Let me just say upfront that I have been selling the dream of timeshare vacations and ownership since 2002 and have recently opened a business to assist sellers in connecting with buyers. I don't sell "resale ads" or profess to "guarantee" a timeshare is sold but want to make it clear I have an agenda. I want to see this business cleaned up and the scam artist shut down.
Timeshare, Time-share, Time share. What these two little words evoke in the minds and hearts of Americans is amazing. To some folks who have been using a Vacation Villa since the 1980's or 1990's, there are many fond family memories associated with it. For others who have had a bad experience with one of the many companies involved in the "resale" area of the industry, it can leave a bad taste in your mouth.
Ownership of a Timeshare isn't the same as owning Real Estate in its’ true sense. As a result of the various ownership types, "Fee Simple" ownership of a fixed or floating week, a deeded interest, "Right to use" type or lease interest, points, etc. many people have purchased a "Vacation Ownership Interest", "VOI" without really understanding exactly what it is they own..
When the product purchased is no longer of real value due to any number of reasons, health issues, inability to understand how to use, no desire to continue to travel or desire to go on the once coveted family vacation, consumers often get high pressured into "listing" their ownership online or paying an appraisal fee in an effort to get it sold.
The great majority of theses trusting souls believe the sales agent on the phone and pay anywhere from $599 to $1,995 regularly and up to $4,000 reportedly to have their timeshare "listed". Which is strictly illegal in Florida where many if not the majority of these firms exist or were started.
The reality is timeshare is not traditional real estate by a long shot. According to the highest paid executive in this Industry quoted later, timeshare has to "Marketed". I believe no one ever bought a timeshare without the "pitch". This is true even if it's a small company utilizing online auction site behemoth,"Ebay.com", their ad's are full of good sales marketing material.
Whether it be by a licensed sales agent at Timeshares Only' International GMAC, Hilton, Hyatt, Sheraton, Marriott, or the biggest vacation ownership company in the world, the old Fairfield Resorts, the new Wyndham Vacation Ownership, every single buyer was "sold" a timeshare. No one ever woke up and said lets go to that timeshare presentation and buy timeshare today honey.
So why is it that so many "Resale" companies exist today when there are plenty of big and small developers out their selling the dream? Is this an un-served market?
No, it's an ignored element of the industry which once was preceded by a reputation of snake oil salesman's lies and deceit to sell swamp land in Florida type hotel and motel conversions of the 1960's.
Even one of the big boys, a large publicly traded Hotel company, trains their sales staff to "sell the resale" service feature of doing business with them during the timeshare tour. However, in the vast majority of cases, this claim falls short of actual consumer needs.
So, how can a Timeshare Developer address the needs of their current customers who decide to sell their VOI and at the same time balance what appears to be a blatant "conflict of interest". These timeshare companies need to continue to sell "new" timeshare to stay in business despite their claim to help owners sell their used VOI in their time of need.
If someone can no longer afford to pay the "Maintenance fees and Taxes" to have the right to use their timeshare every year, can they get the developer to really help them "resell" their timeshare interest? Herein lays the problem.
Most developers will tell you that reselling a timeshare interest is NOT something that they do. You own it and want to sell it, good luck; you're on your own.
Even if they could sell it for you, the commission is up to 40% of the DISCOUNTED resale price. So how is this "resale" market being served? The vast majority of VOI owners will tell you about being approached to sell through a company for an upfront fee more than once for exaggerated values.
Since a used timeshare isn't an asset which has a "Fair market value" per se, it is often the case that the sales pitch to "list" with the "resale" company is based upon the same "Fear and Greed" hot buttons pushed originally in order to get the owner to buy.
"If you don't pay me, you'll never get rid of it" is the Fear part and the Greed isn't to hard to figure out. If someone paid $10,000 for a VOI in a popular location years ago and a slick sales agent tells them “that the "Property" is now worth $20,000 and I'll get you your money lickety split as I have a buyer on the line for it all you have to do is pay me $1,995 today to do the deal”, so, there you have it.
They throw in a bunch of urgency, i.e. "we're having huge new owner symposium here at the Orlando Convention Center this weekend so if you want is sold, go get your credit card and we'll get you out from underneath the burden and at a great price", etc.
So, is it any surprise that the Florida AG Attorney General Bill McCollum this week has taken action against Equity Marketing Corp., d/b/a/ , Resort Equity Marketing "REM" for allegedly bilking consumers?
"Altamonte timeshare business fined $100,000 - Tuesday, December 18, 2007 - 2:56 PM EST Altamonte timeshare business fined $100,000 Orlando Business Journal" stated "More than 100 customers filed complaints that the Altamonte Springs-based company, which operates under the name Resort Equity Marketing, used misleading telemarketing pitches to obtain clients for its timeshare resale advertising business".
