The Two Types Of Timeshare Purchases

By Amy E. Feldman

PHILADELPHIA (CBS) -- You know that vacation club you just bought into? It's a timeshare.

According to Rick Pons, who just published a book called "Lying for a Living" about his career as a timeshare salesman, the word timeshare has such negative associations for people that salespeople don't even call it that anymore, instead marketing the ownership as "vacation clubs," "all inclusive clubs" or "fractional ownership clubs"—but that's what they are.

If you sat through a presentation for the promise of a free breakfast and have gone from thinking: we can't afford to buy to we can't afford not to, you need to know that there are happy timeshare owners, but you need some information before you plunk down your money.

First, understand that there are two types of timeshare purchases:  a timeshare estate where you actually own a deed to the property and get the benefits of ownership and equity, and a vacation interval also called a right-to-use timeshare which is less expensive and in which you have a right to use it but don't actually own it.  Ask which one you'd be buying.

Know also that timeshares are usually sold in one-week increments for a one-time cost plus annual maintenance fees—which may increase and often don't cover the costs of major repairs. So ask if there's a cap on maintenance fees. Also ask about the broker and closing costs you have to pay and your rights to resell so you know as much about the timeshare as the guy serving you the breakfast.