May Newsletter Q&A: Second Market Timeshare Owners 'Caught' By RCI

jeffreyp wrote:

I bought directly from Wyndham in Myrtle Beach and was told that secondary buyers do not get the same priority with regard to getting units on the oceanfront. They claim it depends on points and your original deed. I have never received proof if this is true.

steve1184 wrote:

jeffreyp wrote:

I bought directly from Wyndham in Myrtle Beach and was told that secondary buyers do not get the same priority with regard to getting units on the oceanfront. They claim it depends on points and your original deed. I have never received proof if this is true.

By doing that they are cheating you out of what they sold you. They should bite their tongues and treat all owners exactly the same. How many times did they expect to be able to sell that thing? Only once.

You might notice that when you join Interval or RCI or list a new ownership, the question is asked: Did you buy from the Developer or on the Secondary Market? Why do you think that is? It's because the exchange companies have a valuable relationship with the resort Developers and need to protect that relationship. If you don't get the same "exchange power" with a resale as the original owner did, hmmm . . . I wonder why?

Not quite true. When you buy from any developer, you are buying a particular week in a particular unit at a specific location. As a first-visit incentive the developer can make your week "float", can allow you to check-in any day of the week, make you part of an internal exchange system, can offer you access to a private travel agency, can convert your week to points that can be used for hotel stays, airfares or to buy a cup of coffee. None of those transfer with a resale. The resale reverts to a fixed week in a fixed size unit at a specific resort and may have limitations on trading power.

Luigik, that's the kind of thing crooks do.

Timeshare sales is *full* of crooks. That's why they have such a bad reputation. They *are* crooks.

If they sold you something, *anything* floating weeks, etc. and they take it away from you if you decide you don't want it, how much is it really worth?

Anything you buy is a valuable asset. If it is being depleted by the seller if you want to sell it why would you want to put your money out for that?

You should think of that if they want to sell you something that "doesn't transfer", and adjust the price you are willing to pay downward.

I have had this very discussion with timeshare salespeople. "If it's not resalable if I want to sell it I can't pay you anything at all for it" Or not much.

I guess some people fall for scams, but I wouldn't pay very much for something that has a depleted resale value. If they are asking $20,000, I'd offer $400 if it can't be resold. Everyone else should apply that sort of ratio as well.

luigik wrote:

You might notice that when you join Interval or RCI or list a new ownership, the question is asked: Did you buy from the Developer or on the Secondary Market? Why do you think that is? It's because the exchange companies have a valuable relationship with the resort Developers and need to protect that relationship. If you don't get the same "exchange power" with a resale as the original owner did, hmmm . . . I wonder why?

It's because they are trying to cheat the original owner out of his resale value so they don't have the competition.

You should consider that when you buy from them and realize they will eventually try to deplete your resale value. Take that into account when you buy so you don't get hurt.

Realize the only reason they would do this is to cheat you and act accordingly when you buy.

wow! that's a bit extreme, no? Come on "crooks" is a bit rough even though there are some shady people in the business . . . .

First-visit incentives are just that . . . and they only apply to the original purchaser. The basic program is good but the incentives make it better. Just like a warranty, it applies to the buyer from the dealer not to every second-hand user thereafter . . . . You buy a used car do you expect full warranty?

luigik wrote:

You might notice that when you join Interval or RCI or list a new ownership, the question is asked: Did you buy from the Developer or on the Secondary Market? Why do you think that is? It's because the exchange companies have a valuable relationship with the resort Developers and need to protect that relationship. If you don't get the same "exchange power" with a resale as the original owner did, hmmm . . . I wonder why?

I belonged to both RCI and II at one time and neither entity asked where I bought my timeshares (10).

When you complete the application form to join an exchange organization the question is asked: purchased from a resort or other If a resort prepared the application for you then you might have missed seeing the question

luigik wrote:

wow! that's a bit extreme, no? Come on "crooks" is a bit rough even though there are some shady people in the business . . . .

