So, what’s the catch? (always be asking what’s the catch!) The catch is that you often need to sit in a multi-hour long sales pitch where the salesperson will be extreme aggressive and throw every single sales tactic at you in an attempt to get you to buy. They need to close 10-20% of all their leads in order to stay in the business, so they’ll try everything. And, if you’re human, chances are you will be tempted at one point during the presentation… and 10-20% of you will pull the trigger and buy a timeshare. That’s what they’re banking on.

Some words of warning about scamming, it does still happen. Don’t go to a timeshare presentation if the giveaway seems too incredible, like a free car or boat or something else. Don’t go to a timeshare presentation if the giveaway requires you to put down a deposit, say for hotel rooms or flights. Don’t agree to do anything if you don’t feel 100% comfortable.

If it sounds too good to be true, it is.

So, if you leave with only one thought, it should be that you need to perform your due diligence when it comes to the decision to buy timeshares. There is no right or wrong answer, simply an informed decision that only you can make.

With a used car, you might be concerned that the car wasn’t properly operated, that it wasn’t maintained, or that it has hidden damage you don’t know about. With a used timeshare, you have none of those fears. An annual maintenance fee ensures the resort is maintained to the owner’s liking, that any damage is repaired quickly (so the room can be given to another timeshare owner), and everything is on the up and up.

The only thing you don’t get, when buying on the secondary market, is the opportunity to pay the exorbitant marketing and sales fees! So, where should you go if you want to buy a used timeshare?

• Resort Office: If you have a particular resort in mind, give the resort’s management a call. They should have information about any timeshares up for sale or they may be able to contact their owners to see if anyone has been considering selling. Dealing with the resort management puts you at a disadvantage because you often won’t get many data points to help you determine the fair price.
• Timeshare Resale Broker: There are probably as many timeshare resellers as there are sellers, so locating a timeshare reseller in the area you want to buy a timeshare will be helpful. The advantage of a broker is that they can usually give you a bunch of different options that will help you gauge the average prices.
• Internet: There are plenty of timeshare resellers and bulletin boards on the Internet, Google is your friend!

Those three are probably the best places to look but you can also try online auctions, Craigslist in the area, or even the local newspaper. I think you can save yourself a lot of searching time by going with the Internet or a broker.

You can buy timeshares in one of two ways: developer sales and the resale market. If you have no stomach to read the whole article, my takeaway tip is to always buy from the resale market.

Developer Sales

Developer sales are those “preview tours” or “timeshare pitches” those salespeople always try to get you signed up and registered for. They will give you tickets to shows, free meals, even straight up cash to get your but in the seat for a timeshare presentation. The old stereotype of a fly-by-night operation is just that, a stereotype, now developers run the full gamut from shady little companies to large resort firms like Marriot and Disney. Timeshares are not scams, but they are opportunistic.

Timeshare sales and marketing (all those freebies!) can account for at least 50% of a developer’s sale price. That’s right, if they quote you a price for a timeshare, you can count on around half of that paying for sales and marketing, not the unit! That is why buying from the developer is always a bad idea.

Resale Market

Like any other property, you can sell your timeshare (or your right to use it, in right to use ownership types) so the resale market is a great way to purchase a timeshare on the cheap. This isn’t like your home, chances are you can only get a fraction of the purchase price if you ever decide to sell your timeshare because such a large amount goes towards marketing and sales. You can usually get a timeshare for its actual value, which is 50% of the sale price (and you thought cars depreciated quickly!).

Like home sales, there is no clearinghouse for the sale of timeshares and thus no “price list” to help guide you as to how much a particular property is worth. There are two resources you can count on if you want to try to figure out how much a property is worth: real estate agents who may deal with timeshares in the region and the internet.

Direct Exchange

This is the simplest way possible, you just find a timeshare owner in the location you want to visit and you swap their week for your week. All you do is tell your respective resort management offices that you’re reserving a week for someone else. It’s the same process you go through when you give your week away to a friend or relative, you just make the reservation in their name.

Vacation Club

You don’t actually have to do much of anything except work it out with the Vacation Club management. Since they own all the resorts, you simply trade for similarly valued weeks at other locations. Obviously this only works if you’re actually in a Vacation Club, otherwise you’re left to option 3…

Timeshare Exchange Company

This is, now, the most common way to do an exchange. You deposit your week with the exchange company into their “space bank” and then select from a list of available inventory. The availability inventory will only include those weeks that the exchange company considers comparable to the weeks you’ve deposited. There is almost always a fee associated with exchanges.

