Timeshare Exchange Programs and Sales Incentives

A timeshare company can give you vacation ownership by a timeshare interest in real estate. You may have heard of or sat through a timeshare presentation before. You might already know their salespeople can deliver sharp sales pitches. A real estate agent might entice you by discussing the perks and upgrades of a timeshare ownership interest. They'll tell you how much better it is than buying a hotel room in Las Vegas or a Disney cruise in Orlando, Florida.

But you might regret your decision after the timeshare real estate sale. It might be too late for cancellation, and now you're locked into a vacation home that you can't easily get rid of in the resale market. Real estate investing is challenging. Even if you received a competitive purchase price on your deeded timeshare unit, it's not easy to flip real property.

As much as you might love the vacation club that came with your timeshare property, you might soon become tired of going to the same place. But what if you could exchange your timeshare interest in the secondary market? According to the timeshare trade group American Resort Development Association (ARDA), many owners have faced challenges with resale and sale prices. That's where timeshare exchange programs come in.

What Are Timeshare Exchange Programs?

Timeshare exchange programs allow trading with other resort units. Trades can be made in different locations for an additional fee. But these trades usually can't be guaranteed. There also may be limits on exchange opportunities. Most developers are affiliated with large exchange companies.

Timeshare Exchange Companies

Two major exchange companies are Resort Condominiums International (RCI) and Interval International (II). Buyers have more options when a developer affiliates with an exchange company. The exchange company allows all of the buyers who purchase at that development to be able to join the exchange company. The developer pays an initial fee to the exchange company. After, the individual timeshare owners are usually assessed an annual maintenance fee.

The exchange company provides owners with a directory of hundreds of resorts. An exchange company is a huge computerized reservation system that is also licensed as a travel agency. An individual can take the week that they own and trade it for a week at another resort anywhere in the world, provided that one is available. There's usually a fee for the exchange. There are also size rules, which allow trades to be equal or lower.

In most exchanges, a two-bedroom can be exchanged for a two-bedroom, but a three-bedroom would likely require additional charges. Both of the major exchange companies rate their resorts. Usually, one needs to give up a week at a top resort to get a week at another top resort. In RCI, the top-rated resorts are called “Gold Crown." In II, top resorts are called “Five Star."

A number of smaller exchange companies are also available to timeshare owners. These smaller companies are often regionally based.

Timeshare Sales Incentives

Timeshare resorts sometimes offer free lodging to potential buyers. This is done in exchange for attending a presentation. The sales presentation will have information about properties the developer has for sale. A free vacation certificate, referral, or rewards point system may be offered to guests. Offers vary, but they are often for a three-day, two-night stay at the resort itself or a nearby hotel.

Nearly all offers are subject to certain conditions, including age and income requirements. For couples, both spouses must usually attend a sales presentation. Upon arrival, participants are often asked to provide proof of identity. Advance deposits, which may not be refundable, are often required to guarantee the time. Any charge termed a processing fee is probably nonrefundable. If earnest money is legally treated as a deposit, refunds may be given at the location or at the end of the stay.

Problems During Sale or Exchange?

If you're facing challenges during the sale or exchange of your timeshare interest, you're not alone. Many individuals who are locked into timeshares often feel like they're out of options. But, like with all other businesses, regulation reigns over timeshare businesses. Timeshare developers and exchange companies are subject to strong consumer protection laws. If you're uncertain about your legal rights, get advice from a real estate lawyer today.