If you're a timeshare owner looking to get rid of your property, you're probably aware that it's easier to exit ownership once you've paid off your timeshare. But just because it's easier doesn't make it easy or even possible through most timeshare companies.
Like in real estate, selling a timeshare property you've paid off makes it so you don't have to pay your lender any money made from the sale. However, there are many factors that make selling a paid off timeshare much harder than selling a regular property — the main one being the strict policies of timeshare companies.
Timeshare developers want you to keep your timeshare for life. They want to continue getting money from you even after your property is paid off. Far after you've made the last of your timeshare mortgage payments, they want to continue profiting off your annual maintenance fees and other costs associated with owning a timeshare. Since timeshare companies make it so challenging, here's your guide on Timeshare compliance that is paid off.
How to Sell a Timeshare That Is Paid Off
If you are looking to pursue timeshare cancellation with a paid off timeshare, we have some good news for you. Selling a timeshare is much easier when you no longer have mortgage payments with high interest rates to worry about — but it's still no easy feat.
Before we tell you how to sell a timeshare that is paid off, be warned that the process is very challenging. You can't just go to your timeshare company and tell them you want to sell your timeshare back. If it was that easy, the American Resort Development Association (ARDA) would not report the timeshare industry to be worth $10.5 billion. Developers make it hard to get out of a timeshare contract even when they're paid off.
If you want to face the challenge and try to sell your timeshare, here are your options.
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A deedback program is a service offered by some timeshare companies where you can sell your paid-off timeshare back to them. But it’s not as simple as it seems. Companies aren’t very vocal about having buyback programs because they don’t want to stop making money off their customers.
Even after you’ve paid off the mortgage for your property, you still have ongoing timeshare fees that you’ll never stop paying to your developer. This includes timeshare maintenance fees that go toward the upkeep of your resort as well as membership fees if you belong to a timeshare exchange program.
Not only do timeshare companies have an incentive to not tell you about their buyback programs, very few companies even offer this as an option for timeshare owners. If you are trying to figure out how to sell a timeshare that is paid off, take a good look at your timeshare contract. If there is nothing in your contract that mentions a deedback option, or if your company doesn’t even have a program for buying back deeded timeshares, your resort is probably not going to buy the property back from you.
If you’re not sure whether selling your timeshare back is an option, a good starting point is placing a phone call to the Home Owners Association (HOA) . They’ll let you know if your developer has a deedback program and if you’re eligible for it.
Resorts will usually deny your request to sell back your timeshare at first, so convincing them to accept the deal may be challenging. Some developers require that you’ve gone through a major life change, such as death of a family member or drastic loss of income. Many also charge fees in the thousands, and they drag out for months, if not years.
If you find out that your timeshare developer does have a deedback program that you are allowed to use, you’ll need to start the process by filling out a timeshare transfer form. You’ll also need to attain a quitclaim deed, which is a document that proves that you own interest in the property you are trying to sell. You also need to provide your developer with the following:
Copy of your original deed
Waiver of right of first refusal
Proof that mortgage is paid off
Timeshare transfer fees
Additional deedback documents
Closing payments ranging from $3,000-$5,000
The Problem With Deedbacks
If your timeshare developer offers a deedback program, why isn’t this always the solution for how to sell a timeshare that is paid off? Because it doesn’t tend to work in the seller’s favor.
For one, you aren’t really selling your property. When you tell your timeshare developer, “I want to sell my timeshare back to you,” you’re basically just giving your timeshare away to them. There is no real sale because in the vast majority of situations, timeshare owners don’t earn any money from deeding back their timeshare.
When you sell your timeshare property back to your developer, you are simply transferring ownership back to them. You will rarely make a profit off the transaction and will often have to pay a transfer fee. The only gain you get from the transaction is knowing that you're no longer obligated to pay maintenance fees. In fact, your resort is essentially doing you in favor by taking back the timeshare.
Look at it this way: Timeshare companies build new units all the time. Their salespeople find first-time buyers who are willing to pay the high sale prices on brand-new units. Why would they want to purchase a used unit with a lower resale value when they can make much more money on the upfront fees they get from new timeshare purchases?