N/T Time Share ?

[Eli]

A friend purchased a time share a while back. She is now trying to get rid of it. I'm not sure exactly how it works. She pays $184.00 monthly & $600.00 at the end of the year for maintenance and other fees. What would be the easiest way out of this arrangement? She is not trying to make any money. She just wants to get rid of it. She owes about $8500.00 on it. I think it's based in Orlando, Fl.

Any help or leads would be greatly appreciated.

Eli

[JohnH]

Eli:

Your friend may have a problem. While some time shares have value, it's my understanding that the vast majority carry little or no resale value. The initial purchase price is so inflated with marketing fees that the owner can never gain any "equity" ( assuming there is such a thing with a time share).

My experience with this can give you an idea of the situation many sellers face. For several years my wife & I would rent whatever was unoccupied at a time share development near a ski area we visit. We finally decided it would be nice to go to the same unit each year, so I obtained a list of unit-weeks for sale at that complex. I finally offered a guy $750, plus we paid the two years of back dues he owed (about $300). When we signed the closing papers, I noticed he had paid $8,000 for the time share about 10 years earlier. He had been trying to sell it for 2-3 years and ours was the only offer he had ever received. In his case he owned it outright, so accepting our offer was just a matter of swallowing a sunk cost. If he had been making payments on a loan I doubt he would have sold to us since he would have been required to bring money to the closing. He would probably still have it on the market with no offers and the delinquency on the annual fee piling up, or else he would have just let it go to foreclosure at some point. For us it was a good deal, but for him it was a disaster. He's probably lucky he hadn't been induced to pay $25K for the time share when it was initially marketed to him. We saved more in the first couple of years than we were paying to rent the place, so if we ever must get rid of it and can't find a buyer, we can just tell the time share company they can have it back and we're not out anything.

Time shares seem like a good idea at first, but people forget that their needs change. They move, their interests change, their lifestyle changes. But there's that albatross still around their neck and they can't get rid of it. I know some people do quite well with time shares, but for most people paying more than they are willing to walk away from makes them a sorry deal. Certainly not an investment that can be relied upon to produce a return or even a break-even..

[Eli]

John,

Thanks so much for that in depth reply. That is pretty much what happened to her. She thought it was a good idea at the time. She is single & thought she would be able to use it regularly. Unfortunately that is not the case. Even though she is still single, work and other obligations have not allowed her to travel as she would like. I would imagine if she would let it go to foreclosure it would affect her credit? Her credit scores are in the 800's and she would rather keep paying the monthly payment rather than take a hit on her credit score.

Thanks again for the info.

Eli

[JRS]

For whatever it is worth, we get TV commercials on "buying or selling your timeshare." There are also places on the internet where you can sell or they will buy timeshares. They are like real estate agents, but they seem more like "consignment sales." Not much help, but a place to look.

[Eli]

For whatever it is worth, we get TV commercials on "buying or selling your timeshare." There are also places on the internet where you can sell or they will buy timeshares. They are like real estate agents, but they seem more like "consignment sales." Not much help, but a place to look.

Thanks, JRS! I will check out some of these leads.

Eli