Since the club membership is a right to use, you can sell, donate, give away your membership just as with a one-resort timeshare and the differentiator is the type of membership. The more expensive the membership, the more benefits and access you get.

Vacation Clubs can get very complicated in terms of ownership when you get down to the nitty gritty, so you’ll want to review the documentation very closely. For example, with smaller vacation clubs you may actually own a deed much like a typical timeshare.

Disney Vacation Club

The Disney Vacation Club is a prime example of a vacation club where you purchase a membership and then can use your time at a multitude of locations, not just Disney locations (they claim 500 on their website), even cruises. Another strength of vacation clubs, especially if they are affiliated with a big company such as Disney, is that they can offer amenities not typically available through your regular timeshares. For example, Disney offers ExtraMagic hours where you can go into their theme parks an hour early or stay up to three hours later, guest transportation, Disney service, and package delivery (in fairness, these are offered to all guests of Disney resorts).

When: Fixed, Floating & Rotating Weeks

If the timeshare offers a fixed week, then ownership affords you to right to use the timeshare, usually a fixed unit, on a particular week each and every year. If you own week 20, then every single year you are guaranteed the right to occupy a unit, a specific one if you have a fixed unit, on Week 20. Each week is counted based on the check in day, so if the check in day is a Friday then you get the unit from the 20th Friday to the 21st Friday.
Benefits: You are guaranteed your unit for a specific week, especially valuable in high demand areas during peak seasons.
Drawbacks: You lack the flexibility for travel planning (which may be a good thing) since your week never changes. The higher the demand is for a particular week, the more you can be expected to pay.

If the timeshare offers a floating week, then you get the right to use the timeshare for a week during the specified season, called a float season, subject to availability of your unit type. If there is no availability, you are out of luck. Resorts vary in terms of lead time for reservations so check the fine print to see how soon you can reserve a week.
Benefits: Flexibility to plan your trip as you need to within a float season.
Drawbacks: If you plan to travel during peak season, you will need to plan in advance to secure a spot. You may also lose your week if availability dries up.

Fixed and floating weeks are the most common but some resorts offer a rotating week system. With a rotating week system, your usage week will change from year to year on a fixed schedule. If your schedule is every two years, then you may get Week X in year one, Week Y in year two, but then Week X again in year three.
Benefits: More guests have the opportunity to use the resort during the peak season, which will lower the purchase price.
Drawbacks: Depending on the complexity and length of the schedule, this could become hard to manage and remember. Also has the same drawbacks as a fixed week outlined above.

What: Ownership vs. Right To Use

Timeshare “ownership” comes in two forms: actual deeded interest and a lease, or “right to use” arrangement.

With an actual deeded interest, there is a fee simple transaction with the owner taking rights as a fractional owner of the unit. The deed is recorded with the local government and allows the owner the ability to transfer the deed, through sale, donation, bequest, etc.; just like their own home.

A “right to use” arrangement is different, and popular with vacation clubs, in that it’s more like a lease in that it allows the owner the right to use a unit for a specified period of time. After that time, usage rights return to the actual owner of the property. The owner of the lease has the right to give away, sell, or donate the contract but the expiration will remain the same. This is also popular in places where countries have restrictive property laws that restrict the ability of foreigners to own property.

The biggest difference between the two ownership types has to deal with ownership and operation of the resort itself. With deeded timeshares, the timeshare owners are the owners of the resort and usually operated it through an HOA. With “right to use” timeshares, the developer owns the property. The potential exists for the developer to raise maintenance fees, impose assessments, or essentially do whatever they want. With an HOA, the owners must vote and make their own decisions.

Timeshares are usually for a period of a week, though many developers are now offering “fractional ownership,” which refers to periods of longer than a week and may stretch into several months; and so one unit is thus “owned” by multiple owners for their use throughout the year. You can own a fixed week, a specific week each year, or a floating week, a week’s use anytime during the year subject to availability; or you can own a fixed unit, a specific unit each time, or a floating unit, any unit in the same unit category. As you can see, there is a lot of flexibility involved with the marketing of timeshares.

When you buy a timeshare from a developer, you typically pay a fixed purchase price and closing costs. This also puts you on the hook for an annual maintenance fee to cover upkeep and management as well as, usually, a per use fee whenever you book your week of use.

It’s become popular for resorts to join exchange company rosters so that you can deposit your weeks into the exchange company’s space bank and then exchange them for time at other resorts. The same vacation year in and year out may not be appealing for some so the exchange company affiliation adds flexibility. There is usually an exchange fee associated with each exchange plus not every week is created equally.