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Travel Scams FAQ
We just returned from Hawaii, where we were constantly solicited to buy a timeshare. Are these deals as good as they sound?
Probably not. The great majority of all timeshare owners never intended to buy in the first place. Instead, they were swept away by high pressure sales pitches and cleverly disguised promotions.
The idea behind a timeshare is simple: for a one-time price plus an annual maintenance fee, you can buy the right to use a given vacation property for a certain amount of time (typically one week) each year. What you may not be told is the extent to which the annual maintenance fee will increase over time. For example, one timeshare owner in Hawaii saw her annual maintenance fees climb 76% in six years. Timeshare operators also may force owners to pay unexpected special assessment fees, sometimes as high as $1,000. And that's just for normal repairs.
Timeshares are not necessarily convenient, economical or a good investment for you. Some require you to decide two years in advance which week you want to use it. Sometimes annual fees rise to equal the amount you would spend renting for a week -- so there's no savings. You're tied down to one location and one operating company, although many companies allow you to trade your week for a week at another facility. While a timeshare has the potential to be a satisfactory arrangement, it often yields a variety of pitfalls and frustrations for the unwary purchaser.
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I've been told that I shouldn't by a timeshare because it will be hard to sell it later. Is this true?
Very likely, yes. Timeshare owners face a few difficulties when they try to sell. The first hurdle is the lack of a strong resale market. Although statistics vary, all studies show that there are many more timeshare owners wanting to sell than there are buyers.
Another problem is the likelihood that you will lose money on the sale of a timeshare. The original price of a timeshare may have included premiums of up to 40% to cover sales costs. Also, timeshare properties age and can become less desirable. So, your resale price may be anywhere from 20% to 60% of the original purchase price -- plus you will have to pay a commission to the broker (often as high as 20% of the resale price) who sells the property for you.
Is it possible to get out of a timeshare after signing a contract?
Maybe. Most states have "cooling-off" laws; these let you get out of a timeshare contract if you act within a few days after signing (three to ten, depending on the state). If there is no cooling-off period, or if you change your mind after the time has passed, your only recourse may be a formal lawsuit. Timeshare sellers are accustomed to handling claims from unhappy buyers and are unlikely to refund your money unless forced to do so. However, lawsuits can be expensive -- you may be "out of pocket" even if you win.
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