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Getting out of timeshare - a bumpy ride through the secondary market
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Steven Ham of Fremont, California, owned a studio unit at Paradise Village in Nueva Vallarta, Mexico. It is a beautiful resort, and his family has enjoyed a number of vacations there through the years.
However, there comes the time when they are no longer going there, and they aren’t exchanging it to visit other resorts, either. So they looked to sell. According to Larry Hayden, president of Timeshare Resales Worldwide, “20% of timeshare owners are looking to sell”, at any given time.
Fortunately for Steven, what should show up in his email – a company offering to sell his timeshare. Based in Daytona, the company indicated that with the upcoming Daytona 500, they anticipated a huge demand and marketing opportunity for properties like his.
There’s the bait. The hook? They needed $699 to prepare the advertising and marketing kit, and they needed it quickly.
Hayden refers to these as “postcard companies”, soliciting owners of timeshares, offering to sell their properties for “top dollar”. They then indicate that the selling owner needs to pay an upfront fee – usually 5-7 hundred dollars. They will indicate the money is to create a web page for the property, or an appraisal, or marketing brochure, or any number of other plausible sounding scams.
Though he classifies them all as “postcard companies” the solicitation could come via telephone, US Mail, or email, as occurred with Steven. In addition to soliciting $700 for doing little if anything, many of these companies are not even licensed real estate companies.
It gets worse than that – many of these sleazy firms, once they get one payment; they go after the unsuspecting sellers for even more money. “They have a buyer, and the only thing the buyer asks, is that you pay the $400 in closing costs”.
And of course, the deal falls through after you’ve paid the additional funds. Good luck getting a refund.
And it gets worse, according to Steven. The Daytona company is not the first company he sent money to, attempting to sell his timeshare. A belated search of one of the 800 numbers he had for the company selling his Paradise Village unit revealed the same number was in use by several different companies operating under different names. He had been solicited by several of them – each with slightly different pitches.
“I am prepared to kiss my $699 goodbye but I don't want this happening to others who faithfully trust them to sell their timeshare only to be taken for a ride.”, writes Steven.
Selling timeshare on the secondary market has been an issue almost since the beginning of the industry back in the 70’s. It’s registered and sold as real estate in every state, very carefully regulated. Most first time purchasers learn about timeshare at a developers sales presentation, where they are invited by phone, mail, or while on vacation. They rarely go with the intent to purchase, even when they know that timeshare is what is being sold.
Most go to the presentation lured by the promise of a free trip, the opportunity to win a car, or any number of inducements we will discuss in future columns.
