The Vine: May 29, 2013
I own a charming cottage timeshare in Sedona, but I made a mistake choosing to buy it.
Going to the timeshare presentation in the first place was probably a bad idea — I’m kind of a sucker. I’m not dumb; I don’t fall for check or internet scams, but a good salesman who has (paid for) my attention for 90 minutes could probably convince me of anything.
Now that it's been a year, I’ve realized it’s not worth the money to me. I paid about 10K for a week every other year. The resort offered me less than 2K to buy it back. If I’d paid cash, I might have just cut my losses. But I still owe 8K on a 13% loan.
First, can I sell it? I contacted two realtors, but neither of them had a clue. I'd like to know if there's "a place" or "a person" that specializes in selling timeshares, and of course whether I can get anywhere near what I owe for it.
I’m not usually this terrible with money (I got caught up in the moment!), so it pains me to think about the loan terms. I want to get rid of this debt badly, but I know opening an assortment of 0% credit cards to pay it off is probably a dumb move. I am wondering whether refinancing my house to cover this loan makes any sense. I owe probably 15-20% under the value of my home. Even though I bought my house in 2009, mortgage rates are quite a bit more favorable than the 15-year 4.5% one I have.
At the end of the day, I just want to know how to best minimize what I pay for this thing. What are my options?
Staying away from extended sales pitches
I would get a real-estate attorney. Explain the situation as you understand it, turn over all the relevant paperwork, decide what's more important to you — getting what you owe, or getting out of it — and advise her to formulate a plan based on that goal. I've never considered a timeshare of this type, primarily because I've heard so many horror stories about people overestimating the time they'd spend there and how trying to get out of the damn thing turned into a part-time job. Prepare to spend a little more money so that someone else with realty/contract experience can represent you.
If it's more important to you to get full value, see if you can't make some money back with a sublet of some sort — nothing illegal or sketchy, just letting friends use the timeshare and giving you some money if possible. But I would set my sights on dumping it, honestly. Take the resort's offer, and focus on paying down the loan, which should be a regular reminder for a while that owning property you don't live in is…for rich people.
Yes, you should probably look into refinancing your house anyway, but as far as the timeshare, hire someone to translate the situation for you and/or get you out of it.
Tags: budget 'n' finance