top of page
Marble Surface
  • davidbates4

What You Need To Know Before Selling A Timeshare

Updated: Mar 29, 2022

This article is provided for educational purposes to understand how to sell your timeshare. Before putting your timeshare on the market, you must understand what you must disclose to your buyer.

Have you ever read your purchase agreement?

98% of timeshare owners have never read their purchase agreement. You have a legal and ethical obligation to disclose all terms, conditions, and liabilities to your potential buyer. What you need to disclose will be our focal point.

Timeshare For Sale
Timeshare For Sale

What Does The Resort Require To Allow You To Sell Your Timeshare?

Your resort has three requirements:

  1. If your timeshare carries a loan balance under contract, your developer will not allow you to sell the timeshare unless the balance is satisfied. Throughout this article, we’ll help you understand how to overcome this obstacle.

  2. You have to be current with your Maintenance Fees and loan payments.

  3. You have to help your buyer find a financing company.

Timeshares are considered Fractional Interests of Ownership with Rights to use the property. However, they do not hold property value, making the timeshare an unsecured asset.

Therefore, banks will not lend you money for a timeshare purchase. Should the borrower default on the loan, the bank cannot foreclose the timeshare because it belongs to the developer.

What you own is the fractional interest of the property “with the right to use,” which is the week that you have to use. It becomes a high-risk loan to the bank. Some private lenders will approve your buyer for a loan at a high-interest rate.

Private lenders also tend to charge an approval fee to your buyer from $500 to $1,000, depending on the size of the loan. Finding a cash buyer would be ideal.

According to data from the Federal Reserve Survey of Consumer Finances, U.S. households’ median checking account balance was $2,900.

80% of potential buyers will need to get a loan to buy your timeshare.

Buy A Timeshare
Right of First Refusal

Your Resort Has The Right To Deny Your Right To Sell Your Timeshare.

Let’s pretend that you find someone that gets approved for a loan or has the money to buy the timeshare. The purchase agreement you have with your timeshare has a section called RIGHT OF FIRST REFUSAL, which reads, “developer as the true and only owner of the property has the right to deny the sale brought upon by the member.”

Were you aware the resort has the right to choose your buyer? The resort’s Management Company would require a personal and financial background check on the buyer.

If they feel the buyer presents a liability, they can deny the sale, forcing you to keep the timeshare or find someone else that qualifies their standards.

Timeshares Are Exclusive Memberships, Not Ownership Of Property

Many people purchase the timeshare with the understanding that the timeshare is a property that can be sold or rented to anyone of their choice.

Suppose you get a chance to read your contract. In that case, it reads, “Purchaser acknowledges, the purchase of a timeshare is not for commercial or investment purposes and does not have any future market value or resale potential. The purchase of a timeshare is to be considered for enjoyment purposes only.”

Therefore, the contract clarifies that the timeshare is an exclusive membership, not property, so you have to be very careful how you present the timeshare at the point of sale.

Yes, it’s a Fractional Interest of Ownership, but it’s not to be sold or purchased as a Real Estate investment because you bought the “right to use” of the property, not the actual property.

Does it make sense why you need to understand what you must disclose to the buyer before putting your timeshare on the market?

You need to be aware of other terms in your contract before selling.

Timeshare Resort Has The Legal Right To Change The Terms Of The Contract Without The Member’s Consent

Such as, the developer can change the terms of the contract without the members’ consent. The agreement also allows the resort to charge Special Assessment Fees, which can be $1,000 to $3,000, to help them make up for renovations to the timeshare or unpaid balances by other members.

All terms shared in this article can be found in your contract, and we encourage you to read your contract before putting your timeshare on the market.

Maintenance Fees Go Up Every Year

Many complain that their Maintenance Fees go up every year. Your purchase agreement states that the developer has the legal right to increase Maintenance Fees, which averages 7% to 10% a year throughout the membership’s lifetime, allowing the resorts to double your Maintenance Fees every 5 to 10 years legally.

The Maintenance Fee increase is significant to disclose to your buyer. They have to be aware that their Maintenance fees will go up every year. You can always hire a timeshare attorney.

Timeshare Lawyers can draft a purchase agreement that will disclose all of the terms in your contract to protect you as the private seller legally. Timeshare Lawyers typically charge $1,000 to $2,000 to draft a purchase agreement for you.

