Ever since the timeshare phenomenon began in this country, back in the early 70s, the industry has been plagued with accounts of dissatisfied customers, on both the buying and selling sides of the equation. Dubious marketing tactics like pushy, gimmicky sales pitches have contributed to the problem. Add outright fraud to the mix and you have plenty of incentive for consumers to take a dim view of timeshare vacations.
There are, however, good deals to be had and many honest, legitimate marketers out there promoting them. For many of those who could never afford owning a vacation home, the timeshare option provides an alternative within their budgets. Your Better Business Bureau offers this advice for those interested in exploring the world of timeshares.
A timeshare should not be looked on as a financial investment with the expectation of property appreciation. The payoff should come in the form of family vacation enjoyment at an exotic or at least desirable local. The main profit potential is realized by developers who get to sell the same unit 52 times a year, with all the maintenance fees, whether the owners actually come to the unit or not. The resale value of your timeshare will likely be a good deal less than what you paid for it.
Industry insiders say that the best deals are found in the used market. Prices are dramatically lower than when new and sellers are often highly motivated. Usually the owners are tired of paying those annual maintenance fees for places that they may not have even visited every year. (And that may be a lesson for anyone considering purchase as well.)
Consider this when buying
Calculate your total cost of a timeshare or vacation plan to include the mortgage payments and expenses, travel costs, annual maintenance fees and taxes, closing costs, broker commissions and finance charges. Then compare it to the cost of renting a similar accommodation in the same location for the same time period.
Additional tips for buyers:
• Beware of upfront fees, especially before you have even been able to review a contract.
• Look at the location and quality and the availability of units. Visit and talk with other owners about their experiences.
• Check out the resort developer and management company with the state Attorney General, local consumer protection officials and the BBB.
• Research the companies and sellers online.
• Be sure everything the salesperson promises, including obligations and benefits, is written into the contract and walk away if not.
• Don’t buy on impulse or under pressure. Demand everything in writing.
Find additional tips at the Federal Trade Commission’s site for consumers, found at consumer.ftc.gov.
Scams have been especially predominant for sellers of timeshares. Often the fraud goes like this: A company or “real estate agent” contacts you claiming they have a guaranteed buyer for your timeshare at an attractive price. They request an upfront fee and once they have it, are never heard from again. They may provide legitimate-appearing contracts, so do not be fooled by that tactic. Be especially wary of requests that you wire money. That is always a red flag for a scam.
A scammer may hijack a legitimate listing in an online classified. Or they may create a fictional listing with a hijacked photo from another ad. After your payment is sent and you arrive at the site you can be astounded to find that it was not even available for rent and perhaps does not even exist.
Tread carefully in the scam-ridden world of vacation timeshares. For questions or concerns, contact your Better Business Bureau at (800) 856-2417, or visit our website at bbbinc.org.