Timeshare Resale Pitfalls
The timeshare industry has historically been plagued by resale companies who use misleading sales tactics and charge sizeable fees to resale the timeshare units of frustrated timeshare owners.
Using false and misleading statements of what buyers could expect from their timeshare ownership, the industry has a tarnished reputation which over the years grown ever worse. In 2008, with the collapse of the economy and crash of the stock market, many homeowners found themselves no longer able to afford their homes much less the timeshare that they had purchased in a moment of weakness. Because a timeshare is essentially a lifetime obligation to pay maintenance, taxes and fees it is a liability not an asset, that many people could no longer either afford or want. Faced with the prospect of ever increasing maintenance fees, and desperate to get rid of the so–called “vacation of a lifetime”, many timeshare owners turned to the timeshare resale market in an effort to be relieved of their lifelong obligation to pay ever increasing dues and fees.
Into this vacuum of desperate owners wanting to sell, the timeshare resale industry was born. Armed with false promises of ready buyers, fast sales, big profits and money-back guarantees, fly–by–night scammers proliferated with promises of a quick sale and lots of money for what was now an unwanted timeshare. Timeshare attorneys know that timeshares are not an appreciating asset and there is no ready market for a used timeshare. A simple search on eBay can verify the truth of this statement. By simply entering the search term “timeshare”, hundreds if not thousands of supposedly valuable timeshares will appear for as little as $1.00, some with the seller agreeing to pay all the closing costs.
With the timeshare resale scam running rampant, the Federal Trade Commission and state consumer protection agencies began to shut down dishonest timeshare resellers for bilking timeshare owners out of millions of dollars. The state of Florida quickly passed a state law designed to crack down on this kind of fraud. That law forbids timeshare resellers from making unfounded promises and collecting large upfront fees. The Federal Trade Commission was even more proactive, spearheading a national effort against the timeshare resale scam bringing over 200 actions nationwide against the scammers in 28 states. Many timeshare resale companies claim to have buyers waiting to make a deposit on your week. All they need is a $998.00 deposit from you. They will tell you that it’s refundable. Or the company has a money-back guarantee. I know that you want to believe that pitch, but please don’t. There are not any buyers waiting to get your timeshare. Once the resale company has your money, they have no significant incentive to work for you. And even with guarantees and other promises, they very likely will not refund your fees when you complain.
There are few exceptions to this advice against paying up-front fees. The resale listing person will claim that "for just a nominal fee" ($200-$3000 on average), they will place an ad in a specific timeshare resale publication or online listing service, and expose your timeshare unit for top dollar to a wide audience. With the current economic problems there has been a surge in people trying to get out of their timeshare, and therefore the secondary market is flooded with cheap or even free timeshares. Most timeshare owners purchased it when times were better, and now have come into life changes, or have grown tired of low availability and huge fees, and now need to get rid of their membership. Unfortunately, this created the Timeshare Resale, or shall we say Timeshare Scam market. Because there is an overwhelming number of people who are upset being stuck with their timeshare and desperately want to get rid of it, there are an overwhelming number of fraudulent companies that want to take everything they can get from timeshare owners.
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There are very few honest timeshare resale companies out there, and even though not everyone who is interested in selling your timeshare is out to steal from you, there are quite a few tell-tale signs that a company is not on the up-and-up when it comes to timeshare resale. Some of these include:
They call you and tell you they have a buyer for your timeshare. If you still owe money on your timeshare, there is not a legitimate buyer that wants it.
They ask for money to get you released from your timeshare contract. During the phone call the scammer will try to scare or pressure you into paying them in advance.
They want up front money to list or market your timeshare. If a real estate company doesn’t need the seller to give them money to sell their house, why would a timeshare resale company?
Be concerned if the contact wants to rush you through the process. High pressure tactics such as when you bought the timeshare are common. The scammers don’t want to give you time to think about what you are agreeing to, and they certainly don’t want to give you the time to contact your attorney.
A well-trained scammer specializes in getting you to make a decision in one phone call. They want to get as much information out of you as possible, and never speak with you again. They won’t give you an accurate number to contact them at because they don’t want the authorities being able to find them.
Do your research before choosing a company to sell your timeshare. Selling property is a big decision, timeshares are no different. Take your time and find a company that will get the best deal for you they can and confirm they are a credible company. Check with their state’s Division of Corporation to see how long they have been in business. Search online to see if there are any complaints, reviews or posts about them. The more research you do, the less chance you have of getting scammed out of your money or property.
Ideally, talk to a timeshare attorney. Many of them offer free consultations. Take advantage of their generosity and find out what your rights and responsibilities are. If there is any way to get out of your contract, whether it is through using the option known as timeshare property cancellation or selling your property, they will know.
If you are a timeshare owner who is no longer interested in the ever increasing fees, lack of availability and high pressure sales pitches to “upgrade”, avoid the timeshare resales scam at all costs. Timeshare owners should question any offers to help them resell the resort unit. If you are thinking of selling a timeshare look first at what is out there on the market. Listen carefully for the promise of lots of money quickly and a request for an upfront fee. Those are two signs of a timeshare resale scam.
The California Bureau of Real Estate warns: “The fraudsters use the names of companies (some of which have professional-looking but usually phony websites, fancy-sounding titles and addresses, and purport to be escrow, timeshare resale, finance, and/or title service businesses) and individuals in California.”
Attorney Mitchell Reed Sussman provided another warning to timeshare owners who are trying to sell a burdensome timeshare.
"The scams are becoming more and more sophisticated, with ‘timeshare resale companies’ asking for money,” says Sussman. "But remember, if you are selling anything, there's absolutely no reason for you to pay a dime." Sussman, a timeshare exit attorney for over ten years, is receiving more emails and calls than ever from worried timeshare owners hoping to sell their timeshares.
"Beware of any company that asks you for money to sell your timeshare. You’re the seller. You’re supposed to receive the money."
Sussman has been an advocate for timeshare owners who have been duped by a billion-dollar industry that often does nothing more than ‘presell a lifetime of vacations at inflated prices.’
"They wrap up the presentation pitch with a big bow to make it look like they’re selling real estate. But if it’s real estate, then why is almost impossible for a lay person to resell?."
"If these timeshares have value, why can’t my clients to get rid of them without engaging in same type of fraud that the developer had to use in the first instance to sell them?" he asks.
And now, according to Sussman, timeshare owners who are unable to use their timeshares either due to age or illness are being taken advantage of by ‘resale agents’ who ask for upfront money from the seller.
"I’m receiving more and more emails from people across the country complaining that they’re being told they have to pay money to a company or a broker in order to sell their timeshare. I tell them that’s a sure sign it’s a scam.”
As with all purchases, the standard Latin warning, Caveat Emptor or Let the Buyer Beware, applies. Now, however, it appears Sussman is warning sellers to beware. "If you’re selling, you don’t pay. Period."
Remember this, once purchased a timeshare is very, very hard and almost impossible to sell. So, if you are looking to be relieved of your timeshare and its lifelong financial obligations, find an attorney who specializes in this field to assist you. At the law offices of Mitchell Reed Sussman & Associates, our timeshare attorneys have helped thousands of timeshare owners who want to be released from their timeshare.
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