Timeshares are a way to own beachfront property for one week out of the year without having to worry about year-round maintenance. They can make sense for some, but as Paula Lanzi found out, the math wasn’t adding up for her family.
“My stepson lives in Virginia Beach and we visited a timeshare in Virginia Beach, and my husband said, ‘I think this will be really great for us.’ And at the time it was, but life changes and we just really haven't been able to use it,” said Lanzi.
In the seven years they've had their timeshare, Lanzi and her husband have visited once.
“We're still paying the mortgage on it and we pay a yearly maintenance fee, which is around $900,” she said.
They realized this arrangement wasn't for them, so they started looking for a way to sell their timeshare. They did what most people would do and found a company on the internet then went in for a meeting.
“They wanted $6,000 upfront and when we said ‘no’ to the $6,000, all of a sudden it came down to $3,000, and when I got the actual contract, nowhere did it say it would help us legally get out of what we were into. It just said it would help us navigate through it,” said Lanzi.
Even as a realtor, Lanzi wasn't able to find a reasonable option that didn't require upfront fees.
Jessica O'Daniel, a broker and board member with the Licensed Timeshare Resale Brokers Association (LTRBA), said timeshare scams are common.
“You get contacted out of the blue and they say we have a buyer for you, we can get it sold now, all you have to do is put some money aside for escrow or closing costs or something of that nature and then all of a sudden that company disappears,” said O’Daniel.
Or a company charges you money upfront with no guarantee of selling your property.
“What I always tell my clients is you wouldn't pay your real estate broker money to get your house sold before they actually sell your house, so why would you do the same for your timeshare? Timeshares are real estate, you have to be a licensed broker and you don't pay anyone upfront,” said O’Daniel.
And if you are able to sell it, O'Daniel said not to expect much back. Most properties sell for 50 to 90 percent less than what you paid.
“Or less. We have properties listed on our website for a dollar or for $99 dollars,” said O’Daniel.
And the significantly depreciated value now has Lanzi rethinking the sale altogether.
“Oh, ridiculous amount of money, which is why now we're thinking about just keeping it at this point and maybe making more of an effort to use it because it just wouldn't be worth it,” said Lanzi.
O'Daniel said timeshares can be great for families but it's important to realize they're not an investment.
Before buying a timeshare:
• Do your research
• Don't feel pressured to buy a timeshare in a sales presentation, take your time to make a decision
• Look on the secondary market for properties being resold
And if you own one:
• You can rent it through the resort or list it yourself
• Give it to a family member
• Exchange your week
• Donate it for a charity auction
For more tips on timeshares, click here.