What Owners Need to Know
How do transfer companies market and sell their services?
Is using a transfer company the right decision for me?
If I do want to use a transfer company, how do I select the right one?
If I choose to do business with a transfer company, what should I do next?
Transfer companies market their services in many different ways. You may get a call from someone asking if you are interested in selling or "getting rid" of your timeshare. You may find a transfer company on the Internet when you search for how to sell your timeshare. Or, you may even receive a post card in the mail that says something like:
"Tired of your timeshare?
"We have the simple solution for you."
"This program GUARANTEES in writing…"
"Our consultants will be in your area. We will be making offers on all timeshares."
"We will acquire your timeshare."
"See why thousands of people call us every month!"
After your initial contact with a transfer company, you are often asked to attend an in-person consultation or informational seminar to learn more about how you can “rid” yourself of your timeshare. Or, you may also be asked to watch an online video presentation.
Once you get to the meeting or during the video presentation, you may be subjected to false and confusing information. The transfer representative may attempt to scare you with misleading horror stories about timeshare ownership. Then, after hearing the transfer company’s pitch on how your maintenance fees will go up every year you own, you will likely be asked to pay the transfer company thousands of dollars to transfer your timeshare. You’ll find more information on these aggressive tactics here.
If you have been trying to sell your timeshare for a long time, this may seem like an attractive offer. However, don’t feel pressured into making a premature decision. Always remember, if the company does not perform (regardless of "guaranteed" claims), you can still face significant financial and legal consequences.
If you are in the market to sell your timeshare, you may want to check with your resort developer, resort manager, or homeowners’ association to see if they offer a resale option. Be sure you have exhausted all other inexpensive or free methods of renting, selling, or giving away your timeshare before considering a transfer company. Using a transfer company will probably be the most expensive and uncertain way to dispose of your timeshare. As with any service that requires an up-front fee, paying a company to transfer ownership out of your name can be a significant risk. There is no way to guarantee the transfer will take place. Please visit here to learn more about your resale options.
If you decide to use the services of a transfer company, you should DO YOUR HOMEWORK before listening to any sales pitches. Begin by checking with your resort manager to see if they have had any interactions with the transfer company to find out if they have had positive or negative experiences. You can also call the American Resort Development Association Resort Owners Coalition to learn more about transfer company activity and to see what other owners have reported about that company.
You can search the Internet for the company to read any negative or positive information available online. Don’t be influenced just because the company has a professional-looking website or claims to be a member of a professional organization. Look at consumer reviews and other news stories about that company.
You may also want to do a search on the Better Business Bureau (BBB) website. However, keep in mind that the BBB is not a government entity but is a private business whose ratings are based on consumer complaints and may not tell the whole story about a business. In the case of fraudulent transfer companies, owners may not know for a year or longer that the company has defrauded them or that the timeshare was not transferred properly and, therefore, would not complain to the BBB until long after the transaction. And, if the transfer company does transfer the timeshare, owners probably won’t complain to the BBB. A positive BBB rating does not mean the company is ethical.
In many states, transfer companies may be required to hold a real estate license. Check with your state’s Department of Real Estate or Real Estate Commission to find out whether a transfer company is required to hold a real estate license before doing business in that state. If that is the case, you should not do business with an unlicensed transfer company. Click here to check to see if a company has a real estate license in any state.
You may wish to check with your state Attorney General’s office or the Attorney General’s office in the state where the company is headquartered to see if that company has any complaints filed against it or if the AG has filed any actions against that company.
If after doing your homework you still choose to use the services of a transfer company, you need to know the right questions to ask to protect yourself. You can use ARDA’s Transfer Company Checklist as a start.
Remember, if you choose to pay an up-front fee, there is no guarantee that the transfer will happen as promised. It certainly helps if your money is going to go into an escrow account (or to another independent third party) to be held there before the transfer takes place. But, you also need to make sure you can trust that escrow or third party. DO NOT fall prey to a high-pressure sales attempt to get you to pay an up-front fee until you are entirely comfortable with whom you are doing business. You may be offered a "one time special" or a deal that "expires at the end of the presentation." Rest assured, if you want to do business with a transfer company later, they will be happy to take your money at any point in time.
Make sure to check with the resort to see if they have heard of the transfer company and to let them know you plan to make the transfer. Some resorts may offer a dissolution arrangement or make a counter-offer to take back the timeshare. This could be a better option for you.
Also check with your resort manager to determine if there are any rules and regulations in place that would affect your timeshare transfer. Knowing these rules will help you avoid frustration if you pay a transfer company and later find out you are not able to transfer your timeshare for one reason or another.
Note: If you are thinking of signing an agreement with a transfer company, do not accept tax or other legal advice from that transfer company. Before signing anything, check with your own legal or financial advisor(s). If a company claims to guarantee eligibility for tax deductions or offers other tax, investment, or inheritance advice, use caution and walk away.
If you are asked to sign a power of attorney or other document in order to transfer your timeshare, have your own legal advisor review any such documents first. And, beware of anyone telling you that you don’t have to read or review legal papers before signing them.
Finally, never provide credit card information, your social security number, information to perform a bank transfer, or any other personal financial information over the phone or during a high pressure sales seminar to any company you have not thoroughly investigated.