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Can You Do It By Yourself?

This is an attempt to give you some ideas about cautions you should exercise and maybe even some thinking about whether it is such a good idea to take on all these responsibilities yourself. There are some good reasons for having a Licensed Broker or other real estate professional involved. It is not, however an absolute requirement. There may be some people who would take out their own appendix. Now you know where I am coming from and that I am unabashedly biased in terms of involving a professional when it makes sense.

Your friend Joe hasnt been able to use his week at your resort for several years and has decided (correctly) that he should sell it. His price is reasonable and you agree to buy it. Your first step is to make sure Joe owns it. Dont make the mistake of thinking he is such a good guy he wouldnt lie to you. He may be absolutely honest, but we have just had so many cases where people were confused about what they owned, how it worked and what name they had used to acquire it. They may have forgotten that they put it into a trust or believe it really doesnt matter that they did. If the paper work isnt correct you might just as well have a deed to the Brooklyn Bridge. Fortunately, you dont have to accuse Joe of lying to you (chances are he is giving you the best information he has). Just ask to see his documentation. He should be able to produce his Grant, Warranty or Quit Claim Deed, mortgage papers, the CC& Rs to the property, the most recent tax bill, the dues bill, etc. In addition, ask him if he has put the title into a trust or otherwise conveyed it elsewhere. The most common problem is that they will add their four kids (so the kids can call for reservations) to the Deed and record it. In most cases that creates a title nightmare all of which must be unraveled. It can also be indicative of more problems if you know what to look for. If not, it is probably time to bring in a professional, as you probably will sooner or later.

Next, call the resort and determine the dues status. It is not uncommon that people have not paid the most recent dues or even several of them. The minute you take title, all those bills Joe didnt pay become yours. Congrat-ulations.

If taxes are collected directly from the timeshare Owner rather than through the Association, next call the Tax Collector for the county where the resort is located. Determine that the taxes have all been paid up to date. Many times this is an automated voice mail system and you can usually get an answer within a half-hour or so. You must have the Assessors Parcel Number from the tax bill to be able to do this.

How about the status of the exchange? Does he have weeks banked? Who is going to pay for the exchange fees? Does Joe want to give you the remaining Exchange Company membership or do you want to buy it? The Exchange Companies will not divulge Member information unless you pose as the Member and give them your Member Number. Hopefully this is part of the information you got from Joe.

Are you going to use an escrow? How about Title Insurance? Who is going to pay for these? In Southern California the Seller normally pays for the Title Insurance, but in Northern California the Buyer normally pays. These customs vary from state to state and even within a state. What is normal where you live? Should you even bother with Title Insurance? As a broker we wont sell a property without it, but if you were only paying $500 for the timeshare title insurance would not be worth it. You are better off just self-insuring and if you lose, you didnt lose much.

If a loan is required by the Buyer to satisfy the cash demanded by the Seller it must be obtained. There are lenders specializing in timeshare re-sale financing. Another alternate is that the Seller may be willing to take back a note as part of the purchase price. These need to be correctly drafted within the laws of the county and state where the property is located. Now what steps are required to protect the Seller against non-payment by the Buyer? All this gets pretty involved and is probably best accomplished by an escrow, para-legal, attorney, real estate broker or other professional. There are many pitfalls to doing these things yourself and then having them go wrong, the least of which is that you could be sued for more than the purchase price.

Assuming you still want to keep trying to take out your own appendix or that you simply cant find a reputable broker who handles that property, your next step will be to order the TimeSharing Today Document Kit. Although it is generalized to cover all states (and probably beyond) it provides an effective checklist of issues which should be covered. It also provides adequate documentation to start the process. Also contained is a generous supply of forms and letters that may be used. It will guide you along the lines of what should be considered and provide you a purchase and sale document. Even this Do it Yourself kit recommends that you hire some professional help at this point whether it be a real estate broker, an attorney, a title agent or an escrow agent to handle the intricacies of closing. This is similar to doing your own tax return. Are you really taking all the deductions to which you are entitled? Are you setting yourself up for an audit? Good professionals usually pay for themselves. We all recommend that you do not handle the whole thing yourself. Too much specialized knowledge is required.

Now that you have done your homework, if you decided to forego escrow and title insurance, your next step will be draw a deed, get it signed and notarized by the Seller and swap the deed to the timeshare for a check for the money you agreed to pay. If the deed is incorrectly drawn or the check is no good, one or both parties may be out in the cold. As you can see, the licensed broker or professional does earn his or her fee.

After you have closed the deal, there is still much to be accomplished. The resort must be notified. In most cases the resort Management Company will charge a fee to make the changes in their records resulting from the transfer. The same is true of the Tax Collector and exchange companies.

Lets say you have now decided against doing it yourself and plan to hire a broker. Here are the rules:

As a Seller, never ever pay a front, listing, appraisal or any other advance fee. As has been discussed here many times, this is almost always a clear signal of an impending rip-off. Check out the proposed professional. Are they licensed in the state where the property is located? Are they with the Better Business Bureau? Does the resort know of them? Can they give you referrals? What do the referrals say?

As a Buyer, insist on getting someone that really knows what they are doing involved in the details. Do the same checking on them that is recommended above for the Seller. You are better off bringing in this person relatively early in the process. (Say right after you have agreed on what the transaction should be). Discuss professional fees beforehand. Realize that if you choose to go without any professional help at all you may have saved money on the appendix operation, but the patient died.