Buyer Questions

Information About Buying a Timeshare
 

What is timeshare?

Timesharing or vacation ownership is a term that describes a method of use and ownership of a particular resort property. It normally allows you to use the property for a certain period of time each year.  You pay an initial investment for the timeshare and then you will pay a maintenance fee each year for the upkeep of the timeshare.

What are maintenance fees?

Maintenance fees are the cost to operate the resort.  This fee is divided up amongst all resort owners.  A portion of the maintenance fee is to build up reserves to pay for the non-recurring costs like furniture and appliances.  A reserve is also typically set up to pay for other capital costs incurred because of physical deterioration.  When a developer is still selling in a resort the fees may be subsidized and are subject to increase after the homeowner association takes over the association.  Some states regulate how much is kept in reserve for future spending.

What are maintenance fees costs?

Maintenance fees will vary from $300-$1000+. They will vary from resort to resort depending on location, size of unit, amount of amenities etc. There are occasionally special assessments charged to handle a specific problem at a resort that has not been funded.

What's the difference buying a timeshare in the resale market instead of a developer week?

When you purchase a timeshare from the developer you will be paying for all of the marketing that has been done to sell the timeshare.  Buying resale you will generally have a savings of 40% or more.  Also, while many hotel timeshare developers include their “hotel rewards” programs when buying in the resale market - some do not. When this is the case,  you must decide if the "rewards" part of the program is worth several thousand dollars more to you.  Your resale specialist can provide details on which “rewards” programs are included.

What's the difference between a floating week and a fixed week?

A fixed week is a set week in a set unit that you will occupy every year.  The value of this ownership is that you will know which unit you will be using and where you will be going.  If you decide not to use the week you can make it a "floating week" for that year by depositing it into the exchange system.  You will pay an exchange fee to do this.

Floating weeks are determined differently at every resort and you want to make sure if the week is floating the entire year or if there are seasons to which your week usage is assigned.  Floating allows you the option of calling to schedule your week without paying a fee.  It is still based on availability.  If you are not using it at your home resort then you will need to schedule a week with the resort and deposit the week with the exchange company.

Another term,  flex week,  means that your week is fixed unless you call to exchange it.  This allows you the priority of using a certain unit but the privilege of exchanging within the resort during a certain period without paying a fee.

What about timeshare points? How do these work?

Timeshare point systems are an evolutionary product of the timeshare industry. Timeshare point programs typically vary from resort company to resort company. Timeshare points provide the buyer with a form of "currency" that based on the number of points one purchases - resort owners can vary their length of stays from daily to weekly holdays, bedroom accommodation sizes, as well just how many days a year they have available to them based on whether the owner elects to travel during the peak season or off season.

In other words, timeshare point systems allow you to break up your point package to several three or four day holidays during the year at different times. Or you may choose to take the full package of points you have an take an extended vacation of seven to ten days - all at one time. 

Also worth noting, timeshare developer point programs are different than RCI Points described elsewhere in this article.

What is a "lock off" villa?

There are two types of lock off units.  It is very important to determine which type you are buying.  A lock off unit allows your unit to be used for two weeks of vacationing.  You may use one week at the resort and exchange one week someplace else.  You may use one week and rent out one week.  Generally if you own a 2 bedroom lock off you will trade for two one bedroom units.  Sometimes the lock off side does not trade through the exchange company.  It is important to check with the exchange company to make sure you are buying an exchangeable lock off.

What differences are there between a leased timeshare property and a deeded timeshare property?

A leased property is a right to use and will expire in a certain number of years.  Those years can be from 20 to 99.  It is important to verify that you can transfer your property if it is a right to use property.  A deeded property means that you have a deed for the rest of your life and your heirs will inherit the property.

What fees will I incur when buying a timeshare?

The fees include:

initial purchase of the timeshare, closing costs, sometimes a membership transfer fee, and annual membership fee with the exchange company.
 

What are demand seasons within timeshare resorts?

Demand times are depicted by the exchange companies in colors.  RCI color codes are red, white and blue pertaining to exchanging during certain times of the year for each resort based on how high the demand is for time of year.

Red = Greater Demand
White = Average Demand
Blue = Lesser Demand

For Interval International (II), the same concept applies, but the II colors for the same seasonal demand periods, are Red, Yellow, and Green. 

What is a timeshare exchange or trade?

An exchange is the depositing of your week with an exchange and then the requesting of a week to use in place of the week you are depositing.  The exchange company does not have to find someone to use your week before they will give you an exchange. Once you deposit the week you are done with it. It is very important to deposit your week early to have more power with your week.  Each exchange company has slightly different rules for exchanging.  There is a fee involved in exchanging your week. 

Why are timeshare prices so much lower in the resale market?

There are a couple of reasons for this.  When your purchase from the developer you are paying the marketing fees for the developer.  These are generally around 50% of the sales price. When the unit goes on the resale market the client has hopefully enjoyed the benefit of the timeshare for a few years so he benefits by use but not financially.  When you buy a resale you will benefit from the use but you will also benefit financially.

Prices are based on supply and demand.  When you have a large resort with several thousand owners there will generally be a number of timeshares on the market.  That will keep the prices lower.

How do I select a company to buy from a resale from?

In general, many buyers are more comfortable dealing directly with a licensed real estate broker. Doing so provides the buyer with an added level of confidence that they are dealing with an industry professional charged with being knowledgeable about the product that the licensed agent is representing. A licensed broker can also streamline the documentation and escrow process for buyer and seller - making the purchasing process relatively simple.

While many timeshares are sold directly between buyer and seller, potential buyers are encouraged  do the proper "due diligence" or discovery to assure that they know what they are purchasing. While most sellers have a very good understanding of what they own and how it works - potential buyers will be well served in doing the proper research before entering into the purchsase transactiion. 

What should I watch out for when buying a resale timeshare?

You will want to make sure the property is free and clear of all encumbrances. This includes that maintenance fees, taxes, and all mortgages are paid and satisfied. 

Just as when buying residential real estate, it is advisable to use a closing attorney or respected closing agent. Additionally, many states require that a real estate attorney is involved in the transaction in order to protect all parties interest. Doing so will provide you with the necessary closing services that will assure that all of the above are satisfied. 

Are pets allowed at timeshare resorts?

Not usually. While most resorts do not have a pet friendly policy,  there are a few pet friendly timeshare properties throughout the world.

Are timeshares bigger than a hotel room?

Timeshare accommodations are quite varied in size-  timeshare villas range in scale from a hotel room to as large as a 4 bedroom unit.  In the United States, most developers have developed timeshares with two bedrooms and two baths - giving you plenty of room to stretch out in when on holiday.
 

Your Source for Answers When You Need Timeshare Info

Whether you wish to buy, sell, or rent; TimeshareMyWay.com is your source for accurate information.