Points to note when buying a timeshare
May 20th, 2009 at 10:04pm Under Timeshares
Buying timeshares can be rewarding for many people. It might be a money wheel for some and can be a profitable investment for many.
But the story doesn’t end there. While many people may reap the rich benefits of timeshares there are several others for whom the timeshare investment seems nothing more than a fraud, and dream resorts turned into nightmares.
Investing in a timeshare should always be done with high alertness and caution. Before signing a contract or a check always weigh both the benefits and the risks involved. If proper precautions are not taken, these money spinners can turn into money drains. Always read the fine print before signing a contract.
Timeshares are basically classified into deeded and non-deeded plans. In a deeded plan, an individual buys an ownership in a piece of real estate property. The owner usually gets the title of the property and the property is also inheritable by the heirs of the owner.
In a non-deeded plan or “right to use” plan, an individual buys a lease, a club membership or a license that lets you use the property for a specific amount of time each year and for a stated number of years. The rights of the timeshare owner ceases after the lease expires in right to use timeshare.
In both the cases the cost of the unit is directly proportional to the season of the year and length of time an individual wants to buy.
Everybody needs to take adequate care when making a major investment, and this applies in the case of buying a timeshare also. You must read all the documents carefully and understand fully what you are getting for your investment before signing any agreements or paying any fees. Professional advice might also be critical in big timeshare investments. So take expert advice from people who have bought timeshare before and/or your attorney.
Here is a checklist of what you should consider before buying a timeshare property.
1) If you are buying a timeshare from a timeshare resale company verify that they are licensed brokers. An easy way to verify this is by asking for the license number of the broker and verifying that with the State Department which deals with these kinds of transactions, which should know the history of the broker.
Be vigilant when you are considering buying a timeshare from a non-licensed firm, your money will be at risk as non-licensed firms don’t have much to lose, so greater chances of fraud exist.
2) Keep in mind that timeshares are for personal recreational use and do not expect profit or loss. A resale of your timeshare may or may not reap a good return.
3) If you are buying a “right to use” timeshare, watch out! If the sponsor declares bankruptcy, you may lose your rights.
4) If you are buying a timeshare in a property where the facilities have not been fully installed, make sure you get a written commitment from the seller that they will be finished in a specific amount of time.
5) Any claims made by the seller about the returns on the investment in timeshare should be questioned or discounted, because the future value of a timeshare depends on many factors.
6) Do not be impulsive when considering the purchase of a timeshare. Read each and every paper thoroughly. Take adequate time in researching, analyzing and making a decision to buy.
7) Never rely in word of mouth, either on the phone or face to face. Request everything in writing, especially promises that were made orally.
Try to find out whether the exchange program will be guaranteed or not. Sometimes it isn’t. So make sure to find out before buying. Buying a timeshare without an exchange program is not worth the money because you will get bored going to the same property every year, and also you will not have flexibility of scheduling if you don’t have an exchange facility.
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