As the time-share industry continues to grapple with a business model that offers no easy way out for owners who want to sell their weeks, trade-in programs are emerging — a great option for those who still enjoy the benefits of time-sharing, but whose current units no longer fit their needs.
With a trade-in, you simply turn over your time in your particular resort to a third party, or perhaps even the property's developer, and you buy another interval in your current location or a newer one that better suits you.
This isn't an exit strategy for people who can no longer afford to share in the ownership of an apartment or townhouse at a particular resort. Maybe you no longer travel, or perhaps you're unable to pay the annual maintenance fee. Or perhaps you're among the minority of owners who decided you really don't like time-sharing after all.
But if you still like the concept, and just find you no longer enjoy the property where you are an owner — maybe you're getting a little too long in the tooth for downhill skiing, and long for a week or two on the coast were you can chill to the roar of waves crashing instead — a growing number of trade-in companies will try to find you something new.
These time-share matchmakers will sit down with you to find out why you are dissatisfied with your current resort, figure out what your needs are now, and link you up with a more fitting property. If you find a new one you like, you turn your current time over to the trade-in company and buy time in the new one.
You won't get back what you paid for the original time-share. That won't happen no matter how you try to sell it. But you should receive a decent price, and at least you'll be rid of it. Better yet, because of the trade-in company's affiliation with the new property, you should receive a nice discount on your new shares.
A number of vacation ownership companies and travel clubs have trade-in programs, according to Heather Guffin, president of the Assn. of Timeshare Recyclers.
What kind of trade-in price you get, or how much of a discount you receive, depends on a number of variables. Each deal is different, she says, but you alone determine whether the compensation is fair.
Another benefit is that once the transfer is completed, you are no longer responsible for the old unit. In other words, you won't have to continue paying those pesky maintenance fees on the old place while it is on the market. After the final transfer, you are on the hook only for the fees on the new property, whether the old has been resold or not.
Trade-in programs are one of only a few exit options for time-share owners Guffin discussed in a recent interview. And therein lies one of the main drawbacks that continue to plague a business that, despite its shortcomings, continues to enjoy surprisingly strong popularity.
That most of the sales recorded over the last few years were to owners who were either upgrading their weeks or buying additional ones is proof enough that the concept works. For further evidence, consider recent studies that show that more than 4 out of 5 owners are satisfied with their memberships and would recommend time-sharing to friends and relatives.
"Time-share is great when it is being used and enjoyed," Guffin says.
At the same time, it can become a real burden when you find yourself in situations where you are no longer using it but have to pay for it anyway.
Guffin says her association is committed to finding viable time-share exit strategies that work for the entire industry, but especially for the consumer. "We believe that time-share owners have the right to gracefully exit their time-shares," she says. "The value proposition cannot include it being a life sentence — that once purchased, a time-share is owned forever."
Members of Guffin's group are working within the business to solve the resale problem. "Resale is not an enemy of time-share, it is an inevitability," the group's president says. "It is not going to just go away."
One way developers can help is to shine the light on trustworthy resellers. Or perhaps more important, help consumers identify the many resale scam artists.
Toward that end, here are some tips from the association for identifying resale scammers.
• First blood. If you did not initiate contact, beware.
• Rush to judgment. Don't be pushed into making a quick decision.
• Mystery buyer. No matter what they say, they don't already have a buyer.
• Upfront fees. A minimal upfront fee of no more than $1,000 may be justified, Guffin says. But anything more is probably a rip-off.
• Inflated value. Guffin says wise resellers will take 15 minutes to research what their shares are worth. If the reseller says it can get more, hang up.
• Wire transfers. Wire payments are basically cash payments, and anyone with a bank account can receive a payment by wire. Legit outfits, on the other hand, have merchant accounts with credible banks.
Distributed by Universal Uclick for United Feature Syndicate.