One way to check out a community where you are considering buying a second home, in terms of location, traveling time and available amenities is to use free or discounted timeshare promotional vacations.

Home equity to burn, favorable tax laws, and record-low mortgage rates are all converging at an opportune time to make buying your vacation home a dream come true, but getting to know your vacation's home is crucial before you move to finance the deal.

"Try-before-you-buy" mini-vacations offered by timeshare developments offer getaways for no more than a nominal fee, if that, provided you spend a couple of hours with the developers to learn about the development. (If you don't like the idea of a sales pitch, then see if a timeshare can simply be rented for a few days.)

"Most are mini-vacations of two nights and three days. You check in Tuesday and leave on Thursday and you have an obligation to take a tour of the property, but you've got the rest of the time on your own," said Carl G. Berry, principal with Resort Development and Advisorsa San Francisco-based resort developer.

You may even wind up deciding a timeshare is a better fit for your budget now and later buy a vacation home.

"It goes both ways. At different times in life it may be time for a timeshare or it may be time for a vacation home. It's common in places like Lake Tahoe and Hilton Head Island to first buy a home because you have kids and as the kids get older cash out of the house and buy a timeshare for a couple of weeks. Write your own scenario," said Berry.

Alamo, CA-based real estate investor John T. Reed, says it's also a good idea to talk to some of those long-time timeshare and vacation home owners to learn first hand of their experiences.

"Talk to some people who've been doing it for 10 to 15 years. People buy a vacation home and they are all excited and they are going up every weekend, they are working on the home, their kids are enjoying it, they are playing the tax deduction game, they are renting it out. Then maybe the kids don't want to go up, then the parents aren't going up because it's too far away or they are aging and they don't want to go where the snow is hip deep. It's hard to predict what can happen over time, but it's good to get input from long-time owners," says Reed.

To help you shop for your vacation home and to explore it's community, also hire another set of eyes and ears -- a neighborhood real estate agent familiar with the area's vacation home market and who is generally knowledgeable about such transactions.

"You need someone who is not only knowledgeable about the area you are interested in, you also need someone who can steer you to other areas. Even though they might not sell to you in their area, it behooves them to be knowledgeable about other popular areas," said Jan Tarnow-Hope, a manager with NAR in Chicago.

There's help on the Web too. EscapeHomes.com can not only help you find good agents, but also give you a virtual peek at 250 second home, vacation home, resort home and timeshare destinations you can tour online by city and state and by type (beach towns, cultural towns, island towns, quaint towns, spa towns, etc). The site also offers an extensive array of Top 10 Town Type lists, forums and other vacation home and timeshare information and services.

Financing Your Getaway

A good real estate agent familiar with the area is also likely to be familiar with lenders or brokers likewise familiar with the area and, as such, can offer the most affordable or flexible financing -- which is key to your transaction.

Not only can it be more difficult to qualify for vacation home financing, it can be more expensive.

"For exactly how much more it can cost, you need to speak with a lender, but the logic is that a vacation property represents more of a risk to lenders. If you run into financial trouble, which is the first mortgage you'll pay and which would you let slide?" asked Silver Spring, MD-based Peter Miller, author of "The Common-Sense Mortgage" (Contemporary Books, $16.95).

Timeshares typically are relatively less expensive because they pose far less risk to the lender.

"Timeshares are typically sold with installment loans. You miss a payment, you may lose title to the property," Miller added.

He also said, while the best rates are important, don't over look vacation home loan terms.

"You want the right to prepay the loan in whole or part and without penalty. Often, you buy a home with the idea to retire in it. If you sell your current home, you may have a lot of cash on hand and a desire to reduce the monthly expenses on your what was your second home. But if you can't make a prepayment without penalty you may be forced to pay and additional and needless cost," Miller said.

Also consider seller financing. Older owners often own properties free and clear. Some need extra income and are willing to carry a first mortgage.

Co-ownership, say with another family, is also an affordable option, provided you include in the deal a carefully worded contract with explicit shared-use and property-disposal clauses.

Finally, while financing your getaway dream home, keep in mind you'll want to protect your investment and, depending upon what you buy, homeowners insurance for a vacation home could also cost more than coverage for your primary residence.

"Insurance can be different and difficult, especially if you are say, five or six miles from the nearest fire hydrant. You'll need to learn if you have a well or a septic tank, how to set up and run things through the winter and how to winterize where it's cold enough to freeze pipes," said Walt Molony, a spokesman for the National Association of Realtors.

"There are lots of little things you don't think about. Typically, you will pay more for (insurance on) second homes than your primary residence, so you need to shop around a little for that too," Molony said.

(Note: This is the second of two related articles. To read the first installment, please press here.)

For more articles by Broderick Perkins, please press here.

Published: December 6, 2001

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.