Rethinking Timeshares - part 2

Don't Buy Direct
With as much as 50% of a timeshare's price going to cover developers' marketing costs, timeshare prices are seriously inflated, explains Bill Rogers, founder of the Timeshare Users Group, or TUG, an online community where people can exchange, trade or simply share information about timeshares.

You can find much better deals on the resale market, namely at web sites like tug2.net, RedWeek.com and eBay, where owners post timeshares for sale, rent and exchange.

Consider this: the average price for a timeshare week (or the equivalent points package) at the Hilton Grand Vacations Clubs, for example, was $24,000, according to a 2005 Bear Sterns report on the timeshares industry. RedWeek.com currently features Hilton resales for $12,000 or less.

Negotiate
The good news: The resale market is booming. On its web site, TUG recently featured nearly 1,900 "for sale" ads for timeshares in the U.S. and abroad. RedWeek.com has more than 5,000 ads. A recent search on eBay yielded nearly 900 results.

Give yourself time to find a location or program you like. Then, negotiate. "Most sellers are pretty desperate and they want to drop [their timeshares]," says Toal.

Bettcher, who has been buying and selling timeshares for the past eight years, advises buyers to be patient. "You should pay what you want to spend, not necessarily what the person is asking," she says. If they don't agree to your price, let it go. In time, the right deal will come along.

The best time to negotiate is late fall, according to Bettcher. "Most fees are due on the first of the year, so start looking in October or November. That's when [owners] are getting anxious to sell and are willing to drop their price," she says.

Rent Instead
Renting is a great way to try timeshares without the responsibilities of ownership. "If I were to do timeshares today, rather than buy I'd rent from owners," says TUG's Rogers.

To get the best deal, especially if you're headed to a popular destination, start your search early. John Locher, vice president of RedWeek.com, recommends starting a minimum of two months in advance.

If you're uncomfortable dealing directly with the timeshare owner — after all, you'll be expected to send the money in advance to someone you've likely never met — consider using a "vacation escrow" service. RedWeek.com, for example, uses the escrow services of First American Title Insurance. You'll pay an extra $100.

Rethinking Timeshares (Consumer Action: Personal Finance) | SmartMoney.com

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