If you are interested in selling your timeshare, fill out our Seller’s Listing Request Form.
Karen Phelan is the Broker/Owner of Preferred Timeshare Resales. She has been a professional in the timeshare industry for almost 3 decades. A long-time advocate for timeshare industry ethics, Karen has provided some insight on current scams in the timeshare industry today:
Timeshare Scam Guidelines and Tips
How do you know if you’ve been scammed by a so-called timeshare resale company?
Presently, there are countless organizations around the globe, who attempt to collect fees upfront from timeshare owners who want to sell their timeshares. As a general rule, you can immediately spot a scam artist if they ask for money before the transfer or escrow is ever completed. These ‘upfront fee’ companies all have their own unique sales pitch. Typical upfront fees range anywhere from $199-$1,300. After a timeshare owner has given money upfront, they don’t realize that they’ve been scammed out of his/her money until valuable time has passed. This is disheartening, not only that the money has been lost, but that valuable marketing time was also lost, due to placing faith in these companies.
Here are a few of the latest scams:
Postcard Invitations to attend a meeting where an ‘offer’ will be made on your timeshare:
Many timeshare owners have received postcards in the mail that say something like, “Come to our seminar. We are making immediate offers on timeshares.”. Timeshare owners who have gone to these seminars are sorely disappointed when they learn that the people conducting the seminars have no intention of paying them for their timeshares. Instead, the people hosting the seminars announce to the timeshare owners that their timeshare will never sell, using gloom and doom tactics and third party stories. After convincing timeshare owners that their timeshares will never sell, they ‘offer’ to take your timeshare off your hands if YOU PAY THEM several thousand dollars. Only in rare instances is a timeshare truly un-sellable. Think twice about giving your timeshare to a stranger AND paying them several thousand dollars. Work with a licensed, legitimate broker such as Preferred Timeshare Resales, and you will not have to give your timeshare away. Additionally, you will have the opportunity to put money back in your pocket.
This is another commonly practiced scam in the timeshare industry. These companies have almost convinced the public, along with the government, that they are legitimate. They send out unsolicited advertisements via email and telemarketing. The telemarketers who contact you are working in boiler room type environments. They are not licensed real estate brokers or agents. Legally, they cannot show your property to anyone, charge a commission, negotiate for you, or even recommend an asking price.
The easiest and fastest way to extract a timeshare owner’s hard-earned money is to tell them what they want to hear. Here are the most common techniques:
Promising the timeshare will sell for comparable (or higher) prices than what the developer is selling them for. They will tell you they’ve sold timeshares just like yours for large dollar amounts, and that they have a waiting list of buyers. Timeshare owners who have not educated themselves about the timeshare resale market will often fall for this tactic.
They tell you their fee is the only fee you will ever pay. If the upfront fee advertising company actually does sell timeshares, they do so by sharing their ‘inventory’ with legitimate, licensed real estate brokers who charge a commission only at the time the escrow closes. In this case, the upfront advertising company becomes a ‘middle man’, lying to timeshare owners that their upfront fee is the only one they will ever need to pay. Unfortunately, the owners of these upfront fee companies have managed to work around the laws that control advertising. If a timeshare owner works directly with a licensed broker, the upfront fees and imminent disappointment can be avoided altogether.
They will tell you they hold showcase presentations in various cities, or open houses at your resort. These companies will tell you it is not necessary to hold a real estate license to sell timeshares. It is fraudulent to quote prices, show property, negotiate on your behalf, or give advice on any type of real estate, timeshares included, without a valid real estate license.
Title Search Scam, and Escrow Scam:
Again, legitimate title companies don’t charge upfront for title search and escrow. Fees of this type are collected only when escrow closes.
Timeshare is a form of real estate. Real estate appraisals and valuations can only be conducted by licensed real estate appraisers.
Small Commission When Sold:
If a commission is collected when the timeshare is sold, then why does the company need money ahead of time?
Closing Costs Paid Scam:
Some upfront fee companies will inform timeshare owners that their upfront fee also pays for closing costs. What they fail to tell you is there never will be a closing.
Fee Is Fully Refundable At Closing Scam:
Some upfront fee companies will promise a full refund of the upfront fee at closing. What they fail to tell you is there never will be a closing.
A Full Refund If The Timeshare Is Sold Through Any Other Means Scam:
To date, we are unaware of anyone who has ever been successful in getting their upfront fee refunded.
If you are truly donating your timeshare, you should not have to pay anything, including paying for an appraisal. Often times, the non-profit companies will require you to continue paying the maintenance fee until a recipient is located. Check to make sure the company you are dealing with is not selling inventory on Ebay to just to take the profits. If you still choose to donate your timeshare, be sure to understand when the deed will be recorded, and how the resort will be notified of the change of ownership, then follow up with the resort to make sure they are aware of the transfer.
How To Sell Your Timeshare and Avoid Scams:
Licensed brokers who specialize in timeshare resales will help optimize your chance of success in selling your timeshare. They adhere to a standard of ethics and professionalism required by their licensing authorities. They have knowledge on how to accurately price your timeshare, based on comparable sales. Brokers not only bring buyers and sellers together; they also utilize appropriate contracts, and oversee the entire sale process to make sure the transaction goes smoothly and is brought to a successful conclusion.
If you are interested in selling your timeshare, fill out our Seller’s Listing Request Form