their claim: their properties are worthless with no value or chance for appreciation, the maintenance fees are too high, and the best bet is to dump control of the timeshare into their hands.
Of course, an upfront fee up to thousands of dollars is the cost to shed the burden. Often the company will not actually complete the transfer until after the property is sold and the owner will be stuck paying the maintenance along with the steep deposit they made for the title transfer. The timeshares are often then just placed on internet auction sites, which the owners could have done themselves.
These are just some of the sketchy dealings one can expect when trying to sell their previously purchased timeshare property.
The Better Business Bureau offers the following tips for those who are interested in selling:
— Find a timeshare seller you can trust. Check with the BBB at bbb.org to check the company’s accreditation.
— Never agree to anything over the phone before you have done research into the company with whom you are interested in doing business. Also ask to be sent written materials.
— Find out what state they are located in and confirm if their salespeople are licensed to resell timeshares with the state licensing board.
— Beware of any company that demands an advance fee. Most legitimate timeshare resellers will not collect their fee until the finalization of the sale.
— Don’t fall for the hard sell, aggressive tactics or outlandish promises. The market is pretty tough right now for moving timeshares; any legit business is going to honest with you about that fact.
The best solution might be exploring selling the timeshare on your own. An ad in a newspaper or ebay will be much cheaper than the fees charged by the shady companies we just covered. If desperate check with the timeshare resort and see if they have a buyback option. This will probably be a fraction of what you initially paid, but it provides the opportunity to get out from the mounting maintenance charges without having to pay an upfront fee. The point of a vacation home is to provide fond family memories to be cherished, don’t let the sale of a timeshare leave you with nightmares.