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YOUR MONEY: What You Should Know About Timeshares

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Now that the holidays have come and gone, many people dream of taking a tropical vacation or spending time near a popular summer attraction. If you’re shopping for a getaway, you may have considered a timeshare, an arrangement that generally gives you the right to stay at a certain property for a specified amount of time each year. 
         There are more 1,500 timeshare resorts in the United States, according to the American Resort Development Association, and the average sales price is just over $20,000 per unit. If you’re thinking of spending your free time at one of them, the New Jersey Society of CPAs (NJCPA) offers this advice. 
Know What You’re Buying
First, it’s important to understand that a timeshare does carry financial risks. Consider all your expenses in making your decision, including any related financing costs, broker fees, annual fees or related charges. In addition to buying from a developer, you might also consider buying on the resale market, where current owners sell their timeshares. 
         Be aware that your timeshare can lose value when you decide to sell it. Experts note that it is unlikely to increase in value over time. 
         Also, if you’re uncertain you will want to return to the same resort each year, look for arrangements in which you can swap your rights or use points to stay at different locations. 
Get the Background
A glossy brochure may make the resort seem appealing, but don’t buy before you visit the location to be sure you’ll enjoy spending your vacations there and that you’re satisfied with the quality of the units and other amenities. A visit will also give you a chance to talk to other timeshare owners and find out about their experiences. 
         It’s a good idea, too, to check if complaints about the seller, developer or management company have been filed with the state attorney general’s office, local Better Business Bureau or other consumer protection agency.
Take Your Time Before Signing
Study the contract carefully before you agree to buy, and be wary of sellers who pressure you into signing. Make sure the contract specifies the price you’ve agreed to pay, the annual maintenance fee and any other obligations you’re taking on. Check, as well, to be sure that anything you’ve been promised—certain time periods when you can use your unit and amenities available to you, for example—are noted in the contract. 
         The agreement should also detail how long you have to cancel the deal if you change your mind, a period that may be set by state law. 
         In addition, according to the Federal Trade Commission, timeshares outside the United States aren’t subject to U.S. laws, so it may be advisable to determine the seller, developer and management company’s legal requirements in the country where the timeshare is located.  
Be Wary of Fraud When You Sell
The FTC cautions owners to be skeptical when using a timeshare reseller. Find out if the reseller has a real estate license and, once again, check for any consumer complaints against the reseller. Don’t work with a reseller that requires an upfront fee. Get the reseller’s promises in writing, including the expected time necessary to complete the sale and the total fees you’ll pay. 
Consult Your Local CPA
Is a timeshare purchase a good decision for you? Your local CPA can help you determine the answer to all your financial questions. Turn to him or her for advice on any financial concerns. 
If you don’t have a CPA, you can easily locate one online using the NJSCPA’s free, online Find-A-CPA service. Just go to, and in a few clicks you can locate a highly qualified professional who can assist you.
         To find more information on various personal financial matters, visit the NJSCPA’s public service website at While visiting, you can subscribe to Your Money Matters, the NJSCPA's free, monthly email newsletter to receive valuable personal financial planning advice throughout the year.
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The Money Management columns are a joint effort of the AICPA and the New Jersey Society of CPAs, as part of the profession’s nationwide 360 Degrees of Financial Literacy program.
Copyright ©2014 The American Institute of Certified Public Accountants.