"Timeshare resale businesses are often mistaken for real estate brokers when they are simply providing an advertisement service to promote the sale of a consumer's timeshare. Unfortunately, many consumers misunderstand and do not receive the services they believed they have paid for," says Attorney General Bill McCollum, in a prepared release.
As part of the settlement agreement, the company will refund $50,000 to customers and will reimburse the attorney general's office $45,000 for the cost of the investigation. In addition, Resort Equity Marketing must modify its solicitation and marketing techniques to comply with the Florida Deceptive and Unfair Trade Practices Act and the Florida Telemarketing Act. The company must also honor timely cancellation requests and provide better customer service.
The website "Ripoff Report" has complaints lodged there to warn sellers of the ploy of offering two free "air tickets" to consumers to get the timeshare "listing" by this company going back to 2005. The Virginia resident states that the air travel vouchers aren't any good because they require one to stay in a particular hotel for 7-14 days (at excessively high rates by the way).
In the Orlando Sentinel article the companies purportedly said in their Telemarketing sales pitch that if the timeshare wasn't sold within 6 months that the customer would receive "two free airline tickets".
The article further stated that sales agents were misleading unwary consumers by telling them that they were affiliated with the Orlando's Orange County Convention Center's "Orange County Convention and Visitors Bureau. Oh yeah, but the company owner claimed that in the past they had outside marketers responsible for such activities and no longer does so but they're going to pay the fine and do so without admitting any guilt.
These types of ploys have been used to swindle the naive VOI owner for many years.
In recent time, on 12/19/07, the London PRNewswire reported a huge scam run offshore not dissimilar to the old "APPRAISAL SCAM" of the SWISS AMERICAN-RCI APPRAISALS scam led by the the Gonzy's as reported by TimeSharing Today in July/August 1999 edition still available online at TimesharingToday.com for a fee or free at another resale firms site.
In the most recent scam, "The sun sets on timeshare crooks" article describes a United Kingdom company, "T-One (UK), Limited" and two of it's affiliates making unsolicited calls to timeshare owners and professing to have a buyer lined up. The old, pay to sell angle. After receiving a written confirmation of the "listing" on the companies website, the VOI owners were called and then sent a letter that a sale was pending. It was a 90 day window and an "Administrative" fee that got the greed and urgency buttons pushed. The firm raised $2,000,000 Pounds by offering to "refund" the fee's within 12 months if a sale was not completed at the original offering price. One I assume was excessive.
So what does this all add up to for the small mom and pop seller who has no idea how to go about selling their unwanted VOI? Caveat Emptor, buyers beware!
There is a greater chance of losing your money by paying to "list" a VOI for sale on a website than putting it on Red or Black in Las Vegas.
If one is unfamiliar with the risks associated with the resale market, the Florida AG website has for sometime clearly outlined the risks associated with "Resale" companies and slick sales techniques of these firms. The fast talking slick pitch almost always has a high degree of pressure. See myfloridalegal.com "Consumer Alert- How to Protect Yourself Timeshare Sales & Resales".
So here's my two cents worth. Not every timeshare is worth selling. It might be the case that it's an old resort and the deed is only worth donating. There has been a number of firms pop up to assist in this area in recent years. The tax deduction might net you more than what you'd get on an auction. It's a personal call but most people like to "give away" something they once loved to a favorite charity.
If one wants to sell, then you have to look at the big picture and what it will cost to sell. Not what someone is trying to get you to pay to "list". Developers customarily incur 30-50% marketing expense to sell you a timeshare. Why should the "resale" marketing expense be any different?
Well it isn't in most cases. Points that were sold by large companies for say .10 .15 cents to own with the largest company may resell on EBay.com for .01 cent. That means a $15,000 timeshare interest resells in the real world for $1,000-$1,200 plus the $500 or so closing and resort transfer fees, etc.
So what do you do? Seek out competent counsel. Look at the claims of the company. If they boast of a quarter of a billion dollars in offers and do not disclose the dollar amount actually sold, are unlicensed and charge a large fee to put you on their site at unrealistic resale valuations, one might want to ask themselves why is that?
Talk to your friends and family, they are often the best prospects for your resale.
Otherwise, talk to another owner or prospective owner about your “good deal”. Price it appropriately and pray for a bona fide offer.
I know of no other way than connecting with a prospective buyer who has an interest in ownership. Our firm does market specific direct advertising to find a buyer for a particular resort or resort area. If we know someone loves Orlando, we call them about Orlando. If someone loves Hawaii, we talk to them about their Island preference.
We know VOI owners and vacationers who have attended presentations at Timeshare Resorts and have not purchased due to the pricing and high pressure pitch have the greatest likelihood of making a purchase in the "secondary market".
Deal with a broker or licensed individual when it comes time to sell for piece of mind but that doesn’t alleviate the advertising requirement if you want results.
