What Is the Average Cost to Get Out of a Timeshare?

Exiting a timeshare involves various expenses. While a single “average cost” remains elusive due to numerous variables, understanding the types of costs associated with different exit methods is important for informed decision-making.

Factors Influencing Exit Costs

The financial outlay to exit a timeshare varies significantly based on several factors. These include the specific timeshare property, its location, and market demand. Ownership type, such as a deeded interest or right-to-use contract, also affects transfer complexity and cost.

Outstanding financial obligations, like a mortgage or accumulated unpaid maintenance fees and special assessments, often represent the largest hurdles. Additionally, the chosen exit method—selling, gifting, using an exit company, or legal action—each carries distinct expenses. The timeshare’s current market value or desirability also impacts the feasibility and cost-effectiveness of certain strategies.

Costs of Common Exit Strategies

Different approaches to exiting a timeshare come with varying cost structures, ranging from administrative fees to significant legal expenses. Understanding these costs can help timeshare owners evaluate their options.

Selling the Timeshare

Selling a timeshare on the resale market often involves several types of fees. If a timeshare broker is engaged, commissions typically range from 10% to 30% of the sale price, though some may charge up to 50%. Real estate agents on the secondary market might earn lower commissions, often between 3% and 5%.

Sellers also encounter closing costs, which can range from $300 to $500 for closing company services like document preparation and verification. Total closing fees, including title agency, resort transfer, and legal assistance, can reach $2,000 to $2,500. Resort transfer fees, charged by the timeshare developer to change ownership, commonly range from $250 to $700. Owners selling independently might incur advertising or listing fees, typically $50 to $500.

Timeshares often sell for very little on the resale market, sometimes for a nominal amount like $1, yet selling costs can still be substantial.

Gifting or Donating the Timeshare

Gifting or donating a timeshare can incur legal and administrative fees. Legal fees for drafting transfer documents, like a new deed, plus recording fees, can cost around $250. Overall transfer costs, including transfer agent services, recording fees, and taxes, typically range from $300 to $500 or more.

Resort transfer fees are also common in these transactions, charged by the developer to update ownership records. This option is generally feasible only if the timeshare is fully paid off and all maintenance fees are current.

Deed-in-Lieu of Foreclosure or Resort Buyback Programs

Some resorts offer deed-in-lieu of foreclosure or buyback programs, allowing owners to return their timeshare directly to the developer. These programs are often less expensive, with administrative fees typically ranging from $500 to $2,500. A resort might accept a deed-back without fees if the account is current.

Participation in these programs usually requires that any outstanding loan balance be paid off and that all maintenance fees be up-to-date. These options are entirely at the resort’s discretion and are not universally available.

Timeshare Exit Companies/Advocacy Groups

Timeshare exit companies help owners cancel contracts, typically charging flat fees. These fees commonly range from $4,000 to $15,000, with prices often higher if an outstanding mortgage exists. Some companies may have starting rates upwards of $5,000, with costs potentially reaching tens of thousands of dollars in complex situations.

These fees generally cover negotiation with the timeshare developer, paperwork preparation, and legal review. Initial consultation fees can range from $100 to $500. Owners should exercise caution with companies demanding large upfront fees without guarantees.

Legal Action (Lawsuits)

Pursuing legal action against a timeshare company is typically the most expensive and time-consuming exit strategy, reserved for specific circumstances like fraud or misrepresentation during the sales process. Attorney fees can be structured in various ways. Hourly rates for timeshare lawyers generally range from $200 to $500. Flat fees for simpler cases often fall between $3,000 and $7,000, but can exceed $10,000 for complex litigation. Some attorneys may also offer contingency fees, taking 20% to 40% of the savings achieved for the client.

In addition to attorney fees, court filing fees and other legal expenses, such as deposition costs and expert witness fees, can add considerably to the overall cost.

Addressing Outstanding Financial Obligations

Beyond the direct costs of exit strategies, timeshare owners must address existing financial obligations. These often represent the largest components of the total expense and are typically unavoidable.

Outstanding Timeshare Loan Balance

An outstanding loan balance on the timeshare almost always needs to be paid off. This holds true regardless of the chosen exit method, unless the timeshare is foreclosed upon or a deed-in-lieu agreement waives the remaining balance. The full payoff amount can be the single largest cost, potentially thousands or tens of thousands of dollars. A mortgage can significantly increase fees charged by timeshare exit companies or attorneys due to added negotiation complexity.

Accumulated Maintenance Fees and Special Assessments

Timeshare owners are responsible for annual maintenance fees and any special assessments. These fees must typically be paid up-to-date for any legitimate exit method, including selling, gifting, or resort buyback programs. Average annual maintenance fees currently range from $1,000 to $1,260.

If an owner falls behind, back fees and penalties can quickly accumulate. Even if a timeshare is foreclosed upon or abandoned, resorts or collection agencies may still pursue unpaid fees, which can negatively impact credit scores. Special assessments, covering large, infrequent costs like major renovations, can vary but might average between $10 and $50 per month, or amount to thousands in a single charge.

Tax Implications

Exiting a timeshare can have tax implications, particularly if a loan balance is involved. If a timeshare loan is settled for less than the full amount, or if debt is forgiven in connection with a foreclosure or deed-in-lieu, the forgiven amount may be considered taxable income by the Internal Revenue Service (IRS). Lenders are generally required to report forgiven debt to the IRS.

The taxability of this canceled debt depends on various factors, including whether the loan was recourse or non-recourse, and if any exclusions, such as insolvency or bankruptcy, apply. While this article does not provide tax advice, owners should be aware of these potential tax liabilities and consult with a tax professional.