NEW YORK (CNN/Money) -
If you've attended a timeshare sales pitch for free Sea World tickets or a round of golf, you know how easy it is to walk out with not just the freebies, but a lifetime of annual vacation shares as well.
Trouble is, it's not so easy to dump that timeshare down the road.
Even as developers continue to lure new buyers, the market is flooded with timeshare owners who are paying $100 to $1,000 in annual maintenance fees on vacation shares they bought on impulse or can no longer use.
Renting is one way to cover annual costs, but that requires work and is never a sure thing. Selling is perhaps the best solution, though that, too, is easier said than done. Supply of resale timeshares so outweighs demand that owners find it nearly impossible to unload their shares short of giving them away.
Laurie Deitz, who purchased a timeshare in Whistler, British Columbia, is among them.
"I wasn't using it as much as I thought I would and found it was impossible to exchange my shares for the places I really wanted to go," said Deitz, who was paying about $260 (U.S.) in maintenance fees each year. When she called a real estate agent, "he told me there were 50 people in front of me trying to sell their timeshares through him."
Your worthless piece of heaven
Unlike most other real estate, timeshares typically don't appreciate in value. They're more like cars in that respect. "You don't buy a timeshare as an investment," said Bill Rogers, founder of the Timeshare Users Group (TUG). "You buy it because you want to use it."
You don't buy a timeshare as an investment. You buy it because you want to use it.
Founder of the Timeshare Users Group
Just as your car loses value the second you drive off the lot, so too does your timeshare. This is because developers typically add 40 percent to 60 percent onto the selling price to pay for their marketing expenses. After all, those free tickets and vacations they give away cost money. If you can sell your timeshare for half of what you paid, consider yourself lucky.
Fact is, most timeshares are still sold the old fashioned way - by a developer with freebies and a fine-tuned sales pitch - and few people realize that a resale market even exists. "Anybody selling in resale just doesn't have the demand," said Rogers.
Real estate agents know this to be the case. Although some do accept timeshare listings, they charge 25 to 35 percent commissions to sell this kind of property - more than five times their normal rate. Many also insist on up-front fees of several hundred dollars with no guarantee of success. "We strongly recommend that you avoid real estate agents who charge an up-front fee," said Rogers.
On the auction block
Online auction sites are something of a dream-come-true for people who want to divorce themselves from their timeshare obligations. In fact, timeshares became such a popular item that Ebay (EBAY: down $1.02 to $53.95, Research, Estimates) created a special section for it earlier this year.
"Right now we're selling about 1,000 timeshares a month," said David Coglizer, senior manager of real estate/timeshares for Ebay, noting that volume is growing at about 7 percent a week. In addition to the timeshares actually sold, people are using the site to rent their shares for the year.
The price of listing with an online auction is quite reasonable considering that you're reaching a national audience. On Ebay, you pay a flat rate of $50 to list your timeshare and, unlike most other Ebay listings, no final value fees.
Although some sellers and buyers use traditional payment methods, such as PayPal, buyers often use an escrow agent, says Coglizer. You'll also want to factor in title transfer fees, which range from $200 to $350 depending on where you live, according to Rogers.
TimeshareValues.com founders, Mike and Antonette Manoske, have been buying and reselling timeshares via online auction sites for years - with a good deal of success. Last year the couple bought and sold 300 properties. "We get about 20 calls a week from people who want to sell, but we have pretty tight criteria for what we'll buy," said Manoske.
Rather than leave frustrated timeshare owners out in the cold, the Manoske's direct them to their free e-book on how to sell your timeshare. The book covers the four "P's" of selling a timeshare - placement, pricing, process and payment.
After you learn your four "P's" it's also a good idea to go through property listings on the auction sites to see how other sellers present their property, what their minimum bids are and what kind of response they're getting from buyers.
Free for the taking
Fed up with paying annual maintenance fees yet unable to sell, many timeshare owners simply want to give their property away.
"At this very minute we're responding to an e-mail that says 'please take my timeshare,'" said Mike Manoske.
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You might first try giving your property to friends or relatives. (Of course, this may not be good for family relations if they eventually find themselves in the same predicament.) You can also try posting your offer in the classifieds or on timeshare-related message boards like TUG.
If you do decide to just give it away, your best bet is to "sell" it to someone for $1 and formally transfer the title, lest you continue to be legally bound to the timeshare and its annual fees.
An even better option is to contact some of your favorite charities to see if they accept timeshares as donations. Many nonprofit organizations use them for retreats or rent or sell them to raise money. The IRS allows you to deduct up to $5,000 without an appraisal, depending on the property's fair market value. You can also deduct any transfer fees you pay for the donation.
That's what Laurie Deitz eventually did. After hearing that the German Language School for Children in Seattle was accepting timeshares as donations, Deitz contacted the school. "It was a very straightforward process," said Deitz, who got a $5,000 tax deduction for her gift and rid herself of the annual dues she was paying.