Is it safe to buy timeshare on Ebay?
A week in Marbella in a luxury resort every year for life for 99p???!
Sound too good to be true?
I’m sure there are a many of us that use the online auction site who have placed a bid and lived to regret it. Often if something seems too good to be true it is (like that Louis Vuitton handbag back in 2012 that I paid £150 which was definitely NOT authentic…).
These days when buying through Ebay however, much of the risk is taken on by Ebay themselves who will allow recourse if the transaction is found to be ‘not as described’ . The same with paying through Paypal – the balance of power seems to be very much in the buyers hands.
A brief sweep of Ebay for timeshare showed up everything from an ownership week in Loch Rannoch Scotland for 99p to a week in the penthouse at Hollywood Mirage, Tenerife that sleeps 10 with its own jacuzzi and sauna for £3,495.
We all love the idea that the middleman is eliminated bringing the cost of goods down. But just how safe is this method of purchase? We look at the pros and potential cons…
Timeshare is one of those products...
… that when a person really wants out, they can be prepared to walk away from ongoing annual charges for literally just the cost of the legal fees. It may be down to ill-health, change in circumstances, or it was inherited from a relative. Whatever the reason there are plenty of low cost resale timeshare deals on the market.
If you are in the market for a timeshare (or already have one and want additional points) this could seem like a no-brainer. There is a huge amount of timeshare stock on Ebay, and if you read the timeshare message boards, plenty of people have bought from the auction site and are happy with their purchase.
There is a saying in the property industry that a buyer spends longer researching a 2 week holiday then they do a house purchase. A timeshare is almost hybrid of the two, a lifetime ownership of a holiday in fact! As such it should certainly warrant careful thought and due diligence before committing to buy, but that doesn’t mean you can’t do this and still get a great bargain.
- It will be MUCH cheaper than buying from the resort direct
- You (hopefully) won’t have to sit through a lengthy sales presentation
- You can take all the time in the world to peruse websites, reviews and do your due diligence, including visiting the resort you are interested in.
- Ebay and Paypal both offer buyers a certain amount of protection
- The headline price you see advertised is not the TOTAL cost of the timeshare. This may see obvious to some but it is still worth saying. You have to pay annual maintenance fees which at some resorts could actually be more than you would normally pay to rent somewhere for a week. You may well also have to pay a transfer fee to conclude your ownership of the deeds.
- You may not be dealing with the actual owner of the timeshare – they might be a company posing as an individual and when you commit to ‘buy it now’ you could be sent a date to attend a sales presentation where the timeshare will be offered at a higher price.
- You could end up with a timeshare in maintenance arrears – the debt may have already been passed to a debt collection agency and your address will be passed to them as the new owner. This could result not just in additional charges but upsetting situations if you are paid a ‘visit’ by a collection agency.
- Scammers have been known to create phony escrow services to transact a fake ebay auction.
- Even though the sale may be genuine the information on the listing could be wrong – details of annual maintenance fees, type of unit, floating/fixed week can be incorrect. People may be unsure of what they actually own (for example if it’s been inherited or passed on in some way like a prize) and may not fully realise they have given incorrect info.
So, what can you do to protect yourself?
Do your due diligence and research as much as you are able.
- Look at the sellers ebay feedback before you bid and satisfy yourself by both feedback numbers and comments from previous buyers including completed transactions.
- Contact the seller in advance of bidding and check how good communications are, whether they are prompt, helpful and informative.
- If the seller can’t answer a particular question contact the resort direct – you can ask for the timeshare contract number to check exact details including verifying ownership.
- Check what similar weeks in that resort have sold for and even have a few on watch so you can see what the average price paid is.
- Avoid using an alternative payment method to Paypal (as you are protected as a buyer – their service is very similar to escrow) unless you personally have selected the escrow service and trust it.
- Request an Estoppel letter from the timeshare resort. This is a legal document that states whether the ‘benefit’ is genuine, is the same as the product you have bidded on and is without defaults and modifications. There will be a charge attached to this however which should be included within your budget (£250-£500 is the norm).
- If you can visit the resort you are interested in so much the better – you can then ask other owners who are there what their experience of ownership has been.
Use a trusted timeshare reller instead
The alternative, is to use a reputable timeshare reseller. We wrote a blog back last year about the three key thing you need to know about timeshare resale companies.
These companies also have fantastic bargains in some of the more popular resorts, and can advise you better on your purchase by guiding you through exactly what it entails. Beware still as there are LOTS of companies in this space who may not be as genuine as they sound.
These three companies are all members of the trade association for vacation ownership across Europe, the Resort Development Organisation (RDO) and abide by a code of conduct.
Points, points, points!
The other advantage of picking up cheap resale weeks is the ability to convert those weeks to lucrative points. This means it doesn’t particularly matter where the timeshare home resort is – you simply register your points with an exchange company such as RCI, Interval or DAE and that one week could easily turn in two or even three at other resorts with some cheeky low cost getaways to benefit.
If you have paid a cheap resale price, and yearly maintenance fees are reasonable (and you have the the time to take) you could really luck in! Read more about exchange companies and how it works here.
Of course the counter-advice to this is that if you are unable to exchange your points for something you want, you may well be stuck with going to your home resort so ensure it is somewhere you’d still be happy to go.
Attitude to risk
At the end of the day it comes down to your attitude to risk. There are those of us who are perfectly comfortable buying and selling used phones, cars and collectables on Ebay. There are also those who would never dream of buying so much as a pair of flip flops from an online auction site.
If you are spending money you can ill afford to lose, or you don’t have a contingency fund to pay for some additional legal advice if things go wrong then you may be better buying from a legitimate reseller or from the resort direct.
If you fancy a punt, and are happy to deal with the consequences, you could actually end up with something that really should be too good to be true…