Below is a list of questions to ask a timeshare resale company if you’re going to sell your timeshare.  Pay attention to how they answer and their willingness to answer your questions.  Legitimate companies have nothing to hide while timeshare resale companies just after listing fees will dance around many of these questions.  If you have doubts find another company and always remember, never, never pay a timeshare resale company money upfront.

 Questions to ask timeshare resale companies

1. How many sales a week do you do?
2. How are you going to market my resort?  Will you send me that in writing?
3. Have you ever re-sold my timeshare resort before?
4. Are you registered with the BBB and ARDA?
5. Are you a licensed real estate broker?
6. What do you think it’s worth?
7. How long will it take to sell if I price it competitively?
8. Are there any upfront fees?  Why?
9. Do you advertise or just rely on the people finding it on the Internet?
10. Where do you advertise and how much a week do you spend?
11. What is your commission?  Is it negotiable?
12. Will your commission be handled in escrow?
13. Who handles the closing?
14. What will I net after all is said and done?
15. Can I list with you and several other agencies?

Mistake 9: Selling out of desperation

Unethical timeshare resale companies know that there are a lot of desperate people wanting to unload their timeshare and they are very aggressive about contacting them.  If you have a deed to your timeshare then it’s public knowledge and on record at the county courthouse.  Scammers access the courthouse records to make lists of timeshare owners and sell the lists to timeshare resale companies. 

If you’ve owned your timeshare for any length of time you’ve probably already received an unsolicited letter or phone call from a timeshare resale company.  This is usually the sure sign that someone’s out to scam you out of a listing fee.  The phone solicitors can be particularly persuavsive in convincing you that they will sell your timeshare quickly and for a tidy profit.  Coincidently, they have a hot buyer who just so happens to want what you have and you’d better move fast before he buys from someone else.  They’ll then suggest you list it over the phone and pay the listing fee so they can call the prospect with the good news.

The rest of the story goes like this.  You never hear back from the agent nor can you reach him at the office.  You’ve left many messages for him but he won’t return your calls.  If you complain to someone they may tell you he no longer works there but not to worry because your timeshare is listed and will continue to be listed until sold. 

Never go for the quick sale no matter how persuasive the agent is.  If it sounds too good to be true, it is.  Make sure you check out the company and remember that it’s going to take a while to sell your timeshare.

Mistake 10: Misinterpreting the companies website or claims
 
Don’t interpret a resale company’s claim, either verbal or on their website, that they have year to date, $20,467,000 of resale and rental offers to mean SALES.  This is common practice today and very deceptive.  What you want to know is how much of that $20,467,000 has been sold? Prying that information out of the timeshare resale company is difficult and take with a grain of salt what you’re quoted.  Write it down and call back the next day and see if the quote is similar before listing your timeshare.  If the actual amount sold is only a small portion of the total look elsewhere.  Whatever you’re told, ask for it in writing or email.  Their willingness or unwillingness to do that speaks volumes of their credibility.

Monday’s post will be a list of questions to ask timeshare resale companies to determine if they are legitimate.

Mistake 7: Not knowing what you own

Whether you’re selling your timeshare through a timeshare resale company or on your own, get clear in your mind exactly what it is that you own.  Go over the documents you got when you purchased and call the resort’s Owner Services department for further clarification. 

Do you own a  studio, 1 bedroom or 2 bedroom?  Is it a lock-off?  Is your resort affiliated with RCI or Interval International? Do you have a deed or is it a right to use?  Do you have a fixed or floating week?  If it floats can you reserve it for any one of the 52 weeks in the year or are certain dates like Christmas, New Years, Easter and Fourth of July blacked out?

You wouldn’t want to find an interested buyer and find out that your floating Red week is only good in the summer.  Or, that the Home Owner’s Association fee is $751 rather than $610.  That will kill a sale faster than anything. 

If you’re listing with a timeshare resale company and it doesn’t have a good description of your resort, the on-site amenities, nearby attractions and why someone would want to own there, make them get one.  The operative word when selling your timeshare is “selling” your timeshare.  I’ve seen many a timeshare resale company with multiple listings for the same resort, use the exact same verbiage to describe the resort in each listing.  Think up some selling points on your own.  You want your listing to stand out from all of the other ones.

Mistake 8: Buying into the timeshare resale companies guarantee

Many timeshare resale companies guarantee that you’re timeshare will be listed for as long as it takes to sell for no additional charge.  Many sellers misunderstand this to mean that the resale company is guaranteeing the sale.  Big difference! This is one of the ploys disreputable timeshare resale companies use to get you to list with them.  Since they’re paying very little if any fees for advertising YOUR timeshare, it’s easy to guarantee the listing will never expire. You’re likely to hear this from timeshare resale companies that are mainly interested in collecting up front fees than actually selling your timeshare.

Mistake 5:  Signing an exclusive listing with one timeshare resale company

Never give an exclusive listing to one timeshare resale company to sell your timeshare.  An exclusive listing means the company will be paid their commission, typically 10%, no matter who sells it.  Even if you sell it to your neighbor or co-worker you will owe the listing company their 10% commission.  And it effectively prevents you from listing it with multiple other resale comapanies since they wouldn’t get paid if they did sell it.

Always sign an “open listing” giving you or anyone else the right to sell your timeshare.  This means you will only pay the listing company a commission if they sell it.  If you can find more than one reputable resale company then sign an open listing with all of them.

