Whether you currently own a timeshare or are thinking of selling your timeshare, there are a few things to be aware of. While large developers have created an amazing vacation product for families, there are still some owners in need of a way out of their ownership. Unfortunately, this has introduced timeshare resale scams that victimize owners in need. Make sure you know what to look for when selling your timeshare.
What is a Timeshare Scam?
Timeshare, like any industry, has seen its fair share of bad apples. There are a few common timeshare scams that all owners should be aware of. Luckily, the American Resort Development Association, as well as many news outlets, will report on the latest updates and what you can keep an eye out for. Check with ARDA-ROC for resources, as well as ResponsibleExit.com if you are in the process of selling your ownership.
Common Timeshare Resale Scams
1. Out of the Blue Buyers
Whether you are selling your ownership or not, this common timeshare resale scam is a big red flag. If someone calls you claiming to be from a brokerage or company, they may sound legitimate. However, it is illegal for a resale company to call you unsolicited. A legitimate resale company will never call you out of the blue with an offer if you have not previously reached out to them before, or given permission for them to contact you.
If the agent is making an offer for a “buyer waiting,” and the offer is more than what you originally paid for, this is another red flag. Normally, timeshares do not appreciate in value. This is important to consider if you are selling your timeshare, because you will likely not get back what you originally paid for it.
Finally, many of these out-of-the-blue callers will ask for a large up-front fee, claiming it’s for closing costs or something similar. You should never pay any closing costs or commissions up-front.
2. Cancel Your Timeshare Contract
A daunting concern that is more prevalent today are companies that claim they can cancel your timeshare contract. They can be timeshare cancellation attorneys or companies that promise a money-back guarantee. What could the harm be if it’s coming from a law firm or you can get your money back? Remember to always read the fine print.
Timeshare cancellation companies are a common resale scam that harm thousands of owners. The BBB has a study on timeshare exit companies, going over their fraudulent tactics and owners that are victims.
While you may be promised a money-back guarantee, these have been rarely granted. Many of these contracts include terms that do not qualify refunds if your cancellation is being worked on. Furthermore, it is common that a foreclosure on your ownership is a “successful” cancellation or exit. This will harm your credit and stay on your report forever.
3. “Stop Paying Your Timeshare Maintenance Fees”
A common timeshare resale scam that also comes from cancellation attorneys or exit companies is the advice to stop paying your timeshare maintenance fees. You absolutely should not stop paying these dues, because your ownership will be foreclosed on and it will harm your credit score.
Owners that follow the advice of these companies are told that their attorney or agent is hard at work getting them out of their contract. In reality, these fees are piling up as they aren’t really doing anything!
4. Fake Resale Agents
Unfortunately, timeshare resale scams have become more sophisticated with new technology. If you list your timeshare for sale with a legitimate resale company, a bad apple may reach out and claim they are an employee. This can be tough to spot, but there are some things to look for if this happens to you.
Do you recognize the phone number? Does the email match exactly with other ones you have corresponded with? In some cases, the email can look similar, but with additional letters or characters. If you’re not sure if it is a legitimate employee of the company you are working with, hang up, and call the company back directly to verify. If the person that calls shows any of the red flags we previously mentioned, this should also be a warning sign that something fishy is going on.
The Best Way to Sell a Timeshare
If you are considering getting out of your timeshare, our first recommendation is to contact your resort or developer first. They may have in-house exit solutions that will be safe and efficient. However, if you decide to take the resale route, the best way to sell a timeshare is with a Licensed Real Estate Brokerage. At Fidelity Real Estate, we have Licensed Agents with years of experience in timeshare resales. There are no upfront fees, and we work with trustworthy title companies for an efficient closing process.