Timeshares--deal or no deal?
Susan Kim, Stephanie Graham
Photo: Video by tmj4.com
Irene Smalls' New York City timeshare has been on the market for nearly a decade. She paid $24,000 to use a room one week a year, but has not come close to breaking even selling it.
"I've been getting these really low ball offers," Irene complains.
We're told that's because so many timeshares are currently for sale. One well known timeshare resale site, redweek.com, says 'For Sale By Owner' listings have increased more than 120% over the past year. Timeshareusersgroup.com has seen the same trend. Brian Rogers works for the group. He explains, "When you have an industry that has far more sellers than buyers it's automatically going to depress the sale price."
Timeshare buyers pay upfront for the rights to use the same hotel, resort or condo year after year. Some say they were led to believe their investment would even increase in value. The reality is very different. In this economy many can no longer afford the required maintenance fees, and they're forced to sell at outrageously low prices.
"You're finding people who have already tried or already discounted their timeshare up to 99% off and in many cases giving it away for free," Rogers explains.
Former Orlando timeshare owner John Chase sold his timeshare for $1. He could no longer afford the resort's annual maintenance fees, and if he didn't pay, it would have affected his credit record.
John Chase is a former timeshare owner. He says, "It was a big relief to sell it even at a dollar."
The American Resort and Development Association says timeshares are not a real estate investment and its value comes from using and enjoying it. Timeshare consultant Lisa Ann Schreier says most timeshares don't increase in value. Instead, you're paying in advance for a place to stay.
"If you have to use the word investment think of it as an investment in your future vacations," Schreiner suggests.
If that sounds like a fit for you and you don't mind the maintenance fees, you can pick up a timeshare for cheap.
Meantime, Irene Smalls is going to hold on to her unit, hoping the market improves.
"My interest is recouping as much of my money as I possibly can," Irene says.
If you're trying to sell a timeshare experts say: Try renting it out. Ask the resort to buy it back or if they have a resale program, try listing it with a real estate broker. Never pay a company who calls you and claims they have a buyer lined up for your unit, and asks you to send them closing costs in advance--that's usually a scam.