How to get out of a timeshare, legally and with minimal cost
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It seemed like such a good idea at the time — a yearly vacation in a resort you love at a relatively low price. But at some point, you may realize your timeshare has you trapped.A whopping 85% of timeshare buyers regret their purchase, according to a University of Central Florida study. Owners cite expense, maintenance fees, intimidation and lack of use. Whether regret sets in immediately or slowly sinks in over the years, timeshares are notoriously difficult to sell.
How to get out of a timeshare
Some desperate owners have resorted to unwise ways to get out of their commitment, things like renting their unit (not allowed by most companies) and stopping payments (a hit on the owner’s credit score). But there are a few ways to get out safely and legally.1. When in doubt, act swiftlyIf your buyer’s remorse is immediate, there is usually a rescission period — a short window of time to change your mind and walk away without incurring a fee. It varies state by state (where the timeshare is located, not where you live), but it's usually between three and 15 days.2. Buy-back programsIn rare cases, the timeshare company will buy your timeshare back, but it’s unlikely you will recoup what you paid. In 2018, buyers paid an average of $21,455 per timeshare interval with an average annual maintenance fee of $1,000, which increases at an annual rate of 5%, according to the American Resort Development Association. If you are lucky enough to find a buyer, you can expect to sell for a fraction of the purchase price.3. Try to sell it outrightFirst check if your purchase agreement allows you to sell directly to a new owner. If your timeshare unitis eligible for resale, you can list it online, but beware of companies that charge big fees to list on an “exclusive” website. And it’s usually a good idea to consult your attorney. They can explain how to get out of the timeshare legally and without excessive cost.4. Ask for help from a professional exit companyThis one comes with a caveat: Make sure it’s a reputable company. Do your research (check business review sites or verified customer reviews) and find an organization with a proven track record of helping timeshare owners. Many resellers prey on the uninformed or vulnerable by taking money up front and then failing to deliver on the resale they promised.
Why getting out of a timeshare is so difficult
On top of the many hurdles mentioned above, supply and demand factors into why it’s tough to sell a timeshare. For example, a two-bedroom water view unit at a resort is not unique. There could be hundreds of identical units listed for sale at the same time. This creates a flooded resale market for sellers.
“The fact is, there are far more timeshares than people who want to buy them. If you’re in the desert and everyone’s thirsty, and there are only a few waters available, there’s a lot of demand for that product,” said Austin Allison, Pacaso founder and CEO. “But if you go somewhere that has a ton of water stands lining the street, buyers aren’t interested. That’s the real problem with timeshare resale.”
Pacaso is fundamentally different
Unlike timeshares that provide a pre-paid vacation unit that’s painfully difficult to get out of, Pacaso is true property ownership of a spectacular single-family second home. Using a proven LLC co-ownership model, the purchase process is familiar to any home buyer and the resale process is transparent and streamlined. If you’re thinking about your getaway options, consider a fundamentally different approach. Pacaso offers a modern way to co-own a second home.
Buying a vacation home has lots of upsides and some downs