Three Things To Know Before You Buy A Timeshare
#1- The first thing to know before you consider buying a timeshare interest
Is that there is more than one way to do so, and, depending on your choice, the average $22,00 retail price you’ll pay to the timeshare resort developer, can be dramatically reduced if you opt to purchase the identical interest from a reputable licensed real estate broker specializing in timeshare sales. It is also possible to locate an owner desiring to sell by checking for timeshare inventory on websites such as Redweek, Craig’s-List or E-Bay. Although the price you can obtain by purchasing directly from an owner will be the lowest price you’ll find anywhere (sometimes as low as $1.00), I still recommend purchasing through a reputable broker, even at a higher sales price (say from $1,500-$5,000). My logic is twofold, first, there is still a very substantial savings from buying from the broker as compared to the resort developer, and second, because there are pitfalls in dealing with an individual seller who most likely will not be aware of certain resort transfer requirements and other developer generated issues, such as restricting the full use of the interest if not acquired directly from the developer. These issues are significant enough in my estimation to require me to recommend using an experienced licensed timeshare savvy real estate broker who will know which resort timeshare interests can be developer restricted and therefore to be avoided by the unwary buyer, the extra up-front money is indeed worth it!
An additional plus in avoiding the developer’s high-pressure sales pitch is that you are not therefore being pushed into a same day pitch/purchase situation by a commission hungry timeshare salesperson. If you are seeking to purchase a timeshare interest from the secondary market means that you have done your due diligence homework and are purchasing a timeshare interest because you have weighed all of the timeshare purchase pros and cons and are moving forward with your acquisition in the most economically efficient way practicable.
Lastly, by searching in the secondary market, you may have the opportunity to purchase a deeded interest, a product that the major developers no longer offer, but instead now sell ‘points’ to be redeemed for your stays at the developers resorts without being restricted to a specific resort or timeframe. As tempting as increasing your vacation flexibility is via purchasing points, the downside is that you will now have to compete for reservations with others, often including members of the public, but will still have the annual resort maintenance fee obligation, even though you may not end up with your desired vacation time or location. The deeded property is admittedly more restrictive, but you actually ‘own’ your vacation week in your resort as opposed to an arrangement some equate as more akin to a ‘vacation club’, and therefore your maintenance fees will be going towards property you actually have a vested deeded ownership interest in.
#2- The next most significant thing to know before purchasing a timeshare interest
Is that the costs of timeshare ownership are significant and may not be fully understood until after the purchase. In #1 above, we discussed ways in which the cost surrounding the purchase price can be, to a significant extent, controlled, depending on whether the seller is a developer or from the secondary market. However, once you are an owner of a timeshare interest, you legally become liable to pay annual maintenance fees, and they typically go up on an annual basis and usually go up to an extent far exceeding the typical rate of inflation. These charges are not within the owner’s control and will last the entire lifetime of ownership. Lesser known but nearly equally concerning, is the additional fact that additional assessments called ‘capital improvement assessments’ may also add to the expenses the owner is legally responsible for but unable to foresee or control.
That all being said, there are many existing timeshare owners who are currently happy with their interests for several different reasons, including the fact that their vacation time is structured, and can be planned with certainty, allowing owners the ability to include family and friends at a resort with known features and amenities. The other side of that coin, however, is knowing that those now satisfied owners have yet to reach the point in time where their inevitable aging process or future fixed income economic issues have interfered with their ability to use their interest. Attempting to re-market their timeshare interest quickly brings home the point that in the absence of a healthy resale market, they may be at the mercy of a timeshare developer who has excess inventory already in place and may not be inclined to take back the interest, often leaving the owner stuck with ongoing financial obligations for an unusable timeshare interest. Again, maintenance payments last the life of your ownership regardless of whether you can use your timeshare or not.
#3- Based on several of the issues raised above, the third major point to consider
Is whether the prospective timeshare purchaser can or should consider locating an alternative vacation plan that involves no up front purchase costs, no annual financial maintenance fee obligation, and no heartburn or financial loss when it’s time to dispose of their timeshare interest.
The internet has truly transformed the vacation experience into the ability to plan for a vacation with optimum flexibility, no booking hassles, and a cost approximating the timeshare owner’s annual maintenance fee obligation, and then only when utilized! With websites like Travelocity, Booking.com, Expedia.com, Hotels.com, Air B&B, VRBO, etc. along with travel aggregators like Travelzoo, the cost, selection and booking process, have made it comparatively easy for even a person with very modest computer skills to complete the entire reservation process nearly effortlessly, and the price is right!.