If you are reading this, you likely have a timeshare you can't figure out how to sell. You are not alone. One expert reports that of the 1.5 million time shares in the US, over 800,000 are actively for sale and most of those are offered at well below the original cost. Less than 3% of time share that are offered for sale sell each year, and for good reason. Without the free breakfast, resort tour, and high pressure sales people explaining the benefits of the "timeshare" investment, who would actually pay for one?
So if You Can't Sell a Time Share, can You Give it Away?
You might be able to give your timeshare to charity under certain circumstances. There is one non-profit called Donate for a Cause that facilitates time share donations for a variety of large recognized charities including American Kidney Fund, American Cancer Society, National Foundation for Cancer Research and United Cerebral Palsy.
To make a time share donation you will need the deed or contract (depending on the type of timeshare). If you don't have this document, they will charge a small fee to pull it from register of titles. You will also need to own in a resort that makes sense for some resale. It appears that some of the donations actually get sold back to the developer, while some get sold in the secondary market.
What are the Chances of the Time Share Donation Being Accepted?
Donate for a Cause reports 50-60% of donated time shares are accepted. The process takes a few weeks. Time shares that they can't accept usually have outstanding mortgages that the donor is unable to pay off, have overdue annual maintenance fees, or have been allowed to deteriorate badly.
What Benefit is There to Making a Time Share Donation?
The biggest benefit is that you will no longer need to pay maintenance fees, special assessments, taxes, booking fees etc. You will also avoid broker listing fees (which are often substantial and do not result in a sale anyway).
A secondary benefit is that you will get a tax deductible receipt for the actual value of the timeshare. This benefit can range from a few hundred dollars to maybe $5000.
You also can feel good that you helped a charity with your time share donation.
Why are Time Shares Worth So Little?
Time shares are over priced prepaid vacations. When sold by the developer they net a huge markup to actual value of the underlying real estate. Really, the developer can sell so many weeks of timeshare over the total development that the marketing effort can take years and provide a good return to the developer for years to come. That is the real business, the actually development is secondary. Also the developer often retains some interest in the management contract, giving them additional profits from charging fees.
Consider this Time Share Math:
Cost of 1 week in the resort X 52 weeks = total sales price of the unit.
Example: $30,000 X 52 = $ 1,560,000 - is the time share suite worth that kind of money if you owned the whole thing?
Compare that total to what an actual whole condominium would cost - or a whole house in the area - and you will always find that the time share is way overpriced. If it was not way over priced the developer would just have sold off the suites as regular condos at market.
Look at it from the other side. What does a similar condominium unit sell for in the area? Divide that by 52 to get what a week is worth then discount that even more because you bought fractional ownership that is REALLY hard to resell. Further discount the price by what you still owe on the time share to figure out the true value of your investment. Not much is left when you do the calculation that way.
Suite is worth $250,000 / 52 weeks = $4,807 a week less outstanding debt.
Also, marketing expenses of time shares can run over 50% of the price. The sale commission alone is substantial in the time share business, add in the presentation center (or rented room) "free" gifts and the cost of marketing to get you in the door in the first place. It adds up fast.
But People Buy Time Shares All The Time!
Yes, from the same high pressure flashy presenters you bought from. They don't buy on the resale market because you can't tell that compelling story and you don't have a machine to sell hard.
The time share listing companies often make unrealistic promises to get your listing fees and renewals (ya plan to renew because it will likely not sell quickly). Listing fees can exceed the ultimate sales price.
Maybe I'll Just Leave it to Our Kids
One of the "benefits" used to sell time shares is that you can leave the vacation property to the kids and grandkids. It's in the contract even. Well your kids and grandkids will be stuck with something they likely can't afford in a location they likely don't want.
If I Can't Sell and I Can't Donate My Time Share What Can I Do?
- Walk away... this sometimes works if you stop paying the fees but make sure you understand the consequences of this action. Will someone sue you? Will they win?
- Contact a company that specializes in get rid of time shares by negotiating away or terminating the deal. They will charge you a fee but it will be cheaper than feeding that time share year after year. However exercise caution - there are many less than reputable firms out there re-victimizing time share victims. Research these types of companies very carefully because some do not do what they promise.
Talk to your resort manager about your problem. The manager may be able to point you toward a legitimate buyer or explain how to exit your contract.
Finally, remember to swallow your pride and tell your friends and family you made a big mistake buying that time share and that they should save themselves the grief of time share slavery.