One might have a problem conceptually with the idea that there is a broker’s commission on top a marketing expenses when it comes to selling but, the big boys have paid licensed agents to sell their product for years. Why should a VOI resale be any different.
One on the largest timeshare markets in the world is Orlando, Florida. The licensed Brokers and Agents here in Florida have the Department of Business and Professional Regulation, "DBPR" as well as the Florida Real Estate Commission, "FREC" to police them.
In Florida, State Statutes were enacted years ago to protect the consumer after numerous complaints. Specifically, Chapter 721 of the Statutes are dedicated to "Florida Vacation Plan and Timesharing Act". A copy is available to anyone who’d like one and it's free if you call the Florida Dept. of Agriculture and Consumer Services at 850-488-1122.
In their wisdom, under section 721.065 "Resale purchase agreements" the State declared that "an owner who acquires a timeshare interest.....and later offers it for resale, ...must utilize a resale purchase agreement".
To quote an abbreviation, the spirit of the law requires full and fair disclosure of the "Maintenance and Taxes" associated with the interest as well as the "10 day right of rescission" salient details most advertising companies are unaware of or neglect to inform consumers of.
Helpmesellmytimeshare.com was formed to assist motivated sellers in marketing their timeshare and VOI because of the excessive abuses in this area and we will review your ownership interest to help evaluate the possibility of reselling that VOI.
We do not put a VOI on our website and claim it will be sold at some unrealistic price. Our principals have 20 years experience in the timeshare industry and have sold investments in various private and public ventures since 1979 and as a result understand the special needs of a party selling VOI in the secondary market.
Our goal is to see this industry establish a fair market value for the "secondary" market VOI and place an emphasis upon legislation which will help clean up the business. Used cars or previously owned automobiles were once sold with little or no oversight and today even a used car salesman is regulated by licensing requirements. These changes need to be made sooner rather than later or more honest folks will be harmed and our Industry will once again start to take on the unscrupulous aura it once had and has worked so very hard to shed over the last few decades.
On the bright side, it looks like the Retail side of the business as well as Resales will continue to flourish even in tough economic times according to the top exec of the largest firm in the Industry as quoted recently. "In a recent meeting with Goldman Sachs analysts, Wyndham Worldwide Corp. CEO Steve Holmes said he thinks time-share sales can hold up despite a sputtering economy.
"On time share, Mr. Holmes reminded us, 'it is sold, not sought.' Local management can more aggressively market product during slowdowns by adjusting tour flow and incentives," Goldman Sachs analyst Steven Kent wrote in a recap of his meeting with Holmes. (Wyndham's time-share arm, Wyndham Vacation Ownership, is based in Orlando.)"
Today’s timeshare industry was recently compared to the used car business of the 1960's quite astutely. However, for years serious efforts have been made to clean up the business and establish guidelines for a secondary market by the major Industry player American Resort Development Association, "ARDA" and it's proponents and Industry leaders like the Massachusetts resale broker, Mr. Cliff Hagberg who is the former Chairman of the ARDA Resale Task Force and has testified as an "expert witness" in other timeshare scams.
These efforts will eventually lead to licensing and bonding requirements for resale advertisers, in my opinion. Not unlike the sub-prime debacle leading to very stringent "mortgage broker" licensing requirements in recent times.
Let's just hope we don't have to wait until the problem becomes so large where millions of additional dollars in consumers funds are lost to a new breed of telephone huckster that our legislature takes action.
For those legitimate resale operators out there that are attempting to wing it without legislation on the books, my hats off to you for your efforts. To the consumer attempting to navigate the shark infested waters of the timeshare secondary market place, one must make sure and ask a lot of questions and do their homework thoroughly before you part with any funds to retain a firm to do their bidding for them.
For a valuation compassion sellers should try Redweek.com, Tug2.net, or www.holidaygroup.com to see what motivated owners are actually pricing their inventory at. Holiday Group has been around since 1992 and has 1849 properties for sale a lot of which are on Ebay has a dedicated staff of licensed representatives. They are currently running a special year end sale with another 35% off list price to help move inventory before the Maintenance bills come out.
Remember, a licensed Real Estate Agent or Broker is always your best bet as they have a duty to the seller and buyer to play fair and by the rules or they could lose their meal ticket. Additionally, they receive a commission at the point of sale through a licensed and bonded Escrow handled by a reputable Title Agency like JRA Services a resale specialist, (www.timeshareresaleclosings.com), so their motivation is to bring the owner bona fide offers until the VOI is sold.
This is a big reason a licensed representative is your best bet when attempting a resale on your own but continue to do your homework and Google the firm because there is always the wolf in sheep’s clothing to be wary of.
Remember, Caveat Emptor!
I encourage you to post your personal experiences and comments.
Flames not withstanding.
Merry Christmas and Happy New Year!
D.A. Garcia
CEO
helpmesellmytimeshare.com
Subscribe to:
Posts (Atom)
