Advice for timeshare owners who wish to sell

It has been a cold winter in much of the country. Snow in Jacksonville, Florida, anyone? Around this time of year, we normally get a bunch of questions about timeshares. If you’re considering one, you’ll want to read our response to these two questions before you go to the so-called “free” lunch.

Q: Our timeshare is paid for. We don’t want it anymore. Can we just stop paying the annual dues? The resort can repossess it or whatever.

Q: I have a timeshare in Palm Canyon, California, that I’ve never visited. I have paid the dues faithfully since 1997. I am not in default. Preferably, I would like to relinquish the timeshare ownership or trade it for something in New England, closer to where we live. My husband and I are also aging and do not travel as much as we used to. At least if it was closer, we might get to use it. We are open to suggestions. How should we proceed?

A: We wish we had a dollar for every letter we’ve received over the years asking how to get rid of timeshares.

So, let’s start with this: In our many years of writing this column, we have yet to receive a single letter from a reader who successfully sold their timeshare by using the services of one of the many timeshare companies that require an upfront fee.

And now, a warning: If you own a timeshare and want to sell it, you’ll have to be very diligent and careful in the steps you take to get it sold.

From our perspective, there are two types of timeshare companies. Large ones have hundreds of properties. They typically use a point system, assigning various numbers of points for the different types of properties they offer. Small timeshare companies may just own one property.

The larger companies allow you to use your timeshare in the exact manner you purchased it. But you also can elect to go to any other property they manage by trading in points that you receive each year or have accumulated. If you have enough points, you can usually get the property you want at the time that you need it.

These larger companies also typically have an exit team that can assist you with the sale of your timeshare unit. Don’t expect to make money when you sell your timeshare. The benefit is being able to get rid of it when you no longer want it. Many owners keep their timeshare and simply use the annual points to stay at other properties around the world. Eventually, when they die, their kids will inherit the timeshare and can decide whether to keep it or sell it.

The real problems come with single property timeshares. Let’s say you purchased a timeshare at a vacation resort in Cancun or Phoenix. In this situation, you can only sell the timeshare to another person looking to buy at that specific resort. Your market of prospective buyers is limited. Worse, you’re competing with new, flashier or more modern timeshare properties that come online each year.

If your timeshare property has a process for buying back your ownership interest, go for it. However, we suspect that the management company at the resort doesn’t want to purchase the timeshare, as it would fall on them to resell it and carry the costs of the unit until it sells. Your best bet would be to find other owners in the resort that are looking for additional weeks or have other family members that want to buy into the same resort.

Sometimes owners will push fliers under the doors of the other units to try to generate some interest. They think: If someone else is staying in my particular week, then perhaps they have a friend who would like to come with them. Good thinking. But, some timeshare properties prohibit this, and you could wind up getting fined.

It can be tough to find the right person to buy into a single property timeshare resort. In the case of our reader, who prefers a timeshare resort in New England that is closer to where they live, they’ll need to sell first and then try to find what they want on the East Coast. On the other hand, if they are with a larger company that has a sales office that helps owners buy and sell or use points, they could likely use those points to stay at a property closer to where they live.

So, if your timeshare doesn’t offer an exit strategy, and you still want to sell, consider a DIY approach. Some online marketplaces will allow you to auction off your timeshare. Some take a percentage of the sale or charge a small fee for listing your timeshare. Just know you’ll be competing with lots of other timeshare owners. Be prepared to just give the unit away for nothing, or very little.

We’ve written about how to sell timeshares before. But, as a refresher, start by choosing the website or listing company carefully. Before you sign any agreements, independently check the site or company for complaints. Read those carefully so you know what you’re getting into. Figure out how you will get paid. Read your timeshare property materials to understand the exact process your timeshare development uses to transfer timeshare units from a seller to a buyer. Keep in mind that in some states if your buyer purchases your timeshare and they default, you might continue to be on the hook for maintenance fees.

About that: Some states have enacted laws that would keep sellers on the hook for maintenance fees after the sale of their timeshare unit. Presumably, some sellers found a way to “sell” their timeshares to a shell company that simply went out of business after their purchase of the timeshare. To remedy this situation, some states’ legislation is written to keep the seller on the hook for a certain period of time after the sale.

If your timeshare property offers the services of its sales team, consider the fees they’ll charge. You need to know what the transaction costs are, and understand any other fees you or the buyer might need to pay to transfer the timeshare.

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(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)