Are you trying to sell your timeshare? If you have fallen into this money trap you will want to read this post. If you are interested in buying a timeshare and want to know all the pitfalls and money traps you will want to read this post as well.
Today’s post is all about financial money traps and in particular my personal biggest money trap that I’ve recently been through, timeshares and how to get out of them. Then in the next post I’m going to talk about some of the smaller money traps I’ve faced and how to avoid them.
I was going to do just one article on all the money traps I’ve fallen into but felt this particular subject on timeshare needed it’s own space.
Why Are Timeshares Are A Bad Buy
With all the money I’ve invested into my timeshare and the little return I got back from it this has been my biggest stumbling block ever. Personally though I am the only one to blame for the situation I am in. I made the decision to buy it and as a result of poor education on the subject I paid the price, almost $7000.
Believe me though when I tell you sales reps for timeshares will literally tell you anything to get you to buy a timeshare. In fact when I bought mine they took me out to lunch for a free meal and even gave a free trip to the virgin islands just for taking a look. This may be the only good thing about the whole process. However they’re a few things that you need to realize.
- Timeshares aren’t an investment. When I bought my timeshare are sales rep informed us that it will grow in value as time goes on and you can sell it for more. This is totally false. Timeshares do not grow in value. They are no more than just a time slot which you own at a resort not the actual real estate itself.
- Timeshares are very hard to sell. If you wanted to sell your house you could put a for sale sign in the front yard but with a timeshare in say ARUBA, how would you sell it?
- Timeshare loans have high interest rates. If you aren’t buying your timeshare straight up then you will have to take a loan on it. My timeshare had a 16% interest rate on it. You can bet I paid it off quickly.
- Timeshare exchanges are expensive. To exchange your timeshare to another resort destination say Hawaii you will have to pay what is known as an exchange fee for around $100 to go to a different resort.
- You have to pay for the maintenance at your timeshare. This can be costly when owning a timeshare. Even when you have the timeshare paid completely off you still have to deal with maintenance fees. Mine was over $600 every two years and that’s not all. They usually increase it by 10% a year.
- You have to pay for timeshare membership fees. Finally, once you do have a timeshare you have to pay membership fees to a timeshare network in order to use your timeshare or exchange it to go some place else. These fees can usually range for about a few hundred dollars just to be a member.
As you can see even if you do buy a timeshare and own it free and clear it will still cost you. Now am I saying all timeshares are bad. No, I’m saying that timeshares have a lot of pitfalls that someone with no education on the subject can fall into a bad money trap like I did. So how do you go about getting out of this money trap?
4 Ways To Sell Your Timeshare
When you are going about trying to sell your timeshare there are good ways to do it and some terrible and expensive pitfalls to watch out for. Below are 4 ways to sell a timeshare, and only 3 of the 4 are recommended ways to do so.
- Listing Services. I don’t recommend this option. A timeshare listing service is usually an online service where you pay them an up front fee of usually around $600 to list your timeshare with them. Trust me when I tell you these services don’t work. I have spent nearly $1200 with these services thinking they would send me some prospective buyers and I got zero offers form both companies I listed with. Though if you or someone you know has had luck with these services let me know and leave a comment below.
- Timeshare broker. I’m not sure if this is a viable option but this would be like hiring a real estate agent to sell your property for you. The reason why this would be better than going through a listing service is because the broker only gets paid unless they sell the property but do know that the broker will get paid a portion of the money you make when you sell the timeshare. If you have more information about this option leave a comment below and let us know.
- Sell it yourself. With websites like eBay out there selling your timeshare, this may be a great option if you would like to do it yourself. Though you should know you may or may not get the price you want out of it and if you do sell it yourself your timeshare could force you to pay a title transfer fee around $150 or more and the next years maintenance fees.
- The Buyback option. If you can’t find a buyer and just want to cut your ties with the timeshare call your timeshare and see if they have a buy back option. Though you should know that you will only get about 10 cents on the dollar back out of it but at least it will be out of your hands. The timeshare may also make you pay the next years maintenance fees as well.
Did the above information help? I hope it did. I know how much pain this has caused me and hope I can inform others so they don’t fall into this terrible trap.
Do you have a timeshare? Are you considering buying one? If you are leave a comment tell me about your situation. Is it a money trap or do you like it?
Freatured in The Carnival Of Personal Finance #184: From The Land Down Under
If you like this post also read this post on Timeshare Resale Scams.
A great post on timeshares which every first time buyer should read. I am glad I didn’t buy one a few years ago when I had the opportunity.
Your blog is very nice.
Thank you.
