Exchange Systems

An exchange allows a timeshare or vacation plan owner to trade units for a discrete time with another owner who has an equivalent unit at an affiliated resort within the system. Here’s how it works: A resort developer has a relationship with an exchange company, which administers the service for owners at the resort. Owners become members of the exchange system when they buy their timeshare or vacation plan. At most resorts, the developer pays for each new member’s first year of membership in the exchange company, but members pay the exchange company directly after that.

To participate, a member must deposit a unit into the exchange company’s inventory of weeks available for exchange. When a member takes a week from the inventory, the exchange company charges a fee.

In a points-based exchange system, the interval is automatically put into the inventory system for a specified period when the member joins. Point values are assigned to units based on length of stay, location, unit size, and seasonality. Members who have enough points to secure the vacation accommodations they want can reserve them on a space-available basis. Members who don’t have enough points may want to investigate programs that allow banking of prior-year points, advancing points, or even “renting” extra points to make up differences.

Whether the exchange system works satisfactorily for owners is another issue to research before buying. Keep in mind that, you will pay all fees and taxes in an exchange program no matter whether you use your unit or someone else’s.

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There are a number of ways to purchase a timeshare. It is important to understand the choices available because there may be $1000s of dollars at stake. It is very possible to save $1000 of dollars with the correct choice. This article will look at 3 of the most common methods of timeshare buying.

The most common method is to go to a timeshare presentation. Free vacation weekends are the usual method of attracting people to listen to a sales presentation. The salesmans job during a presentation is to keep their job by selling you a timeshare. Not necessarily putting you in the best vacation plan but simply selling you something that will earn them a commission. Timeshare salesman are not the best and most reliable source of information concerning the advisability of your purchase. The cost of the sales commissions and support staff salaries are all included in the cost of the purchase of your timeshare.

Timeshare resellers are the second most common source of timeshare purchases. These companies act as brokers and bring together property sellers and property buyers. When using a reseller service there are a number of things to consider. As a buyer you need to understand what type of fees they have that have been added onto the price. There are other fees to be considered in the transfer of ownership in addition to the price of the unit. Some of these fees include transfer fee, title search fee, any state transfer charges, unpaid maintenance fees and any special assessments that might be due. You should also make sure you know when your use of the vacation plan will begin. If there are any banked weeks that is great news.

As in all purchases when the middleman is cut out you will get a better price. Buying a timeshare directly from an owner is best and many listings can be found on the internet. Of all the places that list these timeshare my favorite place is Ebay. As an example, I have seen one specific timeshare listed for as little as $1000 in a resort that is presently selling the exact plan for around $15,000. Now that is an incredible savings. In buying a timeshare directly from an owner all of the same fee precautions need to be considered as when buying through a reseller.

It is important to remember the old warning - buyer beware. Researching all aspects of your purchase is the surest path to success. The advantages of buying a timeshare directly from an owner are incredible. Using the above example you would see a savings of $14,000 not including the cost of interest. Amazing.

Arnold Brod has years of timeshare experience. To learn more visit Timeshare Buying at http://www.timeshare-buying-scams.com/how-to-buy-a-timeshare.php.

The thought of owning a vacation home may sound appealing, but the year-round responsibility — and expense — that come with it may not. Purchasing a timeshare or vacation plan may be an alternative. If you consider a timeshare or vacation plan, the Federal Trade Commission (FTC), the nation’s consumer protection agency, says it’s a good idea to do some homework.

The Basics

Two basic vacation ownership options are available: timeshares and vacation interval plans. You should know that the value of these options is in their use as vacation destinations, not as investments. Because so many timeshares and vacation interval plans are available, the resale value of yours is apt to be a good deal lower than what you paid. Both a timeshare and a vacation interval plan require you to pay an initial purchase price and periodic maintenance fees. The initial purchase price may be made all at once or over time; periodic maintenance fees are likely to increase every year.

Deeded Timeshare Ownership. In a timeshare, you either own your vacation unit for the rest of your life, for the number of years spelled out in your purchase contract, or until you sell it. Your interest is legally considered real property. You purchase the right to use a specific unit at a specific time every year, and you may rent, sell, exchange, or bequeath your specific timeshare unit. You and the other timeshare owners collectively own the resort.

Unless you’ve bought the timeshare outright for cash, you are responsible for paying the monthly mortgage. Regardless of how you bought the timeshare, you also are responsible for paying an annual maintenance fee; property taxes may be extra. Owners share in the use and upkeep of the units and of the common grounds of the resort property. A homeowners’ association usually handles management of the resort. Timeshare owners elect officers and control the expenses, the upkeep of the resort property, and the selection of the resort management company.

“Right to Use” Vacation Interval Option. In this option, a developer owns the resort, which is made up of condominiums or units. Each condo or unit is divided into “intervals” — either by weeks or the equivalent in points. You purchase the right to use an interval at the resort for a specific number of years — typically between 10 and 50 years. The interest you own is legally considered personal property. The specific unit you use at the resort may not be the same each year. In addition to the price for the right to use an interval, you pay an annual maintenance fee that is likely to increase each year.

Within the “right to use” option several plans can affect your ability to use a unit:

Fixed or Floating Time. In a fixed time option, you purchase the unit for use during a specific week of the year. In a floating time option, you use the unit within a certain season of the year, reserving the time you want in advance; confirmation typically is provided on a first-come, first-served basis.

Fractional Ownership. Rather than an annual week, you buy a large share of vacation ownership time, usually up to 26 weeks.

Biennial Ownership. You use a resort unit every other year.

Lockoff or Lockout. You occupy a portion of the unit and offer the remaining space for rental or exchange. These units typically have two to three bedrooms and baths.

Points-Based Vacation Plans. You purchase a certain number of points, and exchange them for the right to use an interval at one or more resorts. In a points-based vacation plan (sometimes called a vacation club), the number of points you need to use an interval varies according to the length of the stay, size of the unit, location of the resort, and when you want to use it.