Timeshares are offered up as vacation properties that shared owners can utilize for a specific time period throughout the year. Unlike traditional real estate purchases, timeshare properties are owned by many people and access to the property is divided up throughout the year. With timeshares, you ‘share’ the property use.
Some timeshare buyers are introduced to these properties through special presentations. Timeshare sellers may offer up free vacation weekends in popular resort areas to encourage prospective buyers to invest in the timeshare.
Unfortunately, some buyers may not read all the fine print of these opportunities when they close the deal on their new vacation property. If you’ve invested in a timeshare property and just want to move on from the deal, here’s how to get out of a timeshare.
How to Sell a Timeshare
As with all major purchases, it’s important to note that buyers should absolutely read the entire contract before committing their financial resources. Timeshares have gotten a bad reputation over the years, but these real estate properties aren’t all good or bad. Some sellers are unscrupulous, but others are honest and upfront.
Dave Ramsey is quick to point out that timeshares aren’t an investment, though, and buyers must understand this important element of the timeshare deal. Investments can be sold for a profit, as they can increase value over time. According to Ramsey, timeshares never increase in value, and, in fact, he notes that timeshares “actually go down in value worse than new cars do.”
The point? Don’t expect to come out on top when you sell that timeshare. But when you’re ready to sell, you may have some options. First, though, Ramsey advises that owners should review their contract, as this helps you understand the amenities and other offerings.
So how do you sell that property? Selling can be complicated, because of the nature of the timeshare.
How to Sell a Timeshare with a Mortgage
Most homeowners have mortgages on their homes. This is pretty standard practice, and, unless you’re underwater, holding a mortgage isn’t a huge deal when you’re trying to sell a home. Many homes still have mortgage balances but sell for more than the balance, leaving the seller with a profit.
Timeshares don’t work the same way. Remember, they don’t typically gain value over time. And timeshares with mortgages are not desirable properties. Ramsey states that if you have a mortgage, the timeshare is known as “encumbered” and this makes the property “almost impossible to sell.”
No Mortgage? You May Be in Luck!
If that timeshare is not locked down with a mortgage, you may have options. However, you need to be careful in who you choose to help you sell the property. USA Today warns possible sellers to beware of companies that promise to sell your timeshare—especially if they make contact with you randomly. Timeshare scams abound, and you do not want to be a victim of one!
However, there are many legitimate companies that can help you sell your timeshare. Redweek is a great online site for those wishing to list their timeshare. The site is a ‘for sale by owner’ option, and, yes, it’s legitimate.
REALTORS® could also help you sell your timeshare. Ramsey advises that you need to look for the right agent, and he notes that this isn’t the time to use your friend or neighbor for the job. Instead, he advises prospective sellers to find an agent that has experience in selling timeshares.
An experienced REALTOR® who knows the ins and outs of timeshare selling will also be the best to advise you along the sales journey. There could be complications, so you need someone in your corner that can help you.
Are Timeshares a Worthwhile Investment?
Talking about selling a timeshare may leave those considering the opportunity with questions about the future of that deal. Again, timeshares are not an investment, and anyone who enters a timeshare should not expect to reap a profit when they list their timeshare for sale.
A timeshare should be considered a continuing expense, like a car, because, ultimately, this is the nature of the timeshare. You are getting a place to vacation once a year without having to book reservations or worry about availability. The benefit of the timeshare is vacation convenience, but, like your car, you will pay for that convenience for many years.
When considering a timeshare, you absolutely must read the entire contract. Ask yourself the following questions:
- Can I afford the payments over the long-term?
- Can I afford the HOA fees and other expenses?
- Do I need to take a mortgage for the timeshare?
- Will I use the timeshare each year? Is there a benefit?
- Am I feeling pressured to buy the timeshare?
When you’re sitting in a timeshare seminar, the amenities of the resort may sound so appealing. You may picture your family vacationing at the resort and making lasting memories. And, yes, you may have a wonderful vacation time and create lasting memories. However, you need to understand the financial obligations of the timeshare agreement.
Unfortunately, many buyers are lured by the amenities and fail to understand the full financial issues associated with owning a timeshare. Before you enter into any timeshare agreement, take time to look over the terms. Don’t sign any contract in haste, and, if you feel pressured, walk away. Ultimately, this is a decision that will impact your finances (including your monthly budget!), and that timeshare may be difficult to sell down the road.
If you can afford the timeshare outright, and the terms are reasonable (don’t hesitate to have a third party review!), the property may be a good vacation destination for your family. Some timeshare owners get great value from the property and have no regrets. Others are left miserable and regret signing the contract. As with all real estate deals, ask questions, read the contract, have someone review the terms and only say ‘yes’ to the deal if it works for your family, your lifestyle, and, most importantly your finances.