Stop by almost any timeshare forum and you’ll find discussion about purchasing a timeshare for $1 on for-sale-by-owner websites like eBay and Craigslist. These days, you’ll even find sellers advertising their property on personal Facebook pages! So what’s the deal? Why are there timeshares available for $1, and is it a good idea to buy timeshare from owners on FSBO sites?
The primary reason you’ll find timeshares for sale at such drastic discounts (often listed for $1 – $100) is because the current owners are no longer able to afford their maintenance fees and simply want the property off their hands. Sounds great, right? Well, that depends.
The truth is, there are some great timeshares available on FSBO websites; but there are almost always strings attached. The trick is to research carefully and ask the right questions. Knowing which questions to ask comes from knowing the challenges associated with buying and selling timeshares this way. Here are a few key questions to ask FSBO owners, along with a brief explanation of why they’re important.
Is the deed paid in full? This one’s important. If the deed isn’t paid in full, you’re not getting a timeshare for $1, you’re inheriting a debt. If the amount owed is still acceptable to you as a purchase price for a timeshare – great! But, if it’s more than you were looking to pay, or if there are any penalties associated with late or missed payments, you might want to consider purchasing a timeshare whose deed is paid in full.
Are there any maintenance fees or penalties owed? This one is in line with the previous question. If the owner is selling their timeshare for $1, chances are he or she is having trouble making their maintenance fees. Find out from the seller if there are any maintenance fees or penalties for non-payment associated with the account. If there is remaining debt, who is responsible? Will the seller take care of the remaining balance, or will you inherit that deficit?
Who’s paying the closing costs? Just like traditional real-estate, when a timeshare deed is transferred from one owner to another, there are administrative costs associated with everything from document preparation to taxes. Closing costs may comprise origination fees, title search and title insurance fees, discount fees, survey fees, appraisal fees, attorney’s fees, credit report fees and prepaid expenses such as insurance and taxes. As a buyer in an FSBO transaction, it’s important to discuss who’ll be covering these costs, and how much they’ll amount to.
What is the escrow process? If you and the seller determine that you’ll be responsible for the closing costs, who will conduct your closing and where will the money be held?
Is the contract of sale valid? Finally, be sure the owner actually has the right to sell their timeshare. Ask to see their contract. In some cases, an owner is not legally entitled to conduct the sale of their timeshare property, so any contract you sign may be invalid. It’s a good idea to hire a lawyer to take a look at all associated contracts and paperwork.
The above questions might sound like a lot, but it’s extremely important to have all the facts before purchasing any kind of vacation ownership from a previous owner. If all this sounds too complicated, or if you’re looking for a way to streamline the buying process, you may want to work with a licensed timeshare broker like Timeshare Broker Sales, who can help you though every step of the process.