If you are looking to sell your timeshare, you need to protect yourself from the many timeshare resale scammers that will try to take advantage of your situation.
In many cases, people end up buying a timeshare after responding to a mailing that promises a cheap travel package or perhaps after going to a presentation just to get a free round of golf. Then, after a few years of making payments and covering the ever-increasing yearly maintenance assessments, they decide they’ve had enough and want to sell the timeshare.
If you have purchased a timeshare and are thinking of selling it, it’s important to learn about how to avoid becoming the victim of a timeshare resale scam. Keep reading to learn more about timeshare scams and tips on how to avoid them.
(Be sure to check out Nolo’s Buying or Selling a Timeshare and Timeshare Foreclosures topic areas where you can find information about selling or donating your timeshare, timeshare foreclosures, options to avoid a timeshare foreclosure, and consequences of a timeshare foreclosure.)
Unfortunately, there is virtually no after-market for timeshares and finding a buyer can be next to impossible. This is where the scammers come in.
Example. Say you bought a timeshare in Miami a few years ago. However, you live in Minnesota and it’s a hassle to get down there every year, plus the kids are almost old enough to go to college, the car is getting kind of old, and there are a few home improvement projects that need to get done. You figure that the money you’re spending on that timeshare could be better spent elsewhere. One day, you get a call out of nowhere from a timeshare reseller who says he has a buyer all lined up for your timeshare. You think to yourself “What perfect timing! This is the answer to my prayers.” Right? Not likely.
In this common scam scenario, there’s a catch. The timeshare reseller promises to hook you up with a buyer, but first you need to pay an upfront fee.
Timeshare scammers often convince owners to pay large upfront fees by saying they have someone ready and willing to buy the property or that the timeshares would be sold in a specified period of time. Once the timeshare owner pays the fees, the scammers either disappear or claim that they were simply offering to advertise the timeshare unit and no buyer ever materializes.
There are legitimate, licensed timeshare resale professionals out there, but it can cost you time and a lot of money if you fall victim to a scammer. Here’s how to protect yourself:
Beware of unsolicited phone calls or mailers that claim to have a buyer lined up for your timeshare who is ready to complete the transaction just as soon as you pay an upfront fee. You should never pay upfront fees based on a promise that there is a buyer waiting to buy your timeshare, particularly if the company requests that you pay only in cash, by wire transfer, or by money order.
A legitimate broker will not cold call you or charge an upfront fee. You’ll sign a contract first, and pay only after your unit is sold. (Any payments you make before services are fully performed would go into an independent trust account until the fee is earned.)
State law may prohibit the timeshare reseller from collecting an upfront fee. Many states, such as Florida and California, have strict laws governing timeshare resales, including restrictions on collecting advance fees. Check your state’s statues to see if there are any restrictions on timeshare resellers before you pay for any services. (To find out how to do your own legal research, see Nolo’s Laws and Legal Research section.)
Do not sign a contract when you first meet with a resale company. Take the documents with you when you leave the meeting so you can spend some time reading the fine print. If certain promises were made about selling the timeshare, make sure those promises are covered in the contract. You may want to review the contract and documents with an attorney.
If the resale company wants to do the entire transaction over the phone and is unwilling to meet you in person or provide a physical business office address, this is a clear sign that the company is not legitimate.
If you are dealing with a timeshare resale company that has 900 as the prefix, this is often a sign that the company is not legitimate. Legitimate companies will have a 1-800 number.
If you decide to pay a fee to a timeshare resale service to help you sell your timeshare, be sure you investigate it thoroughly before moving forward with the deal. Ask lots of questions and verify everything it tells you.
Licensing requirements. In some states, like California, only licensed real estate brokers may list and sell timeshares for resale. If your state requires a real estate or timesharing sales license, check with the state's Department of Real Estate to make sure the agent has a valid license. If the agent is licensed, check to see if there have been any disciplinary actions taken against the agent.
Unlicensed and illegitimate timeshare reseller scammers sometimes steal the identity of a licensed broker and then pose as that broker to get timeshare owners to fall for a scam. If you think you might be dealing with a scammer who has stolen the identity of a legitimate broker, get the name and phone number of the person calling and then locate a phone number for the licensee, call the licensee at that number, and verify that the person who contacted you actually works at that number.
Check with the BBB. If you are thinking of using the services of a timeshare resale company, be sure to check the Better Business Bureau website (www.bbb.org) for any complaints that may have been registered against the timeshare company. Do not do business with the company if there are grievances filed against it.
Search the Internet. You can also run a Google search to find out more about the company that you’re dealing with. Timeshare owners who have previously been scammed often post their experiences and warnings about scammers online.
If you think you've been a victim of a timeshare resale scam, contact:
Reporting unscrupulous timeshare resale schemes can help prevent others from becoming victims as well.