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I’m a huge advocate of buying used, be it cars, furniture, clothing, q-tips, or vacations. Now, hold on, it’s not as gross as it sounds—a used vacation can actually be quite nice. I’m talking about used timeshares, which can be a great buy, often between 70-90% off the original price. Photo used under creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en Prop: Q-tips
Now, if you’ve never stayed in a timeshare, you might be wondering what all the hype is about. Even if you have stayed in one, you might be wondering, because some timeshares are nothing more than a hotel room. On the other hand, some are the very epitome of luxury, with majestic views, multiple bedrooms, full kitchens, barbecue grills, and great amenities like swimming pools, saunas, tennis courts, golf courses, and little huts where you can buy 50 cent candy bars for 2 bucks. A true vacation home, even if only for a week. Photo by Ross Hawkes Photo used under creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en Prop: sunglasses
“ Good times, my friend,” I say as I munch on my $2 chocolate bar, “good times.” Photos by RiRi Trautmann & Ray-from-LA, used under creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en Prop: chocolate bar
A timeshare is ownership in a sliver of real estate. The idea is elusive because you will not always stay in the same property or unit, and you are often limited to specific dates every year. However you may exchange “ownership credits” and trade for a different location or date, which may or may not be more expensive. As confusing as it sounds, you actually get a deed in most cases, which means that while you can’t necessarily touch it at any given time, you essentially own some kind of real estate. Photo by Tanakawho, used under creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en
Surprisingly the secondary market for timeshares is not very active with buyers, but has a good deal of sellers. “Why the imbalance of supply and demand?” your economic mind must be screaming right now—or maybe it’s only my mind that does that. Photo by Mutsmuts, used under creative commons license found here: http://creativecommons.org/licenses/by-nc-nd/2.0/
The answer is “imperfect information.” Buyers don’t know where to look, and sellers don’t know how to sell effectively, probably because the costs and benefits of such a product can be difficult to nail down. Also there are vast networks of professional timeshare salespeople, who are very good at what they do, and offer free steak dinners in order to sell NEW timeshares. But, there are far fewer professionals selling USED timeshares, and used timeshares are rarely accompanied by a cut of angus top sirloin.
Life changes such as divorce and bankruptcy can be powerful incentives to dump a timeshare, though I suspect, in most cases, the timeshare was just too expensive in the first place for most buyers. These and other factors make original holders of timeshares eager to dump them, even at large losses. Photo by Bucklava, used under creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en
As a potential buyer, know that the sales prices will NOT include typical ongoing expenses, like annual fees ($500 - typical), property taxes, special assessments, or other miscellaneous fees, all of which can increase substantially with little notice. There are also one time transfer fees ($0-$200) and closing costs ($0-$2000).
Fees are the real deal breakers. You must also remember your date restrictions for use, and keep in mind the transportation costs you will bear, in order to physically get to your timeshare every year. (Dodge the money) A timeshare in Maui purchased for $100 might end up costing you tens of thousands in terms of travel costs and fees each year. Photo by DirectDish & Amagill used under the Creative Commons License found here: http://creativecommons.org/licenses/by/2.0/deed.en
In the secondary market for timeshares, some benefits don’t transfer, like pool privileges, sauna use, opportunities to “extend” or buy additional points. Find out beforehand what benefits might be excluded. Photo by Jurvetson, used under the creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en Beach Towel, Sunglasses, beach ball, beach hat
Instead of simply figuring out how much you could afford to spend on a timeshare, a better place to start is assessing how much you already spend on annual vacations. The idea is to get a better deal on vacations, not to spend more money just to make the timeshare work. Photo by 05com, used under the creative commons license found here: http://creativecommons.org/licenses/by/2.0/deed.en
So where does one find this elusive flea market for used timeshares? Some major real estate companies have used timeshare divisions, but your average Joe, or Josephine, wanting a glimpse at the market might do well by starting at good ol’ fashioned Ebay.
A search can start by simply typing in the word “timeshare” into the search bar. From there you can fine tune your search to match the price and location you desire. Make sure you understand how seller ratings work before you purchase anything. Beware of sellers who lack consistent history of positive ratings.
Like any used market, beware of scams and frauds. Do your homework, and ask questions. After all, last thing you want is to show up, and find a bunch of old q-tips laying around. Unless, of course, you really are that frugal, in which case I think it’s safe to say, that you’ll only need a timeshare with room for one. Photo by Jpoirrier, used under the Creative Commons license found here: http://creativecommons.org/licenses/by-sa/2.0/deed.en
Except for materials used under the creative commons license, this presentation is copyrighted by the University of Idaho. You are free to use these materials for educational purposes as long as you cite the author, and University of Idaho, as the source. University of Idaho Extension is your source for unbiased financial Information. The University of Idaho Extension System does not sell, promote or endorse any financial product or institution. Our programs are strictly educational. Seek professional advice from your accountant or financial advisor for specific product information. The University of Idaho provides equal opportunity in education and employment on the basis of race, color, national origin, religion, sex, sexual orientation, age, disability, or status as a disabled veteran or Vietnam-era veteran, as required by state and federal laws.
Transcript of "How to buy used timeshares 4 21-11"
How to Buy Used Timeshares By Luke Erickson, AFC University of Idaho Extension
Where do you buy them? <ul><li>Real Estate Companies, </li></ul><ul><ul><li>Timeshare division </li></ul></ul><ul><li>Ebay </li></ul>
<ul><li>Check details </li></ul><ul><li>Most important is to check the seller rating. </li></ul>
Arrange your own live class! <ul><li>Luke Erickson, AFC, author of “How to Buy Used Timeshares” will teach this class, or any other Personal Finance topic to a group of your choice, for FREE! Contact Luke Erickson at [email_address] , to arrange.* </li></ul><ul><li>*If your desired workshop location is outside a 90 mile radius from Rexburg, Idaho, you will need to provide the author/speaker with some cold hard cash to cover all associated travel costs. Thanks so much for helping change lives two cents at a time! </li></ul>
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