How do I select a timeshare resale company?
If you have decided to resell your timeshare, you should select a resale company that’s right for you depending on your needs. There are resale advertisers on the web, companies holding real estate licenses and other options. For a description of the different options, click on one of the questions below.
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Should I use a resale advertiser?
Timeshare resale advertising companies most frequently are those that call you unsolicited and ask you to let them “sell” your timeshare for an up-front fee. Frequently, timeshare resale advertising companies have taken a lot of criticism (not to mention some government legal actions) for charging high up-front fees and doing little or nothing for the timeshare owner who listed his or her timeshare for sale or rent. In reality, without a real estate license, a company cannot “sell” your timeshare; they can only advertise it and direct any inquiries to you, the owner.
But, the first step to selling anything is letting people know it’s for sale—so whatever you do you’ll need to advertise. Just remember it is not prudent to give financial authorization or payment to anyone until you’ve thoroughly investigated the company and comparison shopped. There are many places you can advertise your timeshare on the Internet or in print for little or no cost.
If the resale company is only helping you advertise your timeshare, then their services usually don’t include assisting with a written sales or rental contract or negotiating with a buyer or renter who might express interest in your timeshare. However, the resale advertiser might have a licensed affiliate who can help you for an additional charge.
In timeshare resale advertising, there is considerable cost variation—from free to hundreds of dollars or more. Be sure you understand what services are included in any fee and how long a period your timeshare will be “advertised.” These advertising fees go by many different names, so be sure you understand what is included.
In advertising, you also want as many people as possible to be able to find your specific timeshare, so Internet resale sites with lots of traffic (visitors looking for timeshare sales or rentals) can be a good choice. Look for Internet resale advertisers at an affordable price who provide you with guidance on what to include in listing your timeshare for sale or rent.
How do I select a resale advertising company?
Always carefully investigate any company before making a selection and paying any money.
1. Research the legitimacy of the resale advertising company:
• Ask for references from the company and contact those consumers.
• Contact the Better Business Bureau to determine if there have been complaints filed against the
company and if it is rated (A through F).
• Check with the state attorney general’s office in your home state, the state where the company is
located and the state where your timeshare is located.
• Check with state consumer agencies in your home state, where the company is and where your
2. Ask what methods the company will use to advertise and promote the property. How can you get regular information on the status of the property?
3. Be sure you know exactly what services the company will perform before making any kind of payment, signing a contract or giving any credit card information.
4. Get a written contract with a full description of the services to be provided. Even with a written contract, if the company contacted you without a prior business relationship, the risk of a scam can be higher.
5. Once you have received the contract, be sure you understand the terms and conditions, including:
• any fees, commissions or other costs you must pay
• whether you can still rent or sell your timeshare on your own
• how long the contract will be in effect
• exactly what services the company will provide
• who is responsible for documenting and closing any sale
6. Some resale companies charge up-front or advance fees for resale activities that are not refundable. The legality of these fees depends on your state law. Check your state law before paying any advance fees. You may wish to consult with a state government agency such as the department of real estate, real estate commission or the bureau of timesharing to determine the legality of such fees in your state. A list of such agencies is available at www.arello.com.
Are there licensed real estate brokers who handle timeshares?
Yes. Check online, the phone book or with your resort manager. Additionally, ARDA has members that are licensed real estate brokers.
Deal only with licensed real estate brokers if you are hiring a company to do more than just advertising. Conduct due diligence to determine if it is a legitimate resale company and ask for references from the company – and ask to speak with past sellers. You can find the status of the broker’s real estate license at www.arello.com.
The benefits of dealing with a reseller having a real estate license are that he or she works on commission, is motivated to make sales in order to earn those commissions, has to qualify for the license usually with state-required training and, if the person violates the law, the person’s or company’s license can be suspended or revoked by the state.
Should I use a licensed real estate broker to sell my timeshare?