The last two points you must disclose to your buyer may become deal breakers.

The Heirs Of The Timeshare Member Will Have To Inherit The Financial Obligations Under The Contract.

Many people purchase the timeshare with the intention to use it, allow their family and friends to enjoy it, and understand that should you want to sell or rent your timeshare, you could.

Many people purchased the timeshare understanding that you may will your timeshare to your heirs and even make it part of the estate or the family trust.

At this point, you have learned this is an exclusive membership, not property. Every timeshare contract has a clause that reads, “Upon the members’ death, the member agrees to allow the resort to pursue any contractual financial responsibilities with their heirs.

God forbid something happened to you today; your heirs automatically become responsible for the contract’s loan payments and maintenance fees.

Here’s your argument; my heirs never signed this contract, which is true. However, the resort’s Attorney will argue that you and anyone else who signed this contract have agreed to allow the resort to pursue any contractual financial responsibilities with their heirs.

Although this may be considered unethical, it’s in writing, and you signed it, making it a legally binding agreement. Therefore a court would render a judgment in the resort’s favor and hold your heirs responsible for continuing to pay for the timeshare.

Legal and Financial Consequences For Breach Of Contract

Has it crossed your mind to stop paying the resort to see if they would take it back if you can’t sell this timeshare?

Some people get to a point where they realize that selling the timeshare becomes extremely difficult, and they think not making payments will solve the issue. We would not recommend you or anyone to consider defaulting on a timeshare contract, and here’s why.

When we own a home, which is actual ownership of the real estate if you stop making your mortgage payments, common sense, what will the bank do?

Eventually, the bank will foreclose on the property. As you’re learning, this is an exclusive membership, NOT property. There’s nothing for the resort to foreclose as they already own the property.

Therefore if you stop making payments, the timeshare resort may sue you for a deficiency of judgment if there’s a loan balance. They may also sue you for “projected earnings” of maintenance fees that the resort would have earned under contract.

Lawyers for timeshare resorts would go to your County Court House and show the Judge a copy of the contract, your signature on the contract, and your initials. Lawyers for timeshare developers will prove that you’ve acknowledged the terms of the agreement and agreed to pay Maintenance Fees for the lifetime of your membership.

The resort cannot quantify a lifetime of payments. Still, a court would render a judgment to the timeshare resort for projected earnings, allowing the resort to sue you for the amount they would’ve earned under contract.

Your heirs would inherit the financial responsibility should something happen to you. We do not recommend anyone to walk away from a timeshare contract for these reasons.

The point behind this information is to help you understand that as a private seller, it becomes your responsibility to disclose to your potential buyer everything that I have disclosed thus far.


Most states require private sellers to provide a prospective buyer with certain disclosures, often in what’s called a public offering statement or a timeshare disclosure statement.

Under the law, you have to ethically disclose to your potential buyer EVERYTHING that I just conveyed to you.

After what you’ve learned today, you have two options.

Selling your timeshare using social media is a great tool to promote your timeshare; you can put pictures and describe your timeshare. Here’s the challenge.

It is out of the question to ask someone to pay you what the resort sells them for today or the amount you paid initially. As you may have, people who spend a premium are individuals who attend a timeshare presentation and present that the discounted price is only available today!

When people purchase a timeshare on the resale market, they are not buying the home resort. People nowadays buy a timeshare to have the ability and flexibility to travel to different destinations. Therefore, the rule of thumb is to price your timeshare at $3,000 to $5,000, which is the realistic price range.

You’d be fortunate if someone would pay $5,000. With the internet, people are more informed, and should someone do research; they’ll find out that on eBay, timeshares purchased at $40,000 are selling for as little as $100.

Other factors to consider, such as title fees, attorney fees, and lending fees, will bring down your total amount earned from the sale of your timeshare. Selling your timeshare at a significant loss is one option.

The second option is to convince the resort to allow you to surrender your timeshare. Of course, the timeshare resort would not reimburse you for the money you paid. The benefit of this approach is that you may get a tax deduction.

Many people see this as a better option. To get $5,000 for your timeshare or get a tax deduction would be a much better option if your goal is to get rid of the timeshare and receive some level of financial compensation.

If you’d like to look into either of these options, we have a network of professionals that can provide you with such services.

You’re more than welcome to contact our office to provide you with a FREE CONSULTATION at 754-260-1603

11 views0 comments


bottom of page