5 Smart Steps to Get Out of a Timeshare
Timeshares may be a fun vacation option for a while, but sometimes people want to end the arrangement. Those time share contracts, however, can seem pretty ironclad.
Whether you want out due to buyer’s remorse, a shift in your financial situation or health, or any other reason, here’s some good news: You’re not necessarily stuck.
If you change your mind soon after the purchase, for instance, you might be able to opt out during the “rescission period.”
Those who have had their timeshare for years can have alternatives, including having the resort take it back or perhaps re-selling it.
There are also what are known as “exit” companies that help timeshare owners get released from their agreements (though it’s important to vet those companies before signing an agreement).
If you’re ready to say goodbye to your vacation place, read on to learn steps for legally getting out of a timeshare contract.
5 Steps to Escaping a Timeshare
If you’re thinking about getting out of a timeshare or know you’re ready to make a change, here are five options to consider.
1. Checking the Rescission Period
If your second thoughts occur within several days of your purchase, you may be able to rescind the transaction if you’re still within the “rescission period.”
If you are, you should be able to get your money back and go on your merry way.
Keep in mind, however, that the rules vary from one state to the next.
Depending on the state where the timeshare is located, rescission periods can be anywhere from three days (the minimum required by the Federal Trade Commission) to two weeks.
In some cases, the rescission period may kick in as soon as you buy the timeshare. In others, it might start when you receive the public offering statement that includes general information about the timeshare.
For a timeshare on an exotic isle somewhere outside the U.S., you’ll need to find out what the laws are there.
If you’re eligible for rescission, you’ll want to follow the instructions in the documents you received when you purchased your timeshare.
Most likely you’ll need to send the resort a letter telling them you want out via rescission for a full refund.
It’s a good idea to send this letter using certified or registered mail.
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2. Contacting the Timeshare Resort
If rescission isn’t possible because too much time has passed, another option you may be able to take advantage of is a “deed back” program.
Also known as “take-back” and “surrender” programs, these programs allow distressed owners to give their timeshares back to the resort developer, often for a fee of a couple of hundred dollars or so.
To find out if your developer offers this type of program, you may want to contact them directly and ask to speak with someone who handles “deed-backs” or “surrenders.”
You can also check online resources like ResponsibleExit.com for information about return programs.
Generally, developers will only go for this if the timeshare is fully paid for, and you’re up to date on your maintenance fees.
Some developers that accept returns may require owners to pay annual fees for a year or two while the resort finds another buyer.
In some cases, you may have to prove financial or medical hardship in order to qualify for a take-back program.
Even if your resort doesn’t have an official take-back program, you have nothing to lose by asking. Who knows; they might go for it.
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3. Reselling The Timeshare Yourself
If you’re considering reselling your timeshare, it’s probably best if you don’t go into it with hopes of making a killing.
There are typically many people looking to unload their timeshares and demand isn’t generally high, unless your property is in a hot destination.
As a result, reselling can often be a losing proposition.
The best approach might be to think of reselling as someone taking the timeshare off your hands and becoming responsible for the fees moving forward, rather than making a profit.
You can list your timeshare on a general resale marketplace site, such as eBay and Craigslist. There are also sites just for timeshares, such as TUG (the website for the Timeshare Users Group) and RedWeek .
💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.
4. Reselling the Timeshare Through a Broker
If you opt to resell your timeshare, another option is to hire a real estate broker or agent who specializes in reselling timeshares.
If you choose this route, however, you’ll want to pick your broker carefully, cautions the Federal Trade Commission (FTC) .
Some real estate brokers and agents who specialize in reselling timeshares may falsely claim the market in your area is hot and that they’re overwhelmed with buyer requests.
They may even tell you that they already have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.
It’s wise to be skeptical of all such claims, says the FTC, and also to vet the reseller before agreeing to anything on the phone or in writing.
A good safeguard is to contact the state Attorney General and local consumer protection agencies in the state where the reseller is located, and ask if any complaints are on file. You also can search online for complaints.
You may also want to ask the reselling agency if their agents are licensed to sell real estate where your timeshare is located. If they say they are, you may want to verify it with the state’s Real Estate Commission.
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Other questions you may want to ask before hiring a reselling agent:
• How do you plan to advertise and promote the timeshare unit?
• Will I get progress reports and, if so, how often?
• What fees do you charge, and when do they have to be paid?
It’s generally preferable to do business with a reseller that takes its fee (or commission) only after the timeshare is sold.
If you must pay a fee in advance, however, it’s wise to ask about refunds, and to get all refund policies and promises in writing.
💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.
5. Hiring a Timeshare Exit Company
The concept is good. With a timeshare exit company you often get a small army to handle your business.
A good one knows the inner workings of the timeshare industry, which could be advantageous to you.
One major caveat is that these services generally don’t come cheap–prices vary considerably, but can be as high as $4,500.
It’s also important to be aware that there are many bad apples out there. There have been numerous lawsuits against timeshare exit companies that backed out of their payment agreements with customers.
To help ensure that an exit company you’re thinking about hiring is reputable, you may want to check with the Better Business Bureau, and also search online, to see if there have been complaints about the company and (most importantly) how they have handled those complaints.
You can also protect yourself by refusing to make any payments before a contract has been signed by both parties.
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Unloading a timeshare property isn’t always easy, but some of your exit options include: backing out during the “rescission period,” reselling it yourself, hiring a broker to resell it for you, and hiring a timeshare exit company to take care of the whole separation process.
It’s important to understand all of your options (and the potential pitfalls of each) in order to choose the best solution for your situation.
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