What are my selling options and what should I watch out for?
Although you can sell and purchase timeshares directly between principals without a license, a real estate license is required in most states for a third party to handle the transaction. An unlicensed advertising or marketing company will not and can not legally help you with negotiating the deal, opening the escrow, tracking the escrow and making sure the transaction closes according to the terms of the initial contract.
Seller Quick Tips
Before committing to work with any specific licensed broker, you should ask the broker for a copy of their information package. This package should explain in detail the type of services the broker intends to provide and the fees involved. The broker's information package should clearly spell out the purpose of all fees and any refunds that apply.
Companies that offer guarantees regarding the sale or purchase of timeshares are in most cases unlicensed and unable to back up their promises. The Real Estate Departments of most states prohibit or discourage licensed brokers from making guarantees of any kind with regard to real estate transactions. A close look at the economics and time frames of most guarantees will reveal how truly unrealistic they are.
Upfront listing fees can vary from between $50 to $500. Developer/resort on site programs usually have a $50 listing fee with a 30% commission at the close of escrow. In contrast, off site company fees vary from $195 to $500 with a commission anywhere from 0% to 50%. Upfront fees should be proportional to the services provided and the associated services should be continued until the timeshare is sold.
When a broker collects an upfront fee, there should be a written agreement with the owner, outlining and obligating the broker to perform all the services promised. All fees collected should be placed into a trust account and spent according to the written agreement for the benefit and protection of the owner.
Regardless of how you were able to buy or sell your timeshare (on your own, thru a friend, a referral, the resort, the developer or thru a resale broker) always use a third party escrow company and obtain a third party title insurance policy to ensure your transaction is processed properly.
If you are unable to use or exchange your timeshare unit, rentals provide a third usage alternative for owners and an opportunity for renters to experience the benefits of timeshare ownership at a reasonable rate. In some cases, a rental may result in a sale. As result, some companies may ask you for your usage week for a potential buyer to use. Never give up your usage week without a comparable exchange option or reasonable compensation.
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