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Several timeshares are listed for $1 on eBay. Some companies offer a deed-back program, which lets owners who have paid off their timeshare simply return the time-share to the timeshare company.

Is it possible to buy one of the $1 timeshares, go on vacation and then deed it back without incurring extra fees or paying the HOA?

EDIT

I was listening to Clark Howard who had a caller ask about timeshares. First he pointed out eBay has $1 timeshares, so don't pay more than that. Then he recommended the caller ask the timeshare company if they had a deed-back program (since it lets them resell it's in their best interest).

Pretty sure this trick would show up on travel hacking sites if it worked, but wondering why it doesn't.

chicks
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sevensevens
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    I can't speak with authority on this subject, but I would note that the deed-back part of your link says that the option is not available to everyone. I think it's highly likely that as someone who just bought it for $1, it will not be available to you. – glibdud Jan 19 '21 at 23:10
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    You should be aware that companies exist where you pay THEM to take your time-share away from you. Giving them up is not that easy and a lot of people are desperately trying to get out of them. I wouldn't take one for even a dollar. – JohnFx Jan 20 '21 at 01:28
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    I would expect that once you deed your timeshare back to the company, they would then charge you market rental rates to use the property. – jamesqf Jan 20 '21 at 02:50
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    The article you're linking to on redweek.com looks to be at almost 6 years old. I am curious how the deed-back program actually worked or if it's ongoing. On the whole, I view timeshares as a toxic asset: you're buying an ongoing burden that costs money to get rid of, as evidenced by people who are having trouble giving them away. – spuck Jan 20 '21 at 17:25
  • You really think you're gonna get a timeshare for $1? https://www.ebay.com/help/buying/bidding/reserve-prices-work?id=4018 – MonkeyZeus Jan 20 '21 at 19:11
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    @MonkeyZeus If the timeshare comes with expensive maintenance fees and there's no other way out of them, then selling a timeshare for $1, if you somehow manage to find someone willing to take it, is a lot better deal for the seller than the alternatives. But then you're not really getting a $1 vacation; you're getting a ($1 + years and years of fees) vacation. – Zach Lipton Jan 21 '21 at 07:19
  • On top of the timeshare specifics, this question is incredibly naive about how eBay works. Yes, there are listings with a starting price of $1. That means it might sell for $1 or less. Or they might sell for more. Either way, if it’s too good to be true, it is… Meaning it’s not… Meaning it’s a scam looking to take your $$$. – Giacomo1968 Jan 21 '21 at 11:27
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    @ZachLipton There isn't much I expect from a fraudulent company (Resort Transfer Group) selling timeshares on eBay https://www.prnewswire.com/news-releases/diamond-resorts-announces-600k-judgment-against-owner-of-fraudulent-missouri-timeshare-exit-company-301091109.html. So go ahead and touch the electric fence to check whether it's live or not. – MonkeyZeus Jan 21 '21 at 15:00

5 Answers5

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Your examples were 10-day auctions which had just posted at the time you had asked. Questions such as "how does eBay bidding work?" and "What is sniping" would further your understanding.

A $1 timeshare is like a $1 cell phone.

The $1 is a distraction from the real issue: You are signing a contract which obliges you much to much more than $1!

Think of it more like $1 down on a used car.

You are buying a condo, albeit a fraction of it. With its own maintenance requirements and a significant HOA fee.

Why is the person bothering to sell it for $1?

Now you may be used to the idea of being able to "walk away" from a house that you owe more on than it's worth. You don't need to list it for $1 on a trading site, you just walk away and take a bit of a credit hit.

Why doesn't the seller just do that? They CAN'T. Their timeshare contract doesn't work that way. There is no walk-away clause. Their only other way out is personal bankruptcy, and that means losing a lot more of their assets.

So here they are trying to unload their contractual commitments onto a sucker. They're not giving away a bargain, they are trying to stop their own losses.

