There is a simple process to transfer a timeshare when you are looking to sell, or if you are looking to purchase an ownership. If you chose to use a licensed resale timeshare broker, most of the transfer process will be handled for you.
Since your broker will be doing most of the leg work for you, there may be times in your race to the finish line that feel like you’re out of the loop.
What better opportunity is there to empower yourself by learning more about the transfer process? Read on to learn, step by step, just what goes on during the transfer of a timeshare ownership and how long each step can take.
Getting the Transfer Started
Once you or your broker have found a buyer for your timeshare ownership, a contract (or earnest money agreement) is drawn up, laying out exactly what will be expected of each party. Of course, the contract still applies, if you are buying an ownership, rather than selling.
Closing Companies and Escrow
Once the contract has been executed by both parties, the purchase agreement will be sent to your closing company. At this point, the closing company will open an escrow account on the buyer and seller’s behalf, and any earnest money deposits will be collected and deposited for safe keeping. Leaving the buyer to send the remaining amount upon receipt of estoppel documents.
Some purchase contracts dictate the full purchase price must be paid into escrow, before the transfer agreement can be sent to the developer for review.
Either way, opening escrow and collecting payment generally happens within a few days of the closing company receiving the buyer and seller’s signed contracts, unless otherwise dictated in the contract.
Right of First Refusal
Once the contract has been processed, and escrow has been opened by the closing company, the agreement will be sent to the developer for review. Many developers have the right of first refusal and will require a (developer) specific amount of time to either: waive their right or purchase the ownership back at the set contact price.
If the developer decides to purchase the ownership, the buyer will need to find another ownership and the seller will have sold their timeshare for the contract price. The process of right of first refusal usually takes up to 30 days but each developer is different. If the ownership is not purchased by the developer, and the ownership is not past due in maintenance fees, an estoppel letter will be sent to the closing company.
Estoppel Letter
If the developer decides to waive their right, they will send an estoppel letter. The estoppel letter explains the status of the ownership and will outline whether the ownership is encumbered by any loans held with the developer, as well as the status of maintenance fees and taxes, and any other important information pertaining to the transfer of ownership.
Once the closing company receives the estoppel letter, they will compare your purchase agreement and the estoppel letter to ensure the information provided by the developer matches what the buyer is expecting to purchase.
Title Search
The title search is conducted to ensure that there are no irregularities with the property’s deed. A closing agent will investigate public records to see if the owner possesses clean title.
If the deed shows the another name other than the the name of the contracted seller, or the deed shows another party has partial claim to the title, the selling party cannot proceed with the transfer until rectifying the name-change or collecting all signatures from all deeded owners. This process ensures that your title is not clouded by the threat of another party popping up in 5 or 10 years, claiming that the selling party never had the legal right to sell the property.
Title searches can take up to two weeks, but can save you a lot of headache down the road.
Recording the Deed
If the title search comes back clean, the deed will then be recorded with the county where the property is located. This must take place to ensure that the buyer is recorded as the legal owner of the deed. The deed may be recorded with the county electronically or in person. When deeds are submitted in person, it will be recorded by the next business day. Electronic submissions can take up to six weeks to be processed. Once the deed is recorded with the county, it is sent to the developer for the name to be changed in their system. This name change can take around 2 weeks to a month.
Summary
As with any real estate purchase, buying timeshare property can be a lengthy process, all in all, averaging about 2-3 months of waiting. The bureaucracy of transferring property into or out of you name is there to ensure that what you are buying is legally yours and you are protected against fraud.
However, a licensed timeshare broker can take the bureaucratic burden off your shoulders. If you would like a free consultation about purchasing a timeshare ownership or if you would like to speak with an agent about selling your ownership, feel free to contact us.
