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Selling your time share

Dear Real Estate Adviser,
My husband and I made a really bad financial decision, buying a time-share condo on a golf course in Myrtle Beach, S.C. Neither of us golf. We bought it five years ago and still owe over $1,000. It's not even on the beach, which is where we want to be. Our week is in December, but when we go to the beach, it's always in the summer. We let the seller talk us into this because of the trading power. Also, you have to pay maintenance fees every year ($400). It's very nice, but we have never spent the night there. What is the least-expensive, fastest way to get rid of this?
-- Malinda

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Dear Malinda,
I'd love to tell you what you want to hear, Malinda, but I can't. It's definitely a buyer's market out there for time shares, and will be for the foreseeable future. A lot of people are trying to wriggle out of them and buyers can often pluck them up for a song.

This isn't a knock on the concept. Time shares in prime resort areas in peak seasons are much more marketable. People who have secured reasonably priced units in desirable locations swear by them -- not at them -- and even own several around the country.

But a December week in "Myrtle," while certainly not the least desirable place to be in the winter, is still considered an off-season time share. So you may have a challenge on your hands unloading it quickly.

Like a new car, your time share likely depreciated the moment you bought it. Companies that sell them have to load their promotional costs into the price. Those free airline tickets, vacation packages and other prizes used to entice prospects can add up, whether they buy or not. "Such resorts usually add 50 percent of sales cost to cover marketing costs and that's pretty much what you have to take off the top when you sell," said Chip Ballew, president of Timeshares.com.

So the bad news is that you may get back only about half of what you originally paid, which presumably is in the $15,000 to $20,000 range.

The good news is you have several options to explore.

There are numerous sites that list time shares for sale, trade or rent, including timeshares, sellmytimesharenow, timesharevalues, redweek and tug2.net. Some offer property-user ratings, numbers of responses per ad, selling tips, industry news and other services. Ebay now devotes an entire section to time shares.

Of course, conventional real estate brokers can handle a time share sale, but their commissions will usually run higher than average, sometimes 25 percent or more. Some will even charge fees for appraisals, which are unnecessary in most time share sales, by the way. There are a handful of specialty brokers who periodically conduct auctions. Search the Internet under "time share auctions."

Would-be sellers should not send money to parties who absolutely promise to sell their time share, says Ballew. "Some won't get sold, and people will feel they were getting ripped off, which is kind of like pouring salt in wound," he said. Newspaper classified sections, Ebay and some Internet services will charge a slight fee.

But there's no cut-and-dried method to move a time share.

There is another avenue you might explore if you have no luck and really want to cut and run. Contact charities to see if they will accept time shares as donations. Some will sell or rent them to raise funds or even use them for organizational functions. You can generally deduct up to $5,000 of fair market value without an appraisal, as well as transfer fees, according to the IRS. Contact your accountant or tax representative first, though.

Good luck.

Bankrate.com's corrections policy -- Posted: June 26, 2004
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