Monthly Archives: October 2014
Posted by vanguard23
I have spoken to a few folks who own timeshares. While some folks like using their timeshares and use them on a regular basis, an increasing number of folks are just like me, timeshare owners who now see them as a financial liability and can’t wait to get rid of them. You recall why you bought one in the first place…tempted by an offer of a free stay at a resort if only you would sit down for a no-obligation one-hour presentation…or you are basking in the glow of a wonderful vacation and during a vulnerable period wherein you were deluded into thinking you want to come back to the same resort year after year, you succumb to dazzling sales techniques and bought a timeshare property. It’s an all-too-common story about how folks are “suckered” into buying a timeshare. Heck, I even thought at one point that owning a timeshare was like some status symbol…all successful folks owned timeshares. I am one of those folks who was enticed by the idea of owning a timeshare property with dreams of vacationing at that location or trading my timeshare for a stay at another property somewhere around the world. Well, sometimes life gets in the way and before you know it, you stopped (if you even started) using your timeshare property and stopped trading for a stay at another resort, often having to make reservations many months in advance to secure an RCI Gold Crown rated property (if you can get it)…yet the maintenance fees keep coming.
While I can afford to pay the annual maintenance fees, it has become a financial albatross I can’t wait to get rid of, especially since I have stopped using and exchanging the timeshare. The fees started out at less than $450 a year when I purchased the timeshare, then it slowly but consistently increased on a yearly basis: $342 in 2000, $485 in 2007, $573 in 2009, $730 in 2013 and then $766 this year. It was clear that the annual maintenance fees have only one trajectory, and it is to go up and up. ARDA (American Resort Development Association) a trade group for timeshare companies, said in 2012 that the average cost of a timeshare is around $19,000, with an annual maintenance fee of $660. ARDA further reported that an increasing percentage of owner delinquencies in paying their maintenance fees is one of the leading causes of increases in the share of maintenance fees for those timeshare owners still paying them. The stock market downturn fueled by the real estate bust further exacerbated challenges with meeting monthly payments. According to the FTC, timeshares are deeded properties and treated as part of an estate…and will be passed down to heirs, unless the property is sold. If you purchased a timeshare, you and the other timeshare owners collectively own the resort property. Owners share in the use and upkeep of the units and of the common grounds of the resort property. When there are natural disasters that necessitate major repairs, guess who foots the bill for those repairs?
With the abundance of cheaper options for vacation lodging (AirBnB and VRBO, not to mention the hotel aggregators like Priceline, Kayak, Trivago, booking.com, hotels.com, etc., etc.) a timeshare’s promise of more “cost effective” lodging options in resort areas around the world just rings hollow. Couple that with ever increasing maintenance fees and the stark realization that a timeshare’s resale value is next to nothing, it doesn’t make sense to own one…at least to me it doesn’t. Now some folks would suggest you would be able to realize cost savings by purchasing timeshares in the secondary market, where you can find timeshares being sold for as little as $1, but the rising maintenance fees should make you pause. ABC News did a story on timeshares and watching it would make you think twice, if not three times or more, before pulling the trigger on any timeshare purchase.
