Smart SpendingSmart Spending

Buying or selling a time-share? Read this first

How is a time-share like a marriage? They're both easier to get into than out of.

By Stacy Johnson Mar 11, 2010 8:44AM

This post comes from Stacy Johnson at partner site Money Talks News.


I’ve never owned a new car because I can’t stand the thought of buying something that’s going to drop in value by thousands of dollars the instant I own it. 


But from what I learned while researching this story, buying a new car could be a smart purchase compared with a time-share. Why? Because time-shares can depreciate even faster. 


This story started with an e-mail from a viewer. Here’s the gist: “I’m trying to get rid of my time-share. The only help I see is those places that want to charge me hundreds of dollars just to list it. We’re barely making our home mortgage payments now. Can you help?”

To see how I answered this question, check out the following TV news story called "4 tips to sell a time-share fast." Then meet me on the other side for more.


While that story was about how to sell a time-share, if you're  considering a time-share purchase, you should also be interested. Why? Because when you visit some of the sites that list time-shares and see how much they're selling for versus the original cost of that timeshare or something similar, you might change your mind. And even if you don't, these sites might convince you to bypass the time-share developer “showroom” and markup by buying one pre-owned from a private party.   


For additional information, read this story about selling time-shares from the Timeshare Users Group. It’s got a lot of great information, including something they put in bold and in red: "Never pay an up-front fee in an effort to sell your Timeshare!" It also tells you how to market your time-share, what to do if you owe more on your time-share than it’s worth, and how to transfer the title when you find a buyer. Another place for information on selling time-shares is eBay’s guide to time-share sales. Both articles should prove interesting to prospective buyers too, since you’ll want to know what an exit strategy might look like.


One of the things you saw emphasized in my news story, and you’ll also find in honest articles about selling time-shares, is that you really need to approach a sale with low expectations. Many time-shares don’t have much of an active aftermarket, which means there aren’t a lot of buyers. Fewer buyers translates into lower values. So if you’re a seller and borrowed most of the money to buy your time-share, you might have to pay off part or all of your loan to get out of it -- not a pretty picture. That should also tell potential buyers something: This isn’t a purchase you’d want to finance, especially if there’s any chance you may have to sell down the road.

According to the Timeshare Users Group, here are some sites where you can sell or buy time-shares without a big upfront fee:
What I took away from this story -- and what you should too: The more I researched the whole idea of selling time-shares, the more leery I personally became of the whole concept. Sure, it sounds cool to own an annual week in a fancy seaside or mountain resort. But after paying thousands upfront, you also often have to pay major annual fees whether you use it or not. Then, there’s the problem I uncovered in this story: Selling your time-share, at least for what you paid for it, could be tough, even impossible.


But that’s not all. When I set out to shoot this story, the first thing I did was attempt to find a time-share reseller who would talk to me on camera. That shouldn’t have been difficult since I live in Fort Lauderdale, Fla. But despite hours of phone calls, I couldn’t.


I found one guy who advertised himself as a pre-owned-time-share specialist, but when I called him, he said he no longer did it, nor would he even talk about it on TV. What he told me, however, was that he couldn’t make a living selling pre-owned time-shares because most weren’t worth enough to provide him with a large enough commission. Then he bent my ear for nearly an hour berating the people who developed and sold time-share properties, the state laws that allowed unsuspecting consumers to be hoodwinked by high-pressure salesmen into radically overpaying for them, and even Web sites promising to market your time-share only after receiving hundreds of dollars in upfront fees.


The only other person I was able to speak with was the owner of one of the Web sites the former salesman was talking about -- one that charges a $300 upfront marketing fee. This guy also wouldn’t talk on camera. When I asked him why, he said he didn’t trust the media to tell a positive story (go figure) and that he couldn’t really defend sites like his anyway because they don’t work. In other words, a man who makes his living charging people to list their time-shares on his site admitted to a reporter that very few of his customers actually sell them that way. 


In case you’re not familiar with consumer news reporting, let me tell you: These are not good signs. When business owners in any industry are unwilling to talk about their businesses on camera, those are ones I wouldn't want to approach as a consumer. 


Bottom line? While some buildings, locations and time slots will prove more marketable than others, time-shares are a lot easier to buy than sell.


I'll stop short of saying you should never buy a new time- share because the world is a big place, people's appetites vary widely and there are always exceptions to every rule. In fact, I'm sure there are timeshares that have gone up in value. But personally, if I ever decide to buy a time-share, I’ll make sure I never intend to sell it and I won’t expect much if I do. I certainly won't finance it, and I will try to buy it pre-owned from a Web site like those above rather than paying top dollar to a developer.


Related reading at Money Talks News:



Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.