First-visit incentives are just that . . . and they only apply to the original purchaser. The basic program is good but the incentives make it better. Just like a warranty, it applies to the buyer from the dealer not to every second-hand user thereafter . . . . You buy a used car do you expect full warranty?

You buy a valuable asset you have an expectation that you do what you are supposed to do (pay your bill) everyone else will do the same.

What do you expect, after you sell your unit to someone else they should stop cleaning it?

They got paid, after all. If you sell your property to someone else and they do what they are supposed to do (pay their bill) you should be able to rely on them getting what they paid for.

This is the same kind of thing some companies try to do today, where they give new buyers a huge discount that their longtime customers don't get. Directv is one that tried that. I was paying them for >10 years and they *tried* to charge me extra, more than double what they would charge a new customer.

I refuse to do anything like that, if a company sells to anyone for less than they sell to me I won't deal with them at all. I will pay extra to avoid it. It's not right.

Nope, if a timeshare's maintenance is paid they should be treating everyone the same.

Not doing that is *exactly* what crooks do.

Loretta:

For some reason, my response was not posting. I am in the middle of clarifying the restrictions that the major timeshrae companies are placing on secondary market timeshares.

Unfortunately, these rules seem to change frequently. Stay tuned, I hope to have something for the December or January newsletter.

Also, sorry about my response not showing up until now. I am checking with RedWeek.com to find out what happened.

Steve: You make some good points, but timeshare has NEVER been an investment. It will take a majority of owners to educate themselves and read all the documents until something can be done about the developer or the exchange company having all the power.

The sad truth is that most owners do not know about the power that they DON'T have until it is too late.

Education and getting the word out are key.

I agree that treating owners who purchased on the secondary market differently, i.e. worse is not good for anyone.

So far, it is the ONLY way that developers can show some sort of "value proposition" for timeshares purchased directly from them.

Another example of why it is so important for unbiased timeshare education and for consumers to know the answers before they purchase anything from anyone.

tsauthor wrote:

Steve: You make some good points, but timeshare has NEVER been an investment. It will take a majority of owners to educate themselves and read all the documents until something can be done about the developer or the exchange company having all the power.

The sad truth is that most owners do not know about the power that they DON'T have until it is too late.

Education and getting the word out are key.

If you resold and for your maintenance you got no maintenance, for example, what would that be worth? Nothing.

But some people think it makes sense to try to take other people's value away by policies that should rightfully be illegal. Crooks. There ought to be a law.

Perhaps the problem *is* the developer. Maybe there should be laws stating that timeshares can't be *air*. If you are selling timeshare in California it has to have real property attached to it or it cannot be sold. Maybe that's part of the solution?

I have been to timeshare presentations. I listen, take my spiff, and I ask them to show me why this makes sense for me to buy. They haven't been able to do that yet.

Almost invariably you can rent the same unit for the cost of the annual maintenance while buying nothing. It just makes no sense.

If I sound familiar, Lisa, it's because I have said essentially the same thing on your blog.

tsauthor wrote:

I agree that treating owners who purchased on the secondary market differently, i.e. worse is not good for anyone.

So far, it is the ONLY way that developers can show some sort of "value proposition" for timeshares purchased directly from them.

Desperate people sell their timeshares on the secondary market for 90% less than they paid the developer every day.

The developers should try hard to prevent that by keeping those ownerships valuable. That is essential to the developer's own sales efforts, isn't it? How would you like to be selling something for $25,000 that you can buy secondhand for $3,000? Heck, Lisa, you *have* sold that. Not too successfully, I think you said.

It's in everyone's best interest keeping things valuable. If you make them worthless later on who will buy them from you?

