Nobody enjoys the feeling of buyer’s remorse, and it’s especially tough when it involves a significant purchase like a timeshare. If you recently bought a timeshare and regret that decision, it is possible to cancel your contract.
But it’s not easy, and you’re going to need to act quickly. Your ability to cancel the contract mostly depends on the laws in the state where you purchased the timeshare. And the longer you wait, the less likely it is you’ll get your money back.
If you’ve attended a sales seminar on buying a timeshare, you know what a high-pressure environment it is. These presentations often last for several hours and are full of aggressive sales tactics.
Often, presenters will tempt you with wine, free dinners or free tickets to incentivize you to open up your wallet. It’s easy to get caught up in the moment and commit to something you’re not quite ready for financially.
Many people invest in a timeshare, then review the contract and realize they’re getting a terrible deal. Besides, timeshares often come with extra expenses that weren’t disclosed upfront.
That’s because the initial sales price is usually only the tip of the iceberg. Some resorts will add on real estate fees during the initial sale, like transfer fees.
And some timeshares charge annual fees that vary from $300 a year to more than $1,000 per year. You may also have to pay property tax fees and occasional assessment fees.
Plus, it’s easy to overestimate how often you’ll be able to use a timeshare. When it comes right down to it, you may not have the time, desire or money to fly to your timeshare in Florida several times per year.
All of this can lead to a case of buyer’s remorse and an eagerness to get out of your timeshare agreement. But it’s important to understand that a timeshare is no ordinary purchase.
When you agreed to purchase the timeshare, you entered into a legally-binding agreement with a real estate developer. The contract is enforceable in most cases unless you can prove that fraud took place.
The FTC has a three-day “cooling off period” for large purchases, but unfortunately, it does not apply to real estate transactions. However, most states do give buyers a short window of opportunity to cancel their contracts.
So if you’re looking for ways to get out of your timeshare contract, you’ll want to start by researching the laws in the state where you purchased the timeshare. Find out how long you have to cancel the contract and whether there are special protections in place for buyers.
Here is an overview of the timeshare laws in several states:
- Alaska: provides special protections to buyers, and gives you 15 days to cancel after receiving the public offering statement
- California: affords special protections for buyers, and the state gives you seven days to cancel after receiving the public offering statement
- North Dakota: the only state that doesn’t have a timeshare cancellation law
- Vermont: gives buyers the right to cancel the contract within three days after signing if the transaction was a home solicitation sale
If your state doesn’t give you the right to cancel, make sure to check your timeshare agreement. The contract may outline a cancellation right.
Now that you’ve decided to cancel your timeshare, how do you go about doing it? You want to act quickly, but you also want to be strategic about it, or you could miss the cancellation window altogether.
Here are four steps you can take to cancel a timeshare contract:
1. Find Out the Cancellation Period
The first step is always to find out how long you have to cancel the contract. Check your agreement to see if it outlines a cancellation window.
If the contract doesn’t outline a cancellation period or you disagree with it, check your state’s laws on timeshare contracts. You can also reach out to your state’s consumer protection office to find your options.
2. Notify the Seller in Writing
Now that you know the cancellation window, it’s time to take steps to cancel your contract. Some sellers may allow you to cancel the deal verbally, but this isn’t a great strategy.
Unlike a written notice, a verbal agreement doesn’t leave you with any proof that the seller received your notice or agreed to your terms.
You’ll want to send the seller a letter notifying them of the cancellation.
Here’s the information you’ll need to include:
- The current date
- Your name as it’s written on the contract
- Your contact information, including your email address, phone number and home address
- The name of the company you purchased the timeshare from
- The date you purchased the timeshare
- A statement informing the company that you’re canceling your timeshare contract
One thing you don’t have to include is your reason for canceling the timeshare agreement. You have the right to change your mind about the purchase.
However, check to see if your state requires additional information in the cancellation notice.
3. Deliver the Cancellation Notice
Once you’ve written the cancellation notice, you want to put some thought into how you deliver it. Don’t just assume you can just mail off the letter, and it cancels your contract.
Your state may specify a certain way that the cancellation notice must be delivered. Or the timeshare contract may outline instructions for how you can cancel your agreement.
Check to see if you need to deliver the notice in person or if you need to send it through certified mail. If you fail to follow these guidelines, then your timeshare cancellation may not stick.
