If your client is buying a timeshare, watch any loan he or she takes, warns Charles "Chip" Ballew, president of Timeshares.com in Indianapolis. It's tough to get a loan from a bank exclusively for a timeshare. "There are no interest rates under 14% on a timeshare-regardless of how good credit is," he says. Options may be to obtain special financing from a developer, pay cash or use a home equity loan or credit line.
Ballew advises that clients do their homework and analyze their vacation style before considering a timeshare. If a young couple plans to have kids 10 years from now, for example, they might consider buying a two-bedroom rather than a studio.
Beware of buying timeshares in foreign countries. In Mexico, for example, timeshares often are long-term leases rather than deeded interests.
"If you're considering owning internationally, you do have to be in contact with your resort each year. If it takes long-distance phone calls and you get someone who doesn't speak English, that can be really frustrating and expensive," Ballew says.
Also, watch for extra charges. Electricity use in Europe, for example, may be metered. Ballew suggests that clients research timeshares in advance at his Web site and others, including Timeshare User's Group at www.tug2.net and TimeSharing Today at www.tstoday.com.