Reselling a timeshare can be costly challenge

Susan Foss of Salt Lake City says she bought a timeshare at Snowbird nine years ago for about $15,000. She is trying to sell it now for $6,000 — a 60 percent reduction in value.

Worse, "I've been trying to sell it for three years. I haven't had any takers. I hear that people are selling them for even less: $4,000 and $5,000."

She adds, "There are so many timeshares out there on the market that prices are just rock bottom. They (timeshares) are great, but you can find them from people like me for 50 percent or more off what resorts are selling them for. I wish we would have known that when we first bought."

Many timeshare owners find unpleasant surprises or abuses when they try to sell (just as they do when they buy and own, as previously explored in this series). Among major findings by the Deseret Morning News about problems selling are:

• It is rare for owners to avoid selling for a loss from what they paid developers, unless they have owned the property for a long time.

• While many developers promise customers that they will help resell their timeshare in the future, owners say few actually do — and invoke many contract catches to avoid it, or charge exorbitant commissions for any services they do offer. One even forces owners to pay it a full commission on sales whether it helps to sell units or not.

• Many resort companies have a first right of refusal on any offer on resales. They say that helps keep the value of all units at their resorts high by preventing too-low sales on the open market. But it also allows resorts themselves to buy back units at low cost and sell high. It also delays sales by owners trying to sell their timeshares.

Resales at a loss

As explored in the first part of this series, the value of a timeshare bought from a developer often drops by up to 40 percent or more immediately after buyers walk out of a sales office.

That is, in part, because developer prices include sales commissions and freebies, such as free trips and dinners, to lure potential owners to sales pitches. Most people who buy from resorts are unaware that they could have bought the same unit for pennies on the dollar on the resale market.

Bill Rogers, founder of the Timeshare Users Group, tells timeshare owners online why they often find their units are not worth as much as they hoped.