Timeshare Ownership Equals Disaster

Q My husband and I recently purchased a timeshare. It seemed a good idea at the time but since owning it we have never used it. What is the best way to sell it?

A A timeshare is a purchase of a future right to use real estate for a limited time period each year. It comes with a never-ending liability to make payments of association dues to maintain and manage the real estate that underlies the timeshare property. Many timeshare interests also require payment of property taxes.


Anyone interested in purchasing a timeshare should focus on the never-ending liability part of the ownership of a timeshare. It is never ending because many timeshares are virtually impossible to sell or even give away. Ebay is one of the only practical ways to sell a timeshare. You can check Ebay to see if any of the type of timeshares you own is for sale or has sold in the past in order to see if selling your timeshare is possible and what the value might be if you put it up for sale.
If you don't see anything like it on Ebay then you may be out of luck. There are various firms, mostly in Florida and Nevada, who will offer to list your timeshare for sale on their "nationwide" network. The cost for listing the property can range from $300 to $1,000. In my experience they make money listing the timeshare on a Web site that no one ever sees. Their business is in listing not selling timeshares. If you ask them for sales data on similar timeshares that they have sold you will quickly understand that they have no data or will give you false information.

A relative of mine recently went to a seminar on how to sell a timeshare. The bottom line was that if you paid them $3,000 they would "purchase" the timeshare.

What can you do if you can't sell it on Ebay?

1) If they will take it for free, give it to someone you don't like and will never see again.

2) Try to exchange it for anything that you can sell or donate.

3) Stop making the dues payments and hope that the association will just reclaim your interest instead of pursuing you for payments. This could affect your future ability to get credit. The association also may sue you for the amount of the payments, penalties, fees and costs.

4) If your timeshare is one that requires payment of property taxes in addition to dues, after five years the county will hold a tax sale of the property and your ownership would cease.

5) Sell your timeshare to a corporation or other entity that is going to shortly file for a Chapter 7 bankruptcy.

6) Continue to make payments and "enjoy" the timeshare and eventually your heirs will have the "joy" of ownership.

7) See if the timeshare association will accept a deed from you.

I have not met anyone yet who has owned a timeshare that could not have used the money they put into it to stay in a 5-star hotel for far less money and without any long-term liability. If any of the above ideas work, let me know.


Q We recently got an appraisal to refinance our loan and at the same time we had several real estate agents come out and give us estimates of market value. To our surprise the estimates of value are quite different, with the Realtors' estimates being much higher. Why?

A There may be several factors involved. First, the appraiser is working for the lender and not for you. There is little incentive for an appraiser to reach for the highest reasonable value when they are looking only to substantiate that there is adequate security for the refinance transaction. Second, appraisers are looking only at closed sales and not at the future market trends that the real estate agent is attuned to. Third, the appraiser does not have the ability to view all of the comparable properties the way that agents typically do. They are stuck with looking at printed data on the comparable sales and outside views.


The nature of the improvements on the inside often provide a greater insight into value than just data on square footage and lot size, which give the real estate agent an advantage.
Appraisers may also reach different opinions of value even though they are looking at the same data. Valuation of property in an area of tract housing or condominium development tends to be much more straightforward since the number of variables are reduced. However, most of the Bay Area has a wide range of housing types within relatively small neighborhoods making comparable analysis much more of a guessing game. I would generally advise relying on the information provided by real estate brokers who are familiar with the area and market trends.

Be careful not to accept the market value opinion that has no data to back it up. Agents who just give you a number off the cuff are just guessing and could merely be interested in "buying the listing" by giving you a high valuation only later to browbeat you into lowering the price because it isn't selling. Conversely, an agent could give you a low valuation so that your home will sell easily once it is listed. This is a strong incentive for you as the seller to obtain more than one opinion of value and make sure that the supporting data justifies that opinion.