4. Identify if Fraud Occurred
If the cancellation period is already up, you may still be able to cancel your contract if you believe that fraud occurred. If the seller lied about interest rates, failed to notify you of the cancellation period or misled you in any way, you may have a case for fraud.
If you believe that you’ve been the victim of fraud, it’s good to contact a real estate attorney. An attorney will help you figure out what your options are and identify your next steps.
But what if you don’t have a case for fraud and the cancellation period is already long gone? If canceling your contract is no longer an option, you may want to look into reselling your timeshare.
Let’s look at five steps you can take to resell your timeshare.
To get started, you’ll want to understand the details of your current timeshare agreement. Where is the property located? What is the size, and what kind of access do you have?
For instance, some timeshares only give you access during specific weeks throughout the year. You’ll also want to find out who has the deed to the property.
Next, you’ll want to figure out the real value of your timeshare. Don’t make this estimate based on what the salesperson told you — they likely inflated or exaggerated the value to get you to buy.
Be sure to check out other timeshares on the market that are similar to yours. Look online to see the sales price of comparable timeshares. This information will give you a more accurate idea of how much your timeshare is worth.
Step 3: Figure Out Your Options
Now it’s time to find out your options for selling the timeshare. If you don’t want to sell your timeshare on your own, you can enlist a professional real estate agent to help you.
But if you go this route, don’t just ask your next-door neighbor who got their real estate license earlier this year. Hire someone who has specific knowledge about timeshares and will understand the complexities of your situation.
If you want to try to sell the timeshare on your own, you can list it on sites like Craigslist and eBay. You can also try Redweek.com, which focuses specifically on timeshare sales. However, some of these sites will charge fees to sell your property.
You should also check with the timeshare company to see if they have an option to surrender the timeshare after a one-time fee. Taking this route may be expensive, but it could be worth it if it helps you get rid of your timeshare.
If you’re not having any luck selling your timeshare, you can also look into working with a timeshare exit company like Newton Group. Instead of selling your timeshare for you, these companies help you find ways to get out of your timeshare agreement.
But make sure you research any company you’re considering working with. And watch out for companies that make promises that seem too good to be true.
It can take up to 18 months to exit out of a timeshare agreement. So you should be wary of any companies that promise they’ll have it taken care of within just a few months.
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Step 5: Have Low Sale Expectations
And finally, don’t expect to make a lot of money on the sale of your timeshare. Some people don’t make any money from the sale of their timeshare, so you’ll be lucky to break even on the money you put into it.
It’s disappointing to know you made a bad investment and lost money, but don’t let this impact your decision-making process. Make it your goal to be rid of the property, and its expensive fees and move on. Simply commit to investing your money wisely in the future.
What Happens If You Stop Paying
If you can’t cancel your timeshare contract and are having a hard time selling it, it may be tempting to stop making payments altogether. This impulse is especially true if you’re in over your head financially.
The costs and fees that come with a timeshare can be difficult to manage. But defaulting on your timeshare could have serious long-term financial consequences.
If you stop making your payments, the first thing you’ll start to incur is hefty late fees. And you’ll likely be reported to collections which will cause your credit score to take a hit.
Negative marks on your credit report stay there for up to seven years. A poor credit score will affect your ability to take out loans in the future.
If you continue to miss your payments, the timeshare company will foreclose on your property. A foreclosure can cause your credit score to drop by as much as 100 points, which will have a devastating impact on your credit score and financial future.
Not to mention, you’ll likely have to pay attorney fees, interest and fines along the way. So while it may be tempting to walk away and try to forget about the timeshare altogether, this is always a mistake.
The Bottom Line
Canceling a timeshare contract is possible, but it may be difficult. The first step is to find out your state’s cancellation window and see if you’re still able to cancel.
If you are, you can write a cancellation letter and deliver it to the timeshare company. And if you’re struggling to get out of your contract, you might consider consulting with a real estate attorney for advice on your situation.
If you’ve missed the cancellation window, there are other options to get rid of your timeshare. You can try to sell the property or work with a timeshare exit company to get out of the contract.
Just make sure you continue making your monthly payments on the timeshare until you’ve finalized your exit strategy. The timeshare is a temporary financial mistake, but ruining your credit will stick with you for at least the next seven years.
Have you ever fallen for a lousy timeshare deal? How did you manage to get out of your contract?