Purchasing Timeshares

A timesharing agreement allows you to utilize a property for a set, predetermined period of time.

Houses, condos, chalets, studio apartments, cabins, and other real estate forms are used for timeshares.

Do Different Timesharing Plans Come in Different Forms?

Deeded and non-deeded timesharing agreements are the two basic varieties. You purchase a real estate ownership stake when you purchase a deeded timeshare. In a non-deeded timeshare, you purchase a lease, license, or club membership that entitles you to use the property for a predetermined time every year for a predetermined number of years.

The price of your unit depends on the season and duration you want to purchase under both timeshare schemes. A winter week is probably more valuable in a warm region than a summer one.

What Elements Should I Take into Account Before Buying a Timeshare?

Practically speaking, you might consider a few things when deciding whether you’ll be able to use a timeshare facility frequently. See if the properties have flexible use plans that you can consider.

Consider whether the club has enough units at the sites you choose to provide you the chance to use them if you are contemplating a timeshare plan with units in multiple locations. You should also research any timeshare resale limitations.

You could have to compete with the company that sold you the timeshare or with nearby real estate brokers who might not want to offer the timeshare property.

Which Timeshare Weeks—Fixed or Floating—Should I Choose?

In conventional timeshare facilities, a specified week (or weeks) in a property is frequently sold.

The buyer, who selects the dates they want to stay there, pays for the right to use the property during the designated times each year. Selecting a set date is perfect if, for example, you always want to spend your birthday or a particular holiday at home.

Timeshares can also provide “floating” or “flexible” weeks. With this less formal arrangement, the buyer chooses a week or weeks without a specific date but within a set period. The owner can reserve a week each year at any time, subject to availability (or season).

As an illustration, if customers purchase a week during “high season,” they can reserve any week for the following year during the property’s designated busy, popular season. The prime season may stretch from December through March, giving the owner considerable leeway concerning their travel plans.

The potential that all the weeks that work for you may already be taken if you don’t move quickly enough is a significant disadvantage of buying a flexible timeshare. However, if you need a little flexibility and can plan ahead, the flexible framework may still be the best choice.

What Specifically Do I Get When I Buy a Timeshare?

Your ownership of a certain property interest will depend on the type of timeshare you purchase. The two common configurations for timeshares are shared leased ownership and shared deeded ownership.

Overview of Sharing Leased Ownership Interest

The developer will still hold the deeded title to the property if the timeshare is set up as shared leased ownership, and each owner will have a leased interest in it (similar to a rental tenant).

Each lease allows the owner to use certain properties for a fixed week or a “floating” week during a predetermined timeframe each year. Your ownership stake in the property often expires after a predetermined period or, at the latest, upon your death.

Additionally, leased ownership frequently places more limitations on property transfers than a deeded ownership stake.

As a result, as an owner, you might be unable to sell or otherwise give away your timeshare.

Leasing ownership interests are frequently more cost-effective than comparable deeded timeshares.

Understanding Shared Ownership Deeds

According to the number of days each timeshare owner has paid, they are each granted a portion of the actual real estate under shared deeded ownership. The owner receives a deed for a piece of the unit that specifies how and when they can use the property.

In a deeded ownership system, numerous deeds are generated for each property. When a condominium unit offered in one-week timeshare increments is fully sold, one deed will be issued to each partial owner.

A crucial aspect of shared deeded ownership is the ability to sell or otherwise transfer your timeshare to another party. However, this characteristic also raises their price compared to shared leased ownership.

Will Participating in a Timeshare Exchange Program Increase My Travel Flexibility?

When a timeshare is leased or deeded, the owner acquires the right to utilize that property. This may be too constricting for someone who enjoys taking multiple vacations to different places.

Several resort projects participate in exchange programs to increase flexibility. These let timeshare owners swap time at their residences for time at another participating residence.

An owner of a week in a condo at a beach resort in January, for instance, might trade the property for weeks in condos in ski resorts this year and in New York City the next year.

However, exchange clubs do present some challenges. Owners typically have the option of choosing only another property that falls under the same category as their own.

Additionally, it might be difficult to find desirable homes, and there are sometimes additional expenditures.

What Other Options Are There If I Can’t Pay Cash Up Front?

If you can only pay a fraction of the timeshare purchase price upfront, be prepared to pay hefty rates for financing the remaining balance. Timeshares can typically only be financed by banks if they maintain their value.

The interest rate will be high even if you find a bank prepared to finance your timeshare purchase. Alternate financing is typically provided by the developer, but once again, only at high-interest rates.

What Additional Expenses Are Associated with Buying and Maintaining a Timeshare?

Even while owning a timeshare implies you won’t have to pay for housing each year, they are not free after the initial purchase. A timeshare owner must also pay annual maintenance fees, often used to cover expenses related to property upkeep.

These charges are due to whether or not the owner uses the property.

Even worse, these prices rise as time passes, sometimes much above what is fair.

By renting out your timeshare during a year when you aren’t using it, you can reduce some of these ongoing expenses (if the rules governing your particular property allow it). However, you could have to pay a portion of the rent or other costs to the rental agent (such as cleaning or booking fees).

I’ve Decided to Buy a Timeshare. Are There Any Last-Minute Preparations I Should Make?

Review all the paperwork before signing, or seek advice from a lawyer experienced in timesharing. The contract might have a “cooling-off” period where you can back out and receive a refund. Most states where timeshares are found demand this kind of cooling-off period. If such a clause is included, you can use the time to change your mind.

If there isn’t a cooling-off period, make sure you comprehend everything before you sign and read all the paperwork.

Do I Need An Attorney If I Have A Problem With My Timeshare Agreement?

A lawyer with experience in timesharing agreements can explain your contract to you and advise you on any issues you might face. Before you sign your timeshare agreement, you should seek legal advice from a real estate lawyer if you have any questions or concerns regarding its contents.