Timeshare presentations include free cheap vacations, free gifts or free meals, including champagne breakfast, but not so fast. They are not really free. Because of the high pressure sales it is essential that you do your homework before attending a timeshare presentation, and please don’t buy on a whim.
The most important aspect of a time share presentation is to understand what you are NOT buying.
Understand the true meaning of a timeshare and read the contract before you sign under pressure. Most timeshare buyers buy under pressure while on vacation or walking through a mall, to get an invite to a high pressure sales presentation. I have spoken to many who have done this very thing and regretted it later.
The most common question I am asked is, “Should I buy a timeshare to save money on taxes and own a wonderful place to vacation”?
I talked to a friend who did tax audits and was assigned to an 8 inch thick stack of timeshare tax foreclosures. This prompted me to look further into the timeshare craze. Later, even going as far as to spend a week in a timeshare condo owned by a friend, I and a friend, attended a high pressure sales presentation ourselves.
The Definition of a Timeshare
The first thing you need to know is that when you purchase a time share you are purchasing the right to use a vacation room or condo typically for 1 week a year. This is if you purchase 1 unit. The quality of available condos go from type A to type D. A, of course being the nicest and best equipped.
You do not own a share of the building, you do not own a room, and you definitely don’t own the land that the condo is built on. What you buy is one unit of time or one week of time. Some people buy two weeks of time.
Typical Timeshare Cost
Understand what it means to sign a timeshare contract; you are promising to pay in full the contract price of the time share, the interest payment, and the yearly maintenance fee.
The payment is usually from 8-12 years. The yearly tax and maintenance cost is for life.
A lady ask me at a conference, “why did my timeshare company send me to collections”?
I told her, “you did not understand that you were purchasing the timeshare with a loan and lifetime maintenance cost when you signed the documents”. Of course, she said no.
For some strange reason most timeshare presentations don’t make it clear that the buyers have to pay maintenance for life, and the maintenance goes up over time. They assume you know you are signing for a loan.
When You Don’t Pay The Time Share Loan Principle And Interest Payments
If you don’t pay the time share principle and interest payments you will be sent to collections. When the balance is not paid from collections, you will be foreclosed on. If your time share is paid off and you do not make the yearly tax and maintenance cost your time share will be sold for back taxes.
How Most Buyers Find Out About Timeshares
They go on vacation, on a honeymoon, or just stay at a resort hotel. The company who owns the hotel may also own a timeshare unit building.
They will offer a free $100 bill, lunch, or dinner to coerce you into listening to a timeshare presentation, which is usually a high pressure sales presentation.
The company gets back the “free stuff” many times over when you make payments on the timeshare loan and the lifetime tax and maintenance cost. So, once again, you learn, there are “no free lunches”.
A Motivating Factor For Buying a Timeshare
High sales tactics make some buyers think they are actually purchasing ownership in a condo unit. Some people are motivated by the false tax savings.
Because of the ease at which you can purchase a timeshare many people who buy them do not itemize for tax savings. Also, they are in too low a tax bracket to actually receive a savings from the timeshare. The tax savings are tiny, almost non-existant.
For those in higher tax brackets the tax savings on a timeshare is too small to make a difference. Another reason people buy timeshares is because they enjoy the vacation swaps. This is when you can swap timeshares with others, to vacation in different locations. Some timeshare presentation vacations sales are simply fake.
When Buyers Falter On Their Time Share Payments
Judging from conversations I have had with timeshare owners many don’t understand their obligations because:
1. They signed up under pressure – did not read the contract.
2. The sign up was quick and didn’t understand what they are buying.
3. Some are young and gullible, so they sign up without the knowledge of contracts.
4. Many people don’t understand that they have to pay taxes and maintenance cost every year for life. This is necessary to use the timeshare “time” alloted to them for the year.
The best way to get out of your timeshare contract during or after your vacation is to realize you usually have a 3 day right of rescission on contracts. That must be in writing, preferably notarized, and sent next day mail, certified. Rarely, does anyone realize this, or use this tactic.
Typical charges of a Timeshare
I have friends who bought a time share 16 years ago, they said they purchased theirs for $17,000. Most of the 16 years their yearly tax and maintenance costs were $500 per year, a year ago it changed to $1000 per year. The timeshares are much more expensive now.
That is a class A Timeshare, the highest value. Let me remind you again that you are “only buying” time to use a space, “not” any real estate.
Currently, a typical Class A time share is in the area of $25,000 principle or more, plus interest, and $1000 per year (lifetime) payments for tax and maintenance. There are different packages available.
Selling A Timeshare Condo
Selling a timeshare is difficult because you don’t have the same high pressure sales tactic abilities that enabled you to sign. The market for used timeshare contracts is tiny almost non-existant. You are competing against current new timeshare sales. The first place you should start to sell your timeshare is to contact your timeshare company “in writing”, that you purchased from. They will usually charge you a small fee to take it back.
There are companies who promise to “exit your timeshare contracts”, and they may be helpful. Do your homework, and make sure the company is legitimate. In recent news reports many who have used these companies say were ripped off, and their contract was still in tact after they paid the company.
The organizations representing timeshares say it is best to negotiate directly with your timeshare company to get released from your contract.
You do not have the expertise to do a timeshare presentation on timeshare vacations – to sell it on your own. Don’t make an unwanted timeshare a lifetime timeshare obligation.
Lois Center-Shabazz | Course Delta Agency
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