A reader can't afford to keep her timeshare, but she can't afford to sell it, either.
Question: I have a timeshare with interest rate over 14 percent. I can’t sell it for anywhere near the balance I owe. But I cannot keep up with payments and maintenance fees, either. What can I do?
— Bernadette in New Jersey
Howard Dvorkin CPA answers…
Timeshares should be called “debt shares,” because that’s essentially what they are. You buy a vacation home and share the cost with many other owners, and you each have a set amount of time to enjoy the property.
That sounds good in theory. You spend one week per year in a vacation home you couldn’t otherwise afford, and it’s not sitting empty when you’re back home.
In reality, timeshares cost much more than the initial cash outlay. Bernadette references “maintenance fees,” and they can be hefty. That’s on top of the mortgage and property taxes, so it’s not uncommon for buyer’s remorse to set in quickly. Fortunately, selling a timeshare is much harder than buying one. Let’s break it down for Bernadette and others who are suffering in these trying timeshares…
Watch out for “re-sellers”
The easiest way to sell a timeshare is also one of the costliest. An entire business model has sprung up around helping desperate timeshare owners sell their obligations. Fortunately, the FBI has been investigating unscrupulous operators for years now.
How do you tell the fair from the frauds? The Federal Trade Commission suggests you do the following…
- Check the Better Business Bureau in your state to see if the re-seller has been reviewed or rated.
- “Ask if the reseller’s agents are licensed to sell real estate where the timeshare is located. If so, verify it with the state real estate commission.”
- Ask about the re-sellers fees. Does he get paid after the sale? In advance? Flat fee or percentage?
- Review any contract carefully to make sure it explicitly lists what the re-seller will do for you, and what he won’t.
If a re-seller promises you’ll recoup all your money, walk away. That almost never happens.
List it yourself
Timeshare owners have taken matters into their own hands. Check out these sites for selling on your own…
However, I must tell you: Don’t expect many offers. It’s simply not a seller’s market. Still, it takes only one interested customer to unload your timeshare, so it’s worth exploring.
Rent instead of sell
Some timeshare owners aggressively advertise their weeks, while others rely on friends and family. Either way, if you can bring in enough money to cover your expenses, you’re literally buying time until you can unload your timeshare.
If none of these options work, Bernadette, I suggest you call Debt.com for a free debt analysis at 1-800-810-0989. Our certified credit counselors can’t help you sell a timeshare, but they may be able to help you find the money — especially if you have other debts weighing you down.
Have a debt question?
Email your question to email@example.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.