If you are attempting to sell a timeshare, you may be told that it is crucial for you to pay for an appraisal. Don’t believe it. While it is helpful to know the market value of your timeshare, there are strategies to ascertain that value without having an appraiser. In fact, the only individual involved with a timeshare sale who would require an appraisal are the buyer–he probably doesn’t even need one, either.
Function
When you buy a home, your mortgage lender typically requires an appraisal of the property, because the residence will serve as collateral for your loan. If you default on the mortgage, the creditor may foreclose on the home, sell it and, in theory, get back its money. The appraisal informs the creditor how much the property is worth, and the lender will issue a loan based on that value. Appraisals are standard in traditional property –but timeshares aren’t traditional property.
Significance
Typically, when folks buy a timeshare, they either pay money for it or they simply take out a”consumer loan”–not a mortgage–to fund the purchase, based on Jason Tremblay of The Timeshare Authority. Taking out a consumer loan is similar to paying for something with credit card. The sum you may borrow is determined only by your own creditworthiness, not by what you plan to do with all the cash. Think about it: If you hand over your credit card to buy a new suit or a TV set, the credit card company doesn’t require you to justify the price of the lawsuit or the TV. When it’s within your credit limit, then you can buy it. The lender doesn’t care how you use the cash, only that you pay it back. So it’s with all the loans most people buy for timeshares.
Consideration
Though uncommon, it certainly is possible for a buyer to fund a timeshare having a mortgage or some other”secured loan”–which is, one backed by collateral that the lender may choose if the buyer defaults on the loan. If that’s the case, the lender may require an appraisal. But here is the important point for vendors to recall: The buyer’s lender will hire its own appraiser to evaluate the value of the timeshare; it is not going to take your word for this –or your own appraiser’s term for it. Your appraisal is meaningless to this purchaser.
Caution
Appraisals are ripe for scams and rip-offs, according to the Timeshare Users Group, which asserts 40,000 members. Some agencies which list timeshares for sale demand –or at least strongly suggest–that you get an appraisal before placing a timeshare in the marketplace. These agencies subsequently steer you to”authorized” appraisal companies, which are usually affiliated with the bureau, if not owned by it outright. In such cases, the appraisal is just a way to pad the agency’s profit. Other instances,”buyers” will provide to purchase your timeshare–subject, of course, to an appraisal that you have to pay for. The”buyer” has no intention of purchasing your timeshare; he’s only there to squeeze you for appraisal fees.
Expert Insight
A valid broker will have the ability to evaluate the market value of your timeshare without charging you a commission. She will do it by looking at comparable timeshares on the market, as well as those recently sold. If a broker insists in an appraisal to sell your timeshare, find another broker.