Buying a Timeshare Foreclosure – Bargain or Bust?
There is no doubt that you can save thousands of dollars buying foreclosed properties. In most instances, foreclosed properties can be purchased at a public auction for just a fraction of what they are worth. If you are considering timeshare, buying a foreclosed vacation property may sound alluring, but there are many hazards and pitfalls that can make it more of a headache than it is worth.
The first thing you need to consider is – Why is the time share property is facing foreclosure in the first place? Like most other foreclosures, vacation properties go into default and are eventually foreclosed upon when the owner can no longer afford the payments, whether the payments are on the principal balance or maintenance fees. In order for a timeshare foreclosure to end up at a sheriff’s auction, the owner had to have stopped making payments for a period of many months or years, at which point legal action is taken to get the property back.
The most obvious solution to this problem would be for the owner to sell the property, and more than likely the owners have already tried to do this without success. It is important, as a well-informed buyer, to do your research and try to find out why the owner was unable to get any money for their timeshare on the resale market. Does their week fall in the off-season? Is the vacation rental at a resort that has fallen out of favor? What are the conditions of the timeshare resort like? How much are the maintenance fees and other costs? What is the resort rated? What have other people said about this particular accommodation? Have there been any special assessments on the property in the past few years?
The simple reason why many vacation properties are facing time share foreclosure is that they are very difficult to sell. For this reason, purchasing a time share should not be taken lightly. It should be viewed as a long-term commitment and not something that you can quickly get rid of when/if it becomes a financial burden. Timeshare should never be seen as an investment property, and there is never any guarantee you will be able to rent out or sell your week if you are unable to use your deeded week. Timeshares only make financial sense to people who plan on using them, so if you can not see yourself going to the same resort every year or traveling at the same time every year, timeshare is probably not a good option for your vacation needs.
A second topic to be considered before buying a time share foreclosure is – How many people have a financial stake in the property? Unlike conventional real estate, there may be many people financially involved in a time share including developers, real estate agents, resort owners and lenders. All of these parties will be expecting to recoup all or part of their losses through a foreclosure sale. The legal red tape involved in this could become quite confusing and stressful. Not to mention, the more people there are involved with the resort, the higher the initial offering value for the resort will be at the sale.
If a timeshare foreclosure sale sounds like something you would be interested in, make sure to research all properties thoroughly and seek legal counsel before making your final decision. If done with plenty of forethought and pre-planning, purchasing a time share foreclosure can be a great way to enjoy all of the benefits of a time share for a fraction of the cost. Owning a time share has many advantages including the ability to exchange your time share with other resorts and the use of your time share resort’s amenities. If done right, purchasing a time share foreclosure could be the key to owning the vacation property of your dreams.
Keep in mind that there is a lot of fraud surrounding time share foreclosure sales. This is due to the high-pressure selling atmosphere that surrounds this type of property and the number of people who stand to lose a great deal of money when a foreclosure becomes imminent. Be careful not to get lured in by claims that seem too good to be true. If in doubt about the integrity of a time share foreclosure opportunity, pass it up. There are plenty of properties to choose from; it is not worth the headache of a potential scam to get caught up in a questionable purchase.
In 2005, we purchased a Timeshare from Westgate Resort in good faith. We were a young married couple with two toddlers. We were told that we would never regret the purchase and that we had a “lifetime of amazing vacations” ahead of us. The only thing that has remained constant and true is the fact that we HAVE REGRETTED EVERY MINUTE OF OUR PURCHASE.
Between 2007 and 2010, we paid two different companies over $2,000 who each claimed that they guarantee to sell our timeshare. Neither ever did. In 2010, we contacted Westgate and notified them that we would NO LONGER be cheated out of our hard earned money and would NOT continue to pay them. They did not care that we had paid thousands of dollars to them already (100% on time) or that we had spent over $2000 to companies to sell our timeshare. The only thing they cared about was getting their money. They even acknowledged that purchasing a timeshare may not have been the most “honest” purchase but that we were never “forced” to do so.
On December 1, 2011, we will STOP PAYING our timeshare and to NO LONGER allow Westgate to cheat us out of our hard earned money every month. We have impeccable credit of which we have lived an honest and hard working life to establish. Now, it will be ruined for 7 years, at least, due to this foreclosure.
This decision was not easy for us to make, but also one that was based on principle. It is NOT RIGHT for companies such as Westgate to be allowed to misguide trusting people into making such a bad investment. It is even more wrong for consumers like us who have led decent and hard working lives to provide our children with the American dream, to have to suffer ruining their credit due to such a cheating and unethical process such as purchasing a timeshare.
We only owed approximately $6,500 at the time we decided to stop paying. However, we vowed NEVER TO ALLOW WESTGATE TO CHEAT US OUT OF ANOTHER ONE OF OUR HARD EARNED CENTS AGAIN. Our children deserved better than that.
A Westgate Resort FORMER owner
The insight is informative. Since foreclosure deals are very risky, before stepping into it, one has to make a lot of research on foreclosure deals, which in turn will help that person to take the right decision. Can someone tell about foreclosure homes in Canada?