It seems that most of you are missing the whole point of timesharing. Even though some timeshares have a "deed" the concept is "use". If you rent a hotel room at Marriott or Westin (FOR EXAMPLE) you'll pay around $300 a night for something nice. Remember rents go as high as $3000 a night. But even at $300/night = $2100 per week and every year inflation pushes those room rates upwards. However, if you "invest" into something you're going to do anyway (vacation) then for the maintenance fee (say $1200) you get a condo instead of a room plus all the resort facilities. Do the math over 30 years. If you don't save then you're investing in the wrong level of accommodation. It's an investment into vacation quality and upgrades not into money-making.

luigik wrote:

It seems that most of you are missing the whole point of timesharing. Even though some timeshares have a "deed" the concept is "use". If you rent a hotel room at Marriott or Westin (FOR EXAMPLE) you'll pay around $300 a night for something nice. Remember rents go as high as $3000 a night. But even at $300/night = $2100 per week and every year inflation pushes those room rates upwards. However, if you "invest" into something you're going to do anyway (vacation) then for the maintenance fee (say $1200) you get a condo instead of a room plus all the resort facilities. Do the math over 30 years. If you don't save then you're investing in the wrong level of accommodation. It's an investment into vacation quality and upgrades not into money-making.

Which is exactly the way those ownerships are being sold. I have never paid $3000 for a night anywhere, and that's for the king of Saudi Arabia, not us real world folks.

But the idea is you are getting those extras. A nice condo. Resort facilities. The ability to trade it or sell it to someone else if you don't want it this year, or ever again. Maybe over that 30 years you got too old or sick to travel.

The thread is about those timeshare sellers and their accomplices taking away things you were buying. Things you paid for, maybe for 10, 20 years. And trying to withhold some of those amenities from someone you might sell your interest to.

Trying deliberately to dilute your value.

That's what crooks do. As long as they get their maintenance money I want them to shut up and do what we expect them to do.

This is what's wrong with the timeshare industry. Blue suede shoe operators and just plain crooks trying to cheat people. It goes on every day.

o.k. It's obvious you have the word "crook" fixed somewhere and that nothing will help you see the real world. If you can't do the math and if you can't see value, you shouldn't buy. Nobody is forced to buy or invest and it only takes a few moments to calculate the cost of vacationing at the level you'd like to and if the numbers don't make sense, there's only one thing to say. "No!" And sure, very few people stay in $3000 a night rooms but with the right timeshare, you can.

WOW. This discussion has gotten heated!

First of all, I do not believe that timeshare resorts or timeshare salespersons are crooks, except in rare cases, having nothing to do with sales.

Secondly, as I've said before, timeshare is not for everyone.

Thirdly, while it is true that many years ago, it was feasible for the average person to save money on vacations by puchasing a timeshare from the developer, it is not so much the case any longer. However, it is not all about saving money now, is it? You can always find cheaper alternatives to just about anything.

Four, I think that education is vital to making a sound purchase when it comes to timeshare. There are a lot of alternatives and choices out there, and most consumers, with little or no timeshare experience are confused.

Lastly, it holds true for so called "new" timeshares as well as so called "used" timeshares...if you don't see the value, can't afford it, or won't use it, then don't buy it.

For those of you who do see the value, can afford it and will use it however, timeshares still remain one of the best ways to travel. Buying on the secondary market offers the best of all world in my opinion.

tsauthor wrote:

WOW. This discussion has gotten heated!

For those of you who do see the value, can afford it and will use it however, timeshares still remain one of the best ways to travel. Buying on the secondary market offers the best of all world in my opinion.

But what happens if you can't get your week, or you can't get oceanfront even though that may be what you bought, because your "priority" is not what the sellers was? The OP mentioned something like that.

Remember a year or so ago when RCI when got caught renting the heck out of those weeks and people couldn't get what they paid for, their own week they supposedly owned? They got caught.

Renting them was *much* more profitable for RCI than giving a longtime owner what they had paid for. I imagine the discussion went something like "why should we give that to someone for their $75 or $150 trade fee when we can rent it to someone off the street for $400."

They had a conflict of interest. That kind of stuff pervades the timeshare industry. You can pretend it's not there but it is. You trade your week off and that week is more likely to be rented, and you just try to get a week that you want for trade. That can be very difficult. Offer them $2000 and see what is available!