Timeshare resellers holding real estate licenses are usually “full service” companies. This means that they can not only advertise your timeshare for sale or rent but also assist buyers, help negotiate prices, write up contracts and assist with the closing of any sale or rental. Some licensed companies may charge an up-front fee (permitted by very few state laws) or they may only—or also—charge a commission (10% to 30%) when a sale occurs, based on the price for the timeshare interest sold. You can check on the licensing status of individuals by name in 42 jurisdictions at www.arello.com.
If you are buying or selling a deeded timeshare interest, you are buying or selling real estate. The whole process will work much like buying or selling a home—with slightly less paperwork. Look for licensed resellers who can give you detailed guidance on this entire process.
Licensed resellers (as do some advertisers) often work with a title or escrow company. Title and escrow companies assist both the buyer and seller in “closing” the sale and ensuring that the process is correctly documented (such as seeing that any new deed is recorded, the resort is notified of the new owner, money transferred correctly, and so forth). There are additional costs involved in closing any real estate transaction, and you should be sure to get an estimate of those, which can vary from state to state. Often the seller pays the closing costs, but portions may be negotiable, so be sure to inquire about that as well.
Generally speaking, consumer timeshare owners (or any real estate owner) can advertise or sell property they own without having a real estate license. However, state laws vary with regard to whether a third-party advertiser should have a real estate license. Even more confusing is the fact that many state-based real estate laws were enacted long before the Internet existed and have not necessarily been updated to reflect the interstate and global aspects of modern real estate transactions. If you have questions in this regard, your best resource is your state real estate commission or other real estate licensing agency. (A list of them can be found at www.arello.com.)
What other kinds of companies are available?
A word of caution. There are other companies who may offer to buy your timeshare week, take it for a fee that you pay, help you give it to charity, put your timeshare in a travel club or some other “creative” solution. Be careful. While some of these offers may be legitimate, check them out thoroughly before paying anything.
Unfortunately, not all companies are reputable, so please make sure you understand who you are dealing with, what their contract says, what others who have used the services think and most importantly if it sounds too good to be true – it probably is. Some of these companies are asking for hundreds to thousands of dollars from timeshare owners. One company may have come up with a good idea which they execute well—while others may simply copy the original idea as a way to make money.
One particularly troubling recent model seems to be companies that ask to be paid a substantial sum in return for taking ownership of your timeshare. You could pay from $2,000, $3,000 or more to one of these companies when you deed—or otherwise transfer—your timeshare to them. They usually promise that you won’t pay any more maintenance fees because they will take title to your timeshare and pay the fees until they sell it or otherwise dispose of it. Be sure they can deliver on their promises.
Communicate with your home resort so they know who now owns your timeshare interest and who to bill for the maintenance fees and taxes. You will need to be sure the company is completely reputable and performs all of the procedures necessary to transfer your timeshare according to law (which includes promptly recording the deed in the name of the new owner for real estate timeshare interests).
Any time you are asked to pay such a large amount of money to anyone to dispose of something you already own, you should exercise extra caution. State government officials are receiving complaints about some of these and other kinds of high-fee timeshare “repurposing” companies. Check them out carefully before paying anything—and discuss the situation with your resort manager and a trusted friend or advisor.
If I find a company I am convinced can meet my needs, how should I pay them?
If any company asks you to pay them (in advance of your getting a contract or any services) via certified or electronic check, money order or by bank transfer (the equivalent of handing them cash), you may have little or no chance to recover your money if there is a problem. Once you transmit the money, it’s gone. Often times, it is the illegitimate companies that urge you to transmit money to them immediately by these methods—and then you never hear from them again.
Here is where you may be better off to pay by credit card due to the protections afforded consumers under the federal Fair Credit Billing Act (FCBA). The law applies to credit card disputes about “billing errors,” including charges for goods and services that weren’t delivered as agreed. This is often the case when dealing with fraudulent companies: they make promises to you that are never fulfilled. Just remember to investigate the company you plan to do business with first in every case.
However, the FCBA imposes a time limit on disputing an improper charge on your credit card. You must notify your credit card company in writing within 60 days after the first bill containing the erroneous charge was mailed to you. Complete details on how—and when—to proceed are described in a helpful pamphlet called “FTC Facts for Consumers: Fair Credit Billing”.