By Elliot Raphaelson,
Tribune Content Agency, The Savings Game
It is no secret that many who have purchased timeshares no longer wish to own them for a variety of reasons. One major reason is the obligation to pay a yearly maintenance fee, even if you don’t use your timeshare. Those fees often rise considerably over time.
According to the National Timeshare Owners Association (NTOA), the average annual maintenance fee at the end of 2014 in the U.S. was $881. According to Gregory Crist, the association’s CEO: “As a timeshare owner, you are legally required to pay that fee. Otherwise, if you default, you can be taken to court, and a judgment will be entered against you along with foreclosure proceedings.”
What are your realistic options? You can sell it or you can donate it to charity.
The Better Business Bureau has been warning timeshare owners for years about timeshare resale scams, including companies that front as charities. One warning sign of a scam is a company that charges an advance fee for transferring a timeshare donation.
If you are interested in selling your timeshare, NTOA’s website (ntoassoc.com) identifies creliable companies and resources for you to work with and offers a free owner assistance helpline (844-ASK-NTOA). If you use a company to sell your timeshare, only consider those that charge a fee after the timeshare is sold.
Crist recommends Sharket.com to obtain a realistic value of your timeshare. You can find the likely value of your timeshare based on prior resale history. If the value is significant, you can consider selling the unit. If the property has no resale value, consider donating the unit to charity.
Another resource is a subscription service from BuyaTimeshare.com. The company offers many options, including assistance in selling your timeshare, renting it and/or donating it to charity. Yet another resource is Redweek.com. With a membership fee of $14.99 for 12 months, Redweek offers low cost for-sale-by-owner listings for $59.95 for 12 months.
The Redweek site contains an excellent four-part series discussing timeshare donations, sales and rentals, along with their tax implications. The series makes the point that if you want to maximize the proceeds of disposing of your timeshare week, it “almost never makes sense” to donate it. If you sell the unit, you will receive 100 percent of the sales price minus sales commission. If you donate the unit, and you are in the 28 percent tax bracket, your tax savings will be only 28 percent of the value of the unit.
Take into consideration the probability of actually selling the unit, and the additional cost of advertising to sell it (as opposed to donating it). If you determine, from Sharket.com, that the unit is worth a substantial amount, then there is a higher probability of being able to sell the unit than if your unit has a very low value. It doesn’t make a lot of sense to spend a lot on advertising a unit if the expected value is incidental.
And for many timeshare owners, the resale value is a fraction of what they paid originally.
There are thousands of timeshare resale units being offered for sale in the secondary market. Take the time to educate yourself on which options are best for you to dispose of your timeshare. If you have tried selling your timeshare without success, then seriously consider donating it. The after-tax saving may not be significant, but at least you will no longer have to pay the yearly maintenance fee, which is likely to increase.
(Elliot Raphaelson welcomes your questions and comments at email@example.com.)
(c) 2015 ELLIOT RAPHAELSON. DISTRIBUTED BY TRIBUNE CONTENT AGENCY, LLC