The last several decades have ushered in many changes in the roles that sellers, buyers and real estate agents play in property sales and transactions. The number of for-sale-by-owner real estate listings now rival those which are managed by licensed agents; many home buyers are utilizing access to the MLS (Multi-Listing Service) to search for properties themselves rather than enlisting the help of a professional realtor. Essentially, consumer access to once-privileged information and the ease of using online services has revolutionized the real estate industry.
These changing consumer real estate trends have not been limited to traditional residential real estate and commercial real estate transactions; they have had a significant impact on timeshare real estate transactions as well. Though many consumers do not realize it, buying, selling or renting timeshare often constitutes a legal real estate transaction that is not only binding but often regulated by law.
When a timeshare property is owned by deed (deeded ownership), it is considered "real" property. As such, many real estate laws (though not all) are applicable to timeshare owners in the same way they are to home owners. For instance, owners of deeded timeshares must pay property taxes on their vacation real estate. (Interestingly, however, even some current owners are unaware that they are paying taxes on their timeshare interest, because these taxes are often bundled with annual timeshare maintenance fees as one payment.)
Because deeded timeshares are legal property, they can be sold, rented, willed and inherited just like traditional real estate. If you inherit a timeshare, you will assume responsibility for any mortgage payments as well as the annual property taxes/maintenance fees, just as you would if you inherited a traditional home. Similarly, if you decide you do not want the timeshare vacation property, you are still responsible for these expenses until you sell the property and transfer the title to the new owner. Whether you decide to keep or sell timeshare property, you many wish to hire an attorney or work with a professional timeshare closing company to help you legally transfer the title of the timeshare from the deceased to you or the buyer. Click here for more information on what to do if you have inherited timeshare real estate.
A Note for Timeshare Real Estate Owners and Buyers: Not all timeshares are deeded - particularly outside of the United States. Non-deeded timeshares can be considered a real property interest, though in legal terms this form of ownership is more similar to a lease agreement as it represents a fixed time period during which you own the "right to use" the timeshare. If you live in the United States and plan to purchase timeshare real estate in another country, remember that timeshare contracts held in foreign countries are not protected under United States federal or state property laws. Be sure you understand the full terms of any timeshare contract before signing on the dotted line.
If you are thinking about buying a timeshare property as an investment (in order to make a profit when you sell it in years to come), think again. If you purchase directly from a developer, the initial price you pay will be inflated to cover the incurred marketing expenses. When you seek to resell this timeshare, you should expect to receive only about 20% to 70% of your initial purchase price, depending on the location, size and popularity of the resort property. Do not expect to make a profit or even to break even when you sell timeshare real estate that you bought straight-from-the-developer.
If you initially purchased on the resale market (directly from the previous timeshare owner), your outlook is a little more promising. Because timeshare resales are generally priced closer to the real market value than developer-sold timeshares, the price you initially paid will be similar to what you can expect to receive for its sale.
In the United States, the United Kingdom and other countries where the timeshare industry has become a prominent part of the travel sector, specific real estate laws and regulations have been created to protect consumers from shady timeshare transactions and companies. In the United States, the regulating authority is most commonly the Real Estate Commission in the state where the timeshare resort is located.
Most states (and most countries) now have laws governing timeshare sales and requiring an unalterable "rescission period." After a timeshare real estate contract is signed, the rescission period is the time during which the buyer can cancel the contract and obtain a refund with no penalties. The rescission period can range anywhere from several days to several weeks depending on country, state or local law.
Take Florida, for instance. Because Florida is home to the most timeshare resorts of any state in the U.S., they led the way in implementing laws regulating the timeshare real estate industry. The Florida Vacation Plan and Timesharing Act stipulates that the rescission period for timeshare contracts is 10 calendar days, provided the developer/seller is notified in writing. Timeshare closings processed before the 10 day rescission period are not legally binding. Click here for other examples of state regulation of timeshares.
Since selling or buying a timeshare is similar to a traditional real estate transaction, there are a number of options and resources available to you. Sellers can choose to advertise timeshare resales independently, through an online for-sale-by-owner service, or they can enlist the services of a professional timeshare broker to help them through the entire timeshare sales process. Similarly, buyers can choose to browse online advertisements and make offers independently, or they can hire a broker who can sift through properties, present them with those that match their budget and preferences and negotiate for them.
Whether you sell or buy timeshare real estate independently or through a timeshare broker or timeshare realtor, we recommend that all legal aspects of the timeshare closing and title transfer be handled by a closing company with timeshare specific experience. For a low cost, a closing company can handle the legal contracts, have them reviewed by a licensed attorney to ensure accuracy, and can hold the buyer's purchase sum in escrow until the sale is complete to ensure that the buyer gets what is advertised and the seller has a legitimately interested buyer.
To view available timeshare real estate for sale, CLICK HERE.
To speak with a timeshare property sales specialist about advertising with us, CLICK HERE.