If you are dreaming of a steady place to vacation, don’t let your timeshare purchase become a nightmare. Consider the following information before you commit to buying or reselling a timeshare.
Purchasing a timeshare. Just like any other real estate transaction, purchasing a timeshare is a big investment. Similar to buying a home, the wise consumer should take a measured approach before they commit. Although vacation real estate timeshares are often touted for their investment potential, consumers’ experience with the industry do not always tend to support that claim.
Consider the following before purchasing a timeshare:
- Unlike hotel rooms, vacation timeshares come with added cost, such as mortgage payments, travel expenses, maintenance fees (which undoubtedly increase), taxes, broker commissions and finance charges.
- If the property is located in another country, you will not have the same consumer protections afforded under U.S. law.
- Use an escrow account if purchasing undeveloped property, and get a written statement that the facilities will be finished as promised.
- If the property is already developed, visit and inspect it thoroughly.
- Examine all documents related to a sale before you sign them, and ask an attorney to explain any terms you don’t readily understand.
- As with any other contract, know your cancellation rights before you sign. If a right of rescission (also known as a “cooling off period” during which the buyer can receive a refund if they change their mind about making the purchase) is not among the contract terms, ask that they be included in the agreement.
- Do not act under impulse or pressure. You have the right to get all promises and representations in writing.
Timeshare resale scams. Beware of anyone who approaches you offering to resell your timeshare. Timeshare reselling scams have intensified in recent years, and scam artists who pose as timeshare resellers often deceive consumers out of thousands of dollars through false promises and upfront fees. Resellers identify timeshare owners through public records or lists bought and sold from resort developers and then contact the owners by phone or letter.
If the owner expresses interest in selling — and many do because they no longer regularly use the unit, can't pay rising maintenance fees or simply need the money from the sale — scammers claim they have a buyer. The company tells the seller they need to pay several thousand dollars to cover fees, and after paying up, the seller never hears from the company again.
In addition to nonexistent buyers and upfront fees, scamming resellers often promise a hefty sale price. But in reality, one-week time-shares that may have sold for $20,000 new a few years ago now fetch as little as a few thousand dollars on the resale market, depending on market conditions.
- Always check a reseller's reputation with Be InfORmed, DOJ’s online consumer complaint database.
- An unsolicited inbound call (cold call) to your home from someone you don’t know is never a good way to start a business relationship. These companies will often use very shady tactics, have no physical address, hold no license to do business in any state, etc.
- Confirm licensing claims with the Oregon Real Estate Agency
- Never assume they will recoup their purchase price for their timeshare, especially if they have owned it for less than five years and the location is less than well-known
To confirm that a reseller of timeshares holds a real estate license, contact the Oregon Real Estate Agency at (503) 378-4170.
If you believe you have been victimized by a timeshare resell scam, please complete a Consumer Complaint Form or call 1-877-877-9392.
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