TIPS for prospective buyer of timeshare resales

TIPS FOR PROSPECTIVE BUYERS

It's a vacation. Don't look at a timeshare strictly as a real estate investment: it's a prepaid vacation accommodation and should be considered as an expenditure just like an annual vacation.

What to look for. Try to visit the site; if you cannot, consult reliable sources who are familiar with the area and the development. Do you like the area and will you enjoy returning to it year after year? Are you buying your interval for the time of year you usually take your vacation? Do you like the facilities offered? Is the project completed?

Timeshares are sometimes sold through promotions offering "free" vacation certificates, prizes or gifts as inducements to inspect the developments. With vacation certificates, you may not always get what you expect. If you receive one in the mail or are offered one by telephone, find out if the "participating resort" where you will be staying is indeed "participating"; find out if you will end up having to pay a lot of money for travel expenses and extra charges for your "free" trip. Gifts and prizes also may not be what they seem; sometimes cheap imitations of quality goods are offered or the "prize" is deceptively described.

Remember that the free gift or vacation certificate is an inducement for you to listen to a sales presentation for an offer that involves a large sum of money. Bear in mind that a timeshare is a major investment and you want to know just what you are buying. Ask questions and do not sign anything unless you are fully aware of the consequences. Be extra wary if sales persons pressure you to sign and don't allow enough time to consider carefully the contract involved.

Nature of ownership. Determine whether the unit offered is a fee simple or right-to-use unit. Fee simple units are usually more expensive, but they may provide some tax benefits. They also allow the buyer to have a voice in the management of the resort. Right-to-use units often have a lower price and less management responsibility, but resale rights may be limited.

Long-term ownership. A timeshare isn't a one shot deal. Prospective buyers should find out how the long-term management of the resort is to be provided for and should examine the operating budget to make sure it will meet the needs of the project over time.

Exchange programs. Offers of exchanges for other timeshares are usually an important consideration for timeshare buyers. But, there may be no assurance that the program will be able to provide the interval owner with another accommodation that is desirable or available at the time the owner wants to swap. There may be no assurance that the development one buys into will continue its contract with a given exchange, or with any exchange. Remember that exchanges rate participating units by desirability and other factors; buyers in a project that is not highly rated by an exchange cannot expect to "trade up" to fancier units, more appealing locations or better times of the year.

Maintenance costs. Be aware that the timeshare owner faces the risk that the annual maintenance fees (varying from $300 to $450) will rise as the property ages and upkeep becomes more expensive.

Payment. Make sure your money is held in an escrow account until your title to the unit you are buying is free and clear.

GOVERNMENT REGULATIONS OF TIMESHARES

Currently the federal governments of the United States and Canada do not directly regulate the timeshare industry. Laws bearing on timeshare transactions vary from jurisdiction to jurisdiction. Potential customers should check with their state or provincial securities, real estate, or consumer protection agencies to determine what, if any, laws and regulations apply. Some states do require registration, the issuance of a prospectus by promoters and a cooling-off period after sales in which buyers may rescind the sale without penalty.

BEFORE YOU SIGN A SALES CONTRACT, be sure to get answers to the following questions--in writing.

What is the nature of your right in the property? What is your specific title? Does your contract give you an ownership, lease, or a security interest?
If your contract is for a leasehold timeshare, what is its duration: twenty years, forty years, or life?
Can you transfer the title of your timeshare, or does it revert back to the developer if you choose to leave? Can you sell your timeshare yourself, or does the developer have exclusive rights of sale?
Make sure that the contract is specific about maintenance fees. If such fees are not listed, make sure you have the current year’s maintenance fee.
Be certain you are purchasing the property from a licensed Real Estate firm who will hold the escrow deposit or have a third party hold escrow and transfer ownership for you.

800-555-1353

Ask for Mark Nayman

570-688-9220 Int'l - 570-620-0755 (Fax)

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tsresale@ptd.net

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All information presented is deemed accurate but cannot be guaranteed until all official resort and owner documents are reviewed. The information on this site is provided by individual property owners, marketing and ad agencies or owners associations through the Timeshare Resale Division of: Andrew Hunter Real Estate licensed Real Estate Brokerage # RB046454-L Suite #8 Merchants Plaza, Tannersville, PA 18372 USA Andrew D. Hunter, Broker, Mark L. Nayman, Associate Broker # AB 065991

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