Resale Scams
An increasing number of timeshare owners are being aggressively solicited by phone and direct mail to list their timeshares for sale. We are in no way trying to discourage you from using timeshare resale companies. We simply want consumers to be aware of their options and would like to mention some of the situations that other timeshare owners have encountered.
There are several resale companies operating under different names in many locations. Some companies may even claim to represent your resort or have names very similar to your resort or management company. Some may be legitimate; however, most are not. Listed below are some of the most common resale scams:
Scam #1: The company may call and say they have a buyer for your week, but they need you to put some money down to start the title search or to get the paperwork done, etc. They may even provide you with a copy of an agreement.
Scam #2: The company may call and say they have a buyer for your week and the buyer will pay cash now. In order to know how much they should pay, they need you to have a current appraisal. They will refer you to an appraiser (usually another division of the same company) who will charge you approximately $300-$600. They may even promise to refund the appraisal fee once the sale is completed.
Scam #3: The company may call and say they have a buyer for your week. They may even provide you with a copy of a sales agreement. You will be required to send them a copy of your deed and your bank account information including your checking account number and routing number. This is a ploy used to get your banking information by telling you that they can "get you paid quicker".
Scam #4: The company may guarantee the sale of your timeshare for an inflated price. They just need you to pay the listing fee, usually $300-$600. Some companies promise to buy your timeshare at the inflated price if it doesn’t sell within a specified amount of time. Others often promise a refund of your listing fee. They will usually try to talk you into paying the listing fee by credit card immediately.
Scam #5: The company may offer to buy your timeshare if you will agree to purchase their vacation club membership. For example, their club membership may be $6,000. They “buy” your timeshare for $4000, so your so your vacation club membership is only $2000 (plus $500 closing costs). They charge the $2500 fee and you think everything is complete. Owners later discover the deed to their old timeshare week was never transferred and they still own it, along with the vacation club membership. Since you signed the contract for their club membership, you are now responsible for fees on both products.
Scam #6: A person who identifies themselves as a “broker” calls and says they have someone who wants to rent your timeshare week. They need you to send them a $200 finder’s fee and after renting the week, they will send you a check for $700. If this were legitimate, the fee would be deducted from the rental proceeds.
Needless to say, our company strongly condemns this type of activity. We believe that consumer awareness and education are the best ways to combat these activities. Please remember the following tips:
- DO NOT agree to anything over the phone. Never give up the rights to your timeshare for any purpose. Never give your credit card number, bank account number or copy of your deed to anyone until you’ve had a chance to check out the company. Once your money is sent to a resale company, it becomes almost impossible to get it back. These companies do business in one area until the complaints get heavy, then simply change the name of their company and start over somewhere else.
- Beware of any solicitations that offer unrealistic promises concerning price or resale turn-around.
If it sounds too good to be true, it probably is. - Be certain the resale company you are dealing with is a licensed broker. Ask for the name of the company and in what state the company does business. Call the Better Business Bureau in that state to see if complaints have been lodged against the company.
(You can also go to www.bbb.org) - Ask them to send you written materials to study before making a decision. Have your attorney review these materials.
- Be wary of large up-front listing fees or any company charging an advance “listing” fee or “appraisal” fee. Consider opting for companies that offer to sell and collect their fee after the timeshare is sold.
- Make certain you understand all of the terms and conditions before signing a contract.
- Be sure the company who will be transferring your timeshare property prepares the proper paperwork. A new deed that is signed and notarized by the owner then recorded in the county where the property is located is the only way to transfer your property. An agreement to purchase, contract or bill of sale will not suffice in legally transferring the property. The property remains in the owner’s name until the new deed is recorded at the appropriate courthouse. Please insist on receiving a copy of the new recorded deed your records.
- Do not allow your billing address to be changed to the “buyer’s” or “resale company’s” address until the appropriate paperwork is filed and the account name is changed. Continuing to receive statements and reminders may be your only way of knowing if the paperwork was completed.
By providing this information, it is our hope to help guard you against timeshare resale abuse.