Getting Rid of My Timeshare
I tried to sell my timeshare back to the developers, but they said NO. I guess, why would they buy it back, even at a significant bargain, when they will be getting my annual maintenance fees in perpetuity. I also tried to do a quitclaim deed, but this proved to be more difficult when you are not living close enough to where your timeshare is located. I then tried to donate my timeshare…but this was easier said than done. I used one of those companies you see on TV advertising they can get rid of your timeshare property (yes, I stupidly paid in advance to have them advertise my timeshare), but that was wasted money and obviously didn’t result in a sale. There were even companies who contacted me offering to get rid of my timeshare for less than $3,000 (and the money would be kept in an “escrow account” until the property is sold)…but I remained leery of paying money in advance as I fell prey to this scam previously, so I said thanks but no thanks. Finally, I stumbled upon TUG (Timeshare User’s Group), with a link to RedWeek. TUG is like an Alcoholics Anonymous group for timeshare owners trying to recover from bad timeshare purchases. Travelers and timeshare owners go to the RedWeek website to rent, purchase or sell timeshare properties. To post a timeshare resale on RedWeek, you first need to pay for a one-year membership of $14.99 and a posting fee of $59.55 (NOTE: Currently on RedWeek’s website, it shows a resale posting for $125). RedWeek then charges a marketing fee of $399 or 3% of the sale price (whichever is greater) when your timeshare property is sold. This was the clincher for me…I do not have to pay for any commission/marketing fee until the property is sold and the deed effectively transferred to a new owner. Additionally, RedWeek Inc is A+ rated by the BBB, which provides an added level of comfort.
Getting Started and Crafting Your Ad with RedWeek
Below are the steps for putting together your timeshare resale ad:
(1) Your RedWeek agent will consult with your assigned licensed real estate broker, regarding a competitive asking price for your timeshare. In the next one to two business days, your agent will e-mail you to begin an initial discussion regarding pricing based on the broker’s recommendation.
(2) Signature requested on an (legal) estoppel form to verify ownership information directly with the resort/developer. This ensures your posting is as accurate as possible.
(3) Signed estoppel form submitted to the resort for completion (this may take seven business days, or more, depending on the responsiveness of your resort).
(4) Full-service resale posting created and confirmed with you when your posting is complete, and link sent so you may review it.
Below is the timeline for my timeshare resale. Your experiences might be different but this probably provides a reasonable blueprint.
– July 4, 2014 – Created a posting on RedWeek.com
– July 5, 2014 – Contacted by assigned licensed real estate broker who reviewed the posting and validated the asking price is in line with the current market
– July 5, 2014 – Contacted by RedWeek representative to fill out and sign estoppel form.
– July 7, 2014 – The estoppel form was then faxed to the resort to verify ownership information
– July 16, 2014 – Upon verification of ownership info, RedWeek resale posting was finalized and became an active posting on RedWeek.com
– August 23, 2014 – Contacted by real estate broker informing me that I have a buyer and there is now a contract on my timeshare
– August 26, 2014 – Signed contract received from Buyer and Seller and sent to the closing company TRCS, Inc. An estoppel is again ordered to verify maintenance fees and taxes are paid and then estoppel is sent to title company.
– September 12, 2014 – Estoppel received from resort
– October 6, 2014 – Closing documents sent out to Buyer and Seller.
– October 20, 2014 – Closing Documents are received by TRCS from both Buyer and Seller.
– October 21, 2014 – Closing takes place and deed is sent for recording
– October 23, 2014 – Recorded Deed is received, and the resort is notified. It takes between 2-3 weeks for the resort to update their records and send a copy of the updated deed to both the seller and buyer.
Total time from initial posting to completion of sale: 111 days (July 4 – October 23)
Total time from resale post being active until completion of sale: 99 days (July 16 – October 23)
Total time from contract to sale completion: 61 days (August 23 – October 23)
Purchasing a timeshare during my younger years was probably my worst decision ever, from a financial standpoint…much worse than purchasing stocks of JDS Uniphase and Sun Microsystems right before the dot-com bubble bursting during the first quarter of 2000. Fortunately, I was able to overcome that blunder and, I would like to think, have learned from it. I am just glad I was able to get rid of that “financial albatross”.
DISCLOSURE: I was not paid for this blog entry…this was simply me sharing my experiences in selling my timeshare property. While I acknowledge that the method I followed to successfully sell/get rid of a timeshare property isn’t the only method (and even if you go with RedWeek there are variables impacting sale of your timeshare property such as location and quality/rating of timeshare, asking price, annual maintenance fees, etc.), I thought someone aching to get rid of their timeshare property might benefit from my experiences.