Mistake 6:  Not checking with your home resort

See if the developer of your resort will buy it back.  It’s rare but worth a shot.  Also, check to see if there is still an onsite salesperson that handles re-sales.  It’s easier to sell it to someone onsite than to someone that just sees it on their computer screen.  Finally, if the first to suggestions aren’t available see if there is an onsite bulletin board where you can hang a flyer.  I would advise against putting an add in the local paper.  It’s too expensive and not effective.

Mistake 3:  Not checking out the company’s credentials

Finding a well-established timeshare resale company that doesn’t charge an upfront fee will be your biggest challenge.  The best companies will not only be listed with the Better Business Bureau, but also should have a Real Estate Broker license.  You can check out a company with the BBB by going to it main page at www.bbb.org, entering the zip code of the resale company’s location to get to the local BBB chapter.  You can then enter either the phone number, address or name of the company to see if there has been any complaints, how they were resolved and what rating BBB gives them. 

Find out if the company is a member of the American Resort Development Association, ARDA, the respected trade organization that expects its members to abide by a set of ethical guidelines when selling timeshares.

You can also check with the Department of Real Estate where the company is located to see if is a licensed Real Estate Broker.

You now have three very powerful agencies to report to if you do have a legitimate complaint.

Mistake 4:  Trying to sell your timeshare before it’s paid off

Depending on how much money you owe on your timeshare, you may not be able to sell it.  If you still owe $10,000 on your timeshare and it will only sell for $3,000 you’d have to pay off the $10,000 first. Most likely the mortgage note you signed promising to pay is non transferable.  The disreputable resale companies, after finding out you still owe $10,000, on your timeshare will tell you they will list it for $15,000 just to get a listing fee.  And there it will sit never to be sold.

Mistake 1:  Paying upfront fees

If a resale company asks you to pay any fee upfront to market your timeshare, don’t walk, but run away.  This is the sure sign of a rip-off.  The fee quoted can be anywhere from $200-$1,500 depending how desperate and vulnerable the listing agent feels you are.  They’ll tell you the money is to be used for a listing, appraisal or advertising fee.  Some really disreputable companies will tell you they just so happen to already have a buyer and just need $500 to open escrow.

Regardless of the story given as to why you have to pay money upfront, companies that charge upfront fees are far more interested in collecting fees than selling your timeshare.  The most these companies do to actually sell your timeshare is to put it on their website along with hundreds of others.  There it will sit and sit and your calls will not be returned. 

Do not listen to how they advertise in the New York Times or USA Today or how much they spend on web exposure.  If they’re asking for money up front it’s a scam. Many of them will tell you they will sell your $15,000 timeshare for $25,000 just to get your listing fee.

A sure sign of a reputable timeshare resale company is that, other than a nominal fee of $50-100, they will take their typical 10% commission at close of escrow just like in the regular real estate market.

Mistake 2:  Listing your timeshare too high

Most timeshares sell, when they do sell, for only 10-40% of your original purchase price.  As mentioned before, this is because of original marketing costs and the vast supply of weeks for sale. 

You must research what your or comparable resorts are selling for on the Internet. Look first to your resale company’s listing for comparable properties but don’t stop there. Take some time and look at some of the thousands of other resale sites as well.  You will find a great disparity in prices for exactly the same timeshare.  I’ve seen the exact same week listed for $1,500 on one site and $15,000 on another.  The company that had it listed for $15,000 was most likely a rip off and told the owner it could be sold for that just to collect the upfront fee.

Most importantly, if the company you are going to use has your exact same timeshare for sale, which is not unusual, for $2,500 you should obviously price yours below that. You’ll need to check back periodically to see if someone else has undercut your price and adjust accordingly.

You have already spent thousands of dollars purchasing your timeshare.  Don’t throw even more of your hard earned money by making 3 of the biggest mistakes when you go to sell it. Since you found your way to this report, you’re probably selling your timeshare
because you’re now unhappy with it.  Unfortunately, you’re probably going to be disappointed in your return of investment as well. 

The timeshare re-sale, or secondary market, is young and not only flooded with people desperate to sell, but also with extremely unethical re-sale companies that prey upon them.

 Selling a timeshare can be extremely difficult, and in some cases, impossible.  The FTC has cited a survey that found only 3.3 percent of owners reported successfully reselling their timeshares for a price they were happy with during the last 20 years. Many timeshare resale firms claim consumers can save 50 percent to 90 percent off retail prices. Therefore, buying a secondhand timeshare from an individual
owner can be a bargain but selling a timeshare is a losing proposition. 

“Consumer Reports” July 2003

What Makes Selling A Timeshare So Difficult?

The two things that make the re-selling of a timeshare so difficult are that the supply of available resale weeks greatly outweighs demand, and the fact that nearly 50% of the price of a timeshare purchased from the developer went into the marketing costs.  Simply put, if you paid $15,000 for a timeshare, $7,500 of the purchase price was for marketing.  Because the market is flooded with re-sales, you’d be lucky to get $3,000 on the secondary market.  After commissions and closing costs $2,000 is a more realistic number.  You can expect a little more if you own a brand named timeshare like Marriott, Hyatt, Hilton or Westin/Starwood and less if you own a really bad one.

The next 3 posts will shed light on 3 common mistakes that many people make when selling their timeshare that can cost them thousands of dollars.  If you contemplating selling your timeshare don’t miss the rest of this series.  The timeshare resale industry is rife with unethical resale companies that will tell you anything to get into your pockets so you need to be informed.  Learn how to distinguish between a legitimate and unethical timeshare resale company.