Harper - Reinstate Monica
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    goes to ebay to search for $1 timeshares – Danny Jan 20 '21 at 22:16
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    returns, horrified of ~ $2000 + yearly maintenance fees – Danny Jan 20 '21 at 22:20
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    A house where you owe more money than its worth sounds like "negative equity" to me, and you certainly can't "just walk away" - you'd still owe someone that money, whether or not you were enjoying the benefit of the house. – IMSoP Jan 21 '21 at 22:57
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    @IMSoP You'd think, right? What you're missing is a concept called a "non-recourse loan". That's where either by agreement or law, the lender has no recourse except taking the collateral (e.g. house) back. On an upside-down house, you hand over the keys and you're out, and the lender eats the loss. That, plus "breaking a lease", is so common in US real estate that a person might assume it applies to timeshares too. – Harper - Reinstate Monica Jan 22 '21 at 00:22
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    I'm wondering about the terms of sale here. Can't they just sell it for $1 to a European buyer? That European buyer could then exercise his consumer rights to cancel the contract. – MSalters Jan 22 '21 at 11:55
  • @MSalters Or, similarly, sell it to someone who is about to declare bankruptcy anyway. – David Schwartz Jan 22 '21 at 18:23
  • @MSalters: I'm sure the timeshare company has thought about that and come up with some means of preventing it (e.g. a "You can't sell to anyone who is legally empowered to void the contract" clause). Then, instead of the contract being voided, the sale would be. – Kevin Jan 22 '21 at 19:31
  • @MSalters I doubt it would work that way. For example, when I owned a house in the Netherlands, I couldn't suddenly decide that US law applied to my lease contract with tenants in my house and then use that to evict them. Contracts are governed by the law of where they are entered or otherwise agreed within the contract. – Eric Jan 22 '21 at 19:43
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    @MSalters No idea about timeshares, but the apartment I own (in Europe) has a clause that the managing association has to confirm any sales - and that specifically includes a credit check of the buyer. – xLeitix Jan 23 '21 at 08:56
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Probably* not. The timeshares that are sold for $1 very likely cannot be deeded back. If they could, then the owner would have done so rather than waste their time trying to give it away to someone else. If they truly had any value left before the maintenance fees are due again, they would sell them instead of giving them away.

(*I say probably only because it's possible someone doesn't realize the option exists and they already paid their maintenance dues that year, but this seems highly unlikely that they can figure out the paperwork for a transfer without knowing they didn't need to.)

As a side note, the reason that people give away timeshares, or worse, sometimes pay companies a lot of money to get them out of their timeshare, is the annual fees are too high. A typical example is a nice resort in Hawaii might normally (pre-pandemic) cost an average of $300 per night, or $2100 for a week. The timeshare owner gets a "free" week at that resort, with an annual fee of $750. You still have to pay for airfare and living in Hawaii for a week, so unless you are sure you would travel to Hawaii for a week every year without the timeshare, it's probably not worth being forced into it. Adding salt to the wound is the fact that the owner of that timeshare may have paid anywhere from $3-10K to purchase that "free" week many years ago. Most timeshare owners try to rent out their timeshare to at least break even on the dues, but oftentimes even that becomes hard and they end up throwing it away if they legally can, or like a an old large tube TV, paying someone to take it off their hands.

TTT
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    Your example makes me wonder why the timeshare company doesn't actively buy the timeshares back (for really cheap), if they can then turn around and rent them for $2100/week. – jamesqf Jan 20 '21 at 17:39
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    @jamesqf The one I was basing my numbers on was a points based system (Diamond Resorts), where many different resorts are linked. I'm not sure there would ever be an incentive for them to purchase points back when they could just simply sell more anytime. (Unless every hotel that accepted points was booked out for so long that no one would ever purchase/trade points anymore.) But for individual timeshares, your point is valid, and in that case rental would be easy to profit from and no one would give it away either. – TTT Jan 20 '21 at 17:52
  • @TTT isn't that being a hotel? Am I missing something here besides accounting magic on the resorts part? – crasic Jan 20 '21 at 19:53
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    @crasic hehe, pretty much. Most timeshares these days are pretty much "hotel subscriptions" that they trick you into buying under the guise of "ownership" so you can't easily cancel. – TTT Jan 20 '21 at 19:58
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    @jamesqf because the ones people are trying to get rid of are old shabby run down time shares. Regardless of who is trying to sell them, they're a lot less attractive than a time share on a shiny new property – Dan Is Fiddling By Firelight Jan 20 '21 at 20:36
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    @jamesqf: In addition to Dan's note, it's a lot easier to collect a guaranteed $750/resident/year fee than to pay for all the advertising and access (e.g. to travel booking sites) needed to ensure you keep it occupied enough to make the same profit. – ShadowRanger Jan 21 '21 at 01:32
  • @ShadowRanger: Is it easier, though? Especially if the timeshare is located in legal jurisdiction A, and the owner resides in B? I admit I don't know, as my only experience of timeshares is the long-ago year or so I spent working as a maintenance person at one. That one seemed quite popular... – jamesqf Jan 21 '21 at 03:49
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    @DanIsFiddlingByFirelight You might be surprised how much an old, shabby, run-down hotel room rents for in Hawaii, though. :) Especially on Kauai (well, at least before Covid.) – reirab Jan 21 '21 at 21:53
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    @reirab if the previous owner could cover their costs re-leasing their share on air bnb they wouldn't be trying to dump it for a dollar. – Dan Is Fiddling By Firelight Jan 22 '21 at 03:40
  • @DanIsFiddlingByFirelight I don't think all of them even allow that, though I could be wrong. I could also see some people just not wanting to deal with the hassle of trying to re-lease it every year. – reirab Jan 22 '21 at 05:00
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So you understand that timeshares are a bad deal, and for that reason they are tough to sell. Basically you are giving a company a lot of money upfront so you can be obligated to spend another amount, each year, to use their product.

