Many people buy into timeshares under the misrepresentation that it is an “investment” they will be able to sell. Unfortunately, when owners are looking to get out, they quickly realize that most timeshares are not worth anything. You can go on eBay, or timeshare relisting sites and find people who are just wanting to get out, but who are not selling them for even a $1. It is easy to get misled based on the advanced sales tactics and general marketing of timeshares. Most people going into a beautiful multimillion dollar resort do not think to question it. After all its marketed as simply a 1/52 share of property that is tradeable to wherever you want to vacation. Once people figure out its lack of value, it begs some questions: So why aren’t timeshare worth anything? What would make a timeshare worth something? What do you do with a timeshare if it cannot sell?
Why aren’t timeshares worth anything?
There are two big reasons timeshares are not worth anything; (1) They cost more money than they give in value. (2) Timeshares are not secured interest like a house, they are essentially a contract for maybe a vacation here and there and nothing more.
So how do they cost more money than they are worth. If you are paying a mortgage payment every month plus a $1000 or more in annual maintenance fees, but only booking 6 nights (a week) out of the year, it is cheaper to just book it online. Our attorneys have talked more about the math behind it here. In short though you are paying money every year for a vacation that you may or may not be able to use and paying a premium price for that vacation even if you can get a booking. Another person is not going to be inclined to buy your timeshare because it is a forced yearly contract. They can just book when they want to online and not worry about the yearly fees. They can book the same day and are not forced to wait 11 months with limited availability.
The second reason is that there is no real security in a timeshare interest. While they are often marketed like houses or property, they almost never are. All a timeshare contract is, is the right to use “points” within a specific system. A point value is completely arbitrary and there is little regulation of it. What 10,000 points gets you one year can be completely different the next year. Thus, there is no guarantee for what a timeshare contract affords you from year to year. Where if you book online, you know exactly what you are getting every time.
What would make a timeshare worth something?
So, what would make a timeshare worth money. While it is rare there are some cases where timeshares are worth something and can be sold in a resale market. Most importantly is that they are a deeded timeshare (not a points system, or a sham deed masking a points system) and that they represent a desirable location and time of the year.
So, what is a deeded timeshare and where are they. There are some old timeshares usually that predate 2000 and have not been ‘upgraded’ that are a common interest ownership, like a condo, but split among 52 shares. The people who have and obtain these real deeds have an actual property interest in the timeshare location and use rights in it. The nice thing about some of these deeds is they are not subject to arbitrary restrictions by resorts because the resort does not own the interest. These weeks can be used for the exact same week every year, in the exact same location without restriction. Many even deeded interests have no value (particularly where the annual fees are high) but some deeded timeshares may have real value, while often not worth as much as they initially cost. Since they are real property, thus they can be sold like property.
The second factor (after having a deeded timeshare) is that it must be a desirable time and location to have value. If the timeshare is say in Hawaii for the week of Christmas it could be worth a fair bit of money, but just like real estate location is a huge factor in determining value, with timeshares, the time that it entitles you too is just as important. Considering all of that. Some exceptions exist for value in deeded timeshares that can be worth something if it meets all these requirements, the unfortunate reality is that timeshare resorts abandoned this method of sale many years ago because it was restrictive on the resorts. Now they can book, or not book, or sell as many interests as they want without reserve because its just a contract that is written by their lawyers, to benefit them.
What do I do with my Timeshare if I cannot sell it?
The best answer is to get out of it. They are often difficult to get rid of, but they can be legally divested (timeshare termination, cancellation, and settlement). It is important to know that timeshare contracts are set up to be extremely favorable to the resort and no matter how you may have felt deceived it is unlikely the language of the contract gives you much recourse. That is not the end though because a lawyer who knows a thing or two about these resort practices will know the weaknesses that the resort will not be prepared to defend against. If you want to get rid of your timeshare, contact our team of attorneys online, or call our office to become a Pro Bono (free) client of the law firm for legal Advisement, Case Analysis and Testimony (all pro bono): 360-918-8196