Updated on November 5, 2007.>
DESPITE THEIR UNWILLINGNESS to travel just weeks after the Sept. 11 terrorist attacks, Dowell Multer and his wife made the trip to their mid-October timeshare at the LaCabana Beach and Racquet Club in Aruba. "Things had changed a lot," Multer says. "It was a much quieter place." The couple vacationed there for two more years before deciding they did not want to return.
But after three years on the market, Multer, who is now 73 years old, still hasn't found a buyer. Granted, there was interest from companies that specialize in timeshare resales, but they all demanded hefty upfront fees. "One person wanted $1,500 upfront and swore up and down it's a great market," Multer says. Another asked for $599, promising to advertise the property world-wide. A third wanted $300. Multer politely declined. Yet, with the $900 maintenance fee due each year, he's desperate to sell. "Right now, we would be very happy if we could just give it away to somebody," he says.
The Multers aren't alone. While there are no official statistics on the number of timeshare owners looking to unload their investment, the sheer size of the marketplace suggests there are thousands if not hundreds of thousands of unhappy timeshare owners looking to get out.
With timeshares, you typically buy the right to stay at a resort for a week each year, as long as you live. (And because this is a deeded property, your timeshare will be passed over to your heirs after you die.) That may sound great at the developer's presentation: Buying a timeshare from the developer directly usually comes with incentives like discounted weeks at the resort or free lunches, and is often something of an impulse purchase. But it also means you've bound yourself to an annual maintenance fee, which can run as high as $1,500 and can increase if the timeshare management decides to do improvements upgrades on the property.
Needless to say, life doesn't always agree with such arrangements. People's circumstances change and, for one reason or another, they can no longer use their timeshares. That's where reality kicks in: Selling the timeshare is tough. Unfortunately, recouping your original costs especially if purchased from the developer is next to impossible.
Successfully unloading your property is a matter of adjusting your expectations and knowing what your options are when it comes to the sale. Here's some advice:
Start with your resort
When trying to sell your timeshare, going to your resort is a logical first step: Some resorts have buy-back programs, where they will offer to buy your timeshare week or points at a certain price. The practice, known as "right to first refusal," is meant to help preserve the value of timeshare properties, explains George Marine, a real-estate investor and timeshare owner from Long Island, N.Y. What it basically means is that if you want to sell your timeshare, the resort will offer to buy it back at a certain price, typically lower than the purchase price but still higher than what the owner may get at the resale market. While most brand-name resorts such as Disney and Marriott Vacation Clubs have right of first refusal clauses in their contracts, how often they exercise it will vary by resort.
If your resort doesn't have a right of first refusal or any other resale program, they may at least refer a reputable broker or resale agent.
Find the right marketplace
However you approach the resale of your timeshare, one thing's for sure: Never pay an upfront fee to a broker. "This is a wide-scale scam," says Caroline Lindholm, president of the Greater New York Timeshare Owners' Group (GNYTOG). "There are so many agencies out there that will take $395 or so, and promise you the moon. And the prices [they say you can get for your listing] are totally unrealistic."
Pat Teal, a 72-year-old timeshare owner from Myrtle Beach, S.C., learned that the hard way. Back in 2003, she contacted several resale companies about selling her timeshare at the Fairfield Beach Ocean Ridge in South Carolina. She was quoted a $300 upfront fee, which she paid using a credit card, and a $200 commission after the sale was complete. But two months later she called to inquire about any interest in her property, and the company had disappeared. "I kept calling and calling, but I couldn't get a hold of them," she says. (According to Better Business Bureau records, the company Freedom Resorts International in Hudson, Fla. has gone out of business.) Teal figured out her $300 fee was a lost cause, but imagine her dismay when her credit card was charged another $200. She appealed the charge with the credit-card company and her $200 was refunded, but still, the experience was sobering. "I would be more than happy to pay a commission, once the timeshare sold, but I hesitate to pay money upfront again," she says.
such as RedWeek.com or Tug2.net charge to list your property, says President Howard Nussbaum, president of the American Resort Development Association (ARDA), an industry group. "If you're dealing with a reseller, make sure they're a licensed agent and they don't make money from upfront fees instead of actual sales."
If you're the do-it-yourself type of person, look at online marketplaces like RedWeek.com or Tug2.net, or even try to auction it off on eBay. RedWeek.com and Tug2.net charge posting fees of $49.99 (for 12 months) and $10 (for three months), respectively, while on eBay, you'll have to pay a listing fee (around $5) and will also owe a fee if it sells (click here.
Price it right
The most critical part of selling your timeshare fast and at a good price is knowing how to price it, says Marine. He has sold three timeshares in the past several years, all within two months of listing them.
Marine's strategy: He researched what similar timeshare units in the same resort were selling or had recently sold for and listed his unit at 20% lower than the prevailing price. "You have to be realistic with the price," he says. If you bought from a developer, don't expect to get back your investment. At best, you would sell back for 50% to 60% of the initial price. Even that may be a long shot, depending on the type of property like which week you own, where it is and how high your maintenance fees are.
Consider Pat Teal's situation. The 105,000 Fairfield points she and her husband bought for $4,900 in 1996 would fetch no more than $2,100 ten years later, according to Lindholm, since the going rate for the resort was roughly two cents per point.
Just how do you research sales prices? Start with browsing RedWeek.com and Tug2.net postings. Be sure to search for properties similar to yours. Ideally, it would be units of the same size and in the same resort, Marine says. Keep in mind, those are asking prices and not final sales, but if you follow the listings for a while, you will notice the trends. The community boards on Tug2.net are also useful.
For actual deal makers, go to eBay: Its "Advanced Search" option allows you to search completed listings only, which means you can see the final sale prices of auctioned timeshare units. You'll need to create an account, which is free. But remember that because eBay is often the place buyers go to find bargains and many owners price their listings too low you may find that eBay prices are on the lower end of the scale, says Lindholm. (To avoid having to pass along your timeshare at too low a price, you can set a reserve price, which means the auction will not be successful if bids don't reach a certain price level.)
They prefer to be contacted by email Also, search Yahoo groups (online discussion boards powered by Yahoo) for a group specifically dedicated to your resort, where owners discuss various issues pertaining to their timeshare. One Fairfield owners group, for example, currently has almost 3,500 members and 265 new posts within the past seven days alone.
donateforacause.org, a nonprofit organization that, in partnership with a timeshare closing company, will sell your timeshare and donate the proceeds to charities like the National Foundation for Cancer Research and the American Kidney Fund. For the owner, the sale price is deductible, up to $5,000. (So if you were in, say, the 28% tax bracket, and your timeshare was sold for $5,000, you'd get $1,400 knocked off your tax bill.) Timeshares that have outstanding mortgages may not be accepted, according to donation coordinator Marcy Sternhagen, but each case is reviewed separately.