Timeshare Red Flags: Six Things to Look Out for Before You Sign

Kennedy says some resorts do have an interest in their reputation management and may end up working things out with the client and negotiate a reduced debt settlement or a walk-away agreement that benefits both sides. But he says to remember that this is a contract of perpetuity. It is a valid binding document. It’s just not as simple as walking away.

Crist explains it this way. “If it’s a desirable location, some resorts are usually more willing to negotiate some type of walkaway because they know that they can turn over the inventory quickly. But if it’s an undesirable location, it takes them longer to flip that inventory and guess who has to pay those maintenance fees. Their owners association has to pay for upkeep rates on the property. They are unwilling to accept back properties knowing that they have to fork out the maintenance fees to pay the association or developers.”

So what are the red flags or warning signs to look out for if you are in the market for one of these properties? Here’s what the experts say.

Don’t buy into salesman sizzle:

They are commission sales reps and are making money if you buy. They are going to make a lot of promises which most likely will not be in the contract. If you’re relying on anything that has been said, make sure it is spelled out in the contract and make sure they highlight it, they point to it, they write it down, and make sure it’s in the contract.

A time share is not an investment:

If you are relying on this as an investment, don’t. It’s not an investment. They sell you on the fact that you can resell this and make money down the road or if you can’t use it one year you can rent it. However, most of the time either those options are not allowed or there’s a fee to to exercise them and you don’t end up breaking even.

Scrutinize the point system

Remember that the points being sold to you at that resort may not translate one for one to another resort.

Don’t fold under pressure:

Always ignore the line, “today only.” It’s just not true. It’s sold as a today only offer but you can always take some time to reconsider. If you are willing to go back they’re always willing to sell it to you.

Location:

Always look to see if your resort is in a prime location. Remember this always makes it easier for the developer to let you walk away. Make sure that when it is time to sell the product it is a branded product that has a good reputation to make it easier to sell.

Current versus future income:

Check out the mortgage and maintenance costs and compare with your budget. How much do you routinely spend on a vacation? You may find that fixed costs with a time share over a long period of time makes economic sense, especially when you consider a future in which you won’t be earning quite as much.

The N.T.O.A. has a toll-free hotline available for all time-share owners, not just members, to help them with issues they may encounter. You can call 1- 844-ASK-NTOA.