ER46Ce Thanks for good post
I wish I would have read your articles before I purchased my timeshare a couple of years ago!!!! I have been mislead and pressured into buying a timeshare that is not worth the money. I am still searching to find ways to get out of my timeshare. Keep educating consumers, we need someone on our side!!!
This article is a great starting point for anyone looking into timeshare. One important thing I have learned after years of being involved with timeshares is that if it seems too good to be true, it probably is. Timeshares are not a good investment, and people should never be lead to believe that they are. Check out http://rcivip.com/2008/top-5-timeshare-lies/ for a countdown of the top 5 Timeshare Lies salespeople will tell you in order to get you to buy.
RCI,
Great comment. Knowing more about timeshares is very important. I also checked out your post above and it’s a good add on to what I’ve written. Timeshares are very high pressure and they don’t care who gets burned. I just hope people can learn from the mistakes I’ve made so they don’t loose thousands of dollars as well.
All the Timeshares are a scam and very hard to get out of. There is one place that might be able to help. THE OWNERS
ADVOCATE CALL 1-866-644-7776 IF YOU CAN TALK TO KATE, SHE IS GREAT TO WORK WITH. TELL HER TIM REFERED HER..check out their web http://www.theownersadvocate.com
this is a must see site, I just lost most of my work, being selfemployed and I’am trying to get out of a timeshare my self before I lose everything. hope this helps, let me know if it does
Hi, gr8 post thanks for posting. Information is useful!
How soon will you update your blog? I’m interested in reading some more information on this issue.
Gary,
What more would you like to know about timeshares and the mess that they cause? I’ve certainly had a lot of issues with them and would not like to see others get scammed the same way I did.
Katty,
Anything I can do to help just send me a comment or an email. I pride myself in helping others not get scammed out of their hard earned money like I did.
How soon will you update your blog? I’m interested in reading some more information on this issue.
I recently wrote an article on timeshare resale scams check that out here. http://stumbleforward.com/2009/06/29/why-timeshare-resale-scams-dont-deliver-and-how-you-can-do-it-yourself/
I em sick of my time share trap. I have lost over $7,000 to many scams. 6 co,s I em done loosing my money to these jerks. I think the gov, should stop these time share rip off artists, with the they care so much to help you sell your time share. And get back your moneys lost to other time share rip offs. Just pay a fee…. and they have a buyer right now, crap and tell you the peoples names who are buying yours. And you will have your money in your bank, set a date, and total crazy profit Like 3 times over your cost. And rent money too. What a fool I have been. I will bug all of them back, and say give me my money back, or I will get a class action on them started, to help get these rip offs in jail. How can there be so darn many scams. I may try the buy back thing. or just pay the fees, and place adds in the paper for rent, to get my money back, and pay the fees with till my time is up on the place. 8 more years.
wayne
We can’t afford ours my husband got laid off we don’t know what to do we won’t out really bad
I think this is actually quite a good post. The title makes it sound like you are against timeshares but I respect that you make some very good objective points. I think if people understood better what timeshares are (not a financial investment) they would not have as bad a rap. (I do blame salespeople that sell it as such also). I personally love our timeshare a lot. Even though timeshare properties are so closely related to real estate, it definitely isn’t and if you treat it more like a car that you use up and then can’t sell, then I think people might be a lot happier. ANd a car that you don’t take a loan on (as you said, expensive!). We paid cash so now we pay “maintenance” fees (like you would a car) and we definitely enjoy vacationing at our timeshare as well. So for us it works.
Anyway, great post, I did enjoy reading it.
I’ve been down this road of trying to get out of my timeshare for years. I get one or two flyers in the mail each week offering a way out, only to find they want $1000.00 + to help me give it away. I’m trying to find a legitimate owner who actually transferred their timeshare (I’m not even interested in making a single penny), and the name of the legitimate company who helped them. I know there are transfer fees, recording fees, etc., but how do you even begin. Can someone give me an honest answer that has yielded results?
Victoria: I know exactly where you are coming from. I’ve tried timeshare resale companies and I ended up blowing around $1100 with no results at all. Your best option is to contact the resort and ask them if they have a buy back option. I did this and got $400 back for my timeshare which I orginally paid $4500 for. I know I took a big lose but at least I didn’t have to make a maintance fee ever again. Give that a shot and let me know how that works.
Hi i was a fool not to even know what timeshare was ,we went to one of those stall to ask for some info for kayak and others they talk us out on getting to this 90 mins somesort of tour and took $20 and said we will get the money back after the tour so we went and fall on that crap.Thanks to all of ur blogs i signed on 28th of july 2011 and send the notice of cancellation letter today overnight mailed with return reciept and signature .i know i have only seven days calenday day to cancell.also the copy of first page of contract .question wii this hurt my credit how soon will i get the answer do i have to contact state attorney general for this.