Selling a home
Your guide to successful home sales
Seller’s usually only pay commission and buyer’s usually pay closing costs and transfer fees.
Hawaiian Timeshare? Foreign Seller? There are other fees to watch out for.
In a timeshare resale transaction, if you’re a domestic U.S. seller using a broker that doesn’t charge any upfront fees you should only pay a commission. As a seller, you will want to avoid a broker that tries charging you for any more than the commission for something like a service fee.
However, if you’re a seller from a foreign country, you will run into FIRPTA (Foreign Investment in Real Property Tax Act of 1980). The Internal Revenue Service (IRS) will hold funds from the sale which you can get back once you prove you didn’t make any money from the sale of the timeshare. You can either file the paperwork yourself to get refunded, or pay a CPA to get the money back for you. The closing company will also charge a foreign seller a fee for completing their portion of the FIRPTA paperwork($100-200).
Furthermore, if you are any seller of a Hawaiian timeshare, the state of Hawaii will charge you for their version of FIRPTA. It’s called HARPTA which is an acronym for “Hawaii Real Property Tax Act”. This is a Hawaii State law that requires a withholding of 7.25% of the sales price. 7.25% of the sales price. If you have no gain on your Hawaiian timeshare you will probably get ALL of the withheld back as a refund.
Commissions vary as there is no standard amount. However, when choosing a broker remember that the commission you pay could very well be split between brokerages. Since there are so many comparable timeshares for sale as yours, if you’re not paying a high enough commission the other broker with a buyer will simply call the next seller.
If you’re ‘commission shopping’ to find the cheapest commission possible, remember you get what you pay for. A broker on the lower end of the scale is often very green or desperate. They might do or say anything to get your business, and because they’re new or desperate, their chances of botching this important transaction are magnified.
Buyer’s typically pay: closing company fees; Developer transfer fees; administrative fees; recording fees; education fees.
Sometimes a seller will not be able to locate their original owners certificate. If selling a Marriott Vacation Club property, Marriott will charge about $35 for a replacement certificate. Marriott may even waive the $35 fee.
Buyer’s will sometimes make an offer where the seller pays closing costs…or splits closing costs. A good resale broker with lots of transactions closed will be able to guide you through the process of determining if an offer is a good one or not. Choose a timeshare resale broker who only gets paid from the proceeds of a closed sale to sell your timeshare.