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Is it Real Estate

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Anonymous

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I have been asked to appraise a time share in a condo-hotel in Atlantic City. The client says that she has a deed but she has never occupied the unit which she "owns" The client states that she stays in whatever unit the management provides and has her choice of weeks. Does anyone have experience with this type of time share?
 

Terrel L. Shields

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May 2, 2002
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Arkansas
Unusual covenants but I opt for it being real estate. It appears it might be a partial interest in that she had no rights to "that" condo, but if the deed says X definable space, I would opt for it being a discrete real property unit.
 

Mike Garrett RAA

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Jan 14, 2002
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Colorado
it's real estate. Time shares are very difficult to appraise...might constitute a "complex appraisal assignment" and require a higher license level, at least in my state. I am certified residential and steer away from them like the plague.
 

Mountain Man

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Jan 15, 2002
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Georgia
Yuck, timeshares! Very, very, high default rate in my area. Always see them in the forclosure ads for lack of paying their "maintenace fees". :? Maintenace Fees :?:
 

BarbaraNJ

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New Jersey
Two suggestions:

First, check the Appraisal Institute Website. They have many publications on obscure valuations and there may be something on Timeshares.

Second, consult the state board and ask what you have to do to be able to appraise this. Remember those USPAP regs about disclosing any inexperience to your customer and the responsibility to consult or use people with the necessary experience???
 
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Bemis Pownall

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check EBAY for sales, tons of them.
 

aprazer

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Feb 27, 2002
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Certified Residential Appraiser
State
New York
Run as fast as you can.

Very difficult to appraise, and they are notorious for having horrible re-sale values. Go to a search engine and put in "timeshare foreclosures"-see how many come up.
The owner typically has set weeks, which is a big influence on value. Each place has their weeks "rated". Off season is the cheapest. It is strange that they have never used the unit they own-it's your week so unless you give them the OK to rent it, it has to be available. The biggest timeshare company is called RCI. Look for them on the web.
 

Stone

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Feb 1, 2002
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Wisconsin
There is a company near the Wisconsin Dells (which is close to Madison) that sells time-shares in a similar way. The grantee buys into the local units, but what they really get is zzz amount of points. More money more points. The points are used to purchase different amounts of time at different locations around the world. The main issue is that convenient times require more points, as do better locations. This company has changed names a couple of times in the last decade.

The resale of these timeshares (and they are considered real estate, they count as second homes for mortgage and tax purposes) is virtually non-existent. People will try and sell them and get no takers. Without the high pitched sales tactics as well as the free TVs and trips, they can't get rid of them. Many end up giving them back to the company for free.

I have not, and would not, appraise one of these. Good luck.
 

Restrain

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Jan 22, 2002
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Florida
There's a big difference between initial sale and resale. The value of the initial sale is how much the salesman can gouge out of the sucker, er, buyer. The resale is often less than $1000. I have seen sales just to take over the maintenance fees. Check E-bay as mentioned earlier. Also, there's a C21 site that handles nothing but these sales. Look in the RE ads of the local paper for the timeshare. You'll probably find numerous listings. For that matter, your fee may be more than the unit's worth.
 

Steve Owen

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Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
I've never appraised one and hope I never do. But, I live close enough to Branson to be familiar with them. I've seen them both ways, but the covenants in yours seem a little unusual if she doesn't own a specific week. There are companies in and around Branson that purport to resell them, but I don't know a thing about the resale value. I believe they are real estate if she has a deed to a piece of it, but it is also possible to sell them in a way that is not real estate. In that case, the sucker, er buyer gets rights to occupy, but never takes title to the property. If it was me, I'd probably run.
 
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