I would assume that the "deed back" properties are ones that are in high demand and therefore not difficult to sell. Disney timeshares are sort of like this, they reserve the right to purchase back your timeshare if you attempt to sell it at too low of a price. Disney timeshares are actually pretty good values and most owners are very happy with their purchase.

The ones that are being sold for a low price are probably the rot gut timeshares. Those places that have not been maintained and are very, very difficult for the sales staff to unload.

Keep in mind that this is considered a real estate transaction, so even with a sales price of a $1, you will end up paying a lot more in closing costs depending on the locale.

To me it is too risky of a deal to undergo. There are better ways to get a nearly free vacation. One would be going on a time share tour. Please follow common advice on getting out of a tour early without purchasing.

Philipp
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Pete B.
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    I have no experience with any timeshare, but would like to point out to others reading this that "reserve the right to purchase back" means the company could choose to exercise that right, but they are not required to do so. Disney would have a vested interest to prop up their value by not allowing them to be sold "under value". – spuck Jan 20 '21 at 17:20
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I cannot recommend against this strongly enough. Do not do this!

Most Timeshares have expensive yearly dues which must be paid. There's often no easy way to get out of these. Because timeshares are real estate, they pass to your estate when you die.

As a practical example: when my mother died, I inherited two timeshares from her estate. I was unable to reject these. In one case, the timeshare company was "nice enough" to take the timeshare back for free, so I avoided having to pay any maintenance fees on it. The other timeshare had a $2,500 in annual dues which I could not avoid and was forced to pay out of pocket, even though I did not utilize the property. The Timeshare company (Mariott) would not buy back the property from me, not even take it back for free. They wanted me to keep paying those sweet, sweet annual dues.

In my case I was lucky enough to find another sucker — achem, person — to sell that timeshare to. I managed to not lose too much money, but this timeshare that I never wanted did end up netting me a loss. My brother was not as lucky and, as far as I last heard, is still paying $2500 annually for a timeshare he does not use.

Timeshares for $1 are not a free vacation. They are being sold at $1 because someone wants to get out of their annual dues, and you and your children may be stuck with them.

Josh
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    https://www.nerdwallet.com/blog/finance/inheriting-timeshares/ indicates you can disclaim the inherited timeshare in probate. You'd want to consult a lawyer. – ceejayoz Jan 22 '21 at 02:08
  • Hm... I had a probate lawyer, in fact two lawyers helped me with my mother's probate. They told me I had no choice (in Massachusetts, USA) than to accept the timeshares. if I dd not, the probate could not be resolved... 🤷🏻‍♂️ it all worked out for me in the end but I would save anyone that extra trouble during such a painful life experience. – Josh Jan 22 '21 at 02:10
  • @ceejayoz And you'll note that the lawyers in the article set up a trust to avoid the ineritance mess. Probate is complex and you can't really even get to the point of disclaiming an inheritance until it is sorted out, which likely means either having the timeshare foreclosed (with attendant costs and impact on other estate assets) on or sold. – Eric Jan 22 '21 at 20:23
  • @Eric The article mentions several scenarios and things to be mindful of. The lawyers setting up a trust is one, but later on in the article it says to avoid putting kids' names on the deed and that even without a trust there are options. I'm sure a trust makes it easier, but there are very few scenarios where kids are forced to take on inheritances from their parents. – ceejayoz Jan 22 '21 at 20:36
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    @ceejayoz Yes, I read the whole article, and I would sooner trust what lawyers do to protect their own children than so-called timeshare experts. Not being forced to inherit a timeshare does not mean that can be left in the estate while other desired inheritance is received. Something would need to be done in probate to close the timeshare out, which, in extreme situations, might mean liquidating other assets such as the family home to close out the debt associated with the timeshare. But IANAL, just an executor dealing with some unfortunate obligations on an estate. – Eric Jan 22 '21 at 20:53
  • @Eric I agree; if you're really tempted to get a timeshare, the trust approach seems most sensible to avoid mayhem. – ceejayoz Jan 22 '21 at 20:54
  • Some lawyers don't know this since usually, people are fighting to keep all of the inheritance intact -https://clark.com/travel/refuse-inherited-timeshare/#:~:text=If%20you%20are%20either%20left,called%20%E2%80%9Crenunciation%20of%20property.%E2%80%9D – sevensevens Jan 24 '21 at 21:13
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NO !!

Else there would not be so many companies that you can choose to pay to get you OUT of your timeshare contract.

You might buy a timeshare for $1 but you will be stuck for all the fees and other charges forever, which motivated somebody to try to sucker you to buy it for only $1.

legalbeetle
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