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

luigik wrote:

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.

Timeshare sales is successful because people like to *own* things. That's how they sell timeshares, pride of ownership. They make you want to buy it.

Whereas I say show me why I'd rather own than just rent it for a week, I still get it but there are differences.

I don't have to buy anything, so I save that money, and if I show up to rent and they don't want to give me the oceanfront unit, for example, I can just say NO. And I would have no problem with that, by not buying I remain an important customer.

Unless they satisfy me they can't make money.

After you buy, you are no longer important.

Remember how it is trying to get the week you want? Some resorts are likely worse than others but I have known people who were calling in every week for months trying to get what they supposedly own.

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.

If those developers want to be seen as reliable and honest they should cut out the flimflam, treat everyone the same and stop trying to take away what they sold you. What you bought.

It'll never happen.

steve1184 wrote:

Remember how it is trying to get the week you want? Some resorts are likely worse than others but I have known people who were calling in every week for months trying to get what they supposedly own.

That's why I'd never consider buying a floating week with a floating unit .... when you buy a deeded week, you own that week and that unit .... no one can take it away from you.

jayjay wrote:

steve1184 wrote:

Remember how it is trying to get the week you want? Some resorts are likely worse than others but I have known people who were calling in every week for months trying to get what they supposedly own.

That's why I'd never consider buying a floating week with a floating unit .... when you buy a deeded week, you own that week and that unit .... no one can take it away from you.

You are not dealing with a normal item and you are at the mercy of people who are not trustworthy.

steve1184

jayjay wrote:

steve1184 wrote:

Remember how it is trying to get the week you want? Some resorts are likely worse than others but I have known people who were calling in every week for months trying to get what they supposedly own.

That's why I'd never consider buying a floating week with a floating unit .... when you buy a deeded week, you own that week and that unit .... no one can take it away from you.

Quote:

Sure they can, they can just charge you a $4000 assessment.

You are not dealing with a normal item and you are at the mercy of people who are not trustworthy.

What does a $4000 assessment have to do with this topic? If you have to pay a special assessment then a deeded timeshare is still yours to do with as you wish as long as it's in your name (you can use it, sell it, rent it, let a friend or relative use it etc).

jayjay

steve1184 wrote:

jayjay wrote:

steve1184 wrote:

Remember how it is trying to get the week you want? Some resorts are likely worse than others but I have known people who were calling in every week for months trying to get what they supposedly own.

That's why I'd never consider buying a floating week with a floating unit .... when you buy a deeded week, you own that week and that unit .... no one can take it away from you.

Quote:

Sure they can, they can just charge you a $4000 assessment.

You are not dealing with a normal item and you are at the mercy of people who are not trustworthy.

What does a $4000 assessment have to do with this topic? If you have to pay a special assessment then a deeded timeshare is still yours to do with as you wish as long as it's in your name (you can use it, sell it, rent it, let a friend or relative use it etc).

Why would you pay a $4000 assessment for example, if you could more than likely rent the same unit for much less and pay only rent? No more maintenance. No more payments.

That's the problem with the whole timeshare idea. You have people that you are forced to be in bed with who don't have your best interests in mind. They have their own.

Giant conflicts of interest.

Remember that developer dominated project, it might have been in the Caribbean? The developer took it all away from the owners somehow. There was an owner group started, it was all written up on that owners group newsletter that I can't remember the name of. Quite a scandal.

Look, be realistic. Lets say you have 150 units divided into 50 weeks each, each week has a separate owner. Up to 7500 owners.

Then, there is the developer on the other side of the equation with all the unsold weeks, which he owns, votes, etc. He may not have to pay the same assessments you do, because no one is watching that closely. Your interest is greatly diluted by how many of you there are. His is magnified by there is only him and he owns the rest, including all those that he got back free for non payment of assessments.

True, there are some timeshare projects that have active owner management and those have at least the potential of lacking the inherent conflict of interest. But there are few of those because being the developer is obviously where the money is.

steve1184 wrote:

Everything, I think. It was stated that if you have a deeded timeshare that is somehow yours. It's really not, you really don't control it and they can essentially take it away from you by overcharging you.

Why would you pay a $4000 assessment for example, if you could more than likely rent the same unit for much less and pay only rent? No more maintenance. No more payments.

That's the problem with the whole timeshare idea. You have people that you are forced to be in bed with who don't have your best interests in mind. They have their own.

The main problem is that people do not take the time to research and study what timesharing is all about and what ownership entails .... they merely go by what some salesperson tells them.

Along with timeshare ownership are ever increasing yearly maintenance fees and possible special assessments ...... many people don't have a clue what they're getting into because they don't research what timeshare is all about.

jayjay wrote:

steve1184 wrote:

Everything, I think. It was stated that if you have a deeded timeshare that is somehow yours. It's really not, you really don't control it and they can essentially take it away from you by overcharging you.

Why would you pay a $4000 assessment for example, if you could more than likely rent the same unit for much less and pay only rent? No more maintenance. No more payments.

That's the problem with the whole timeshare idea. You have people that you are forced to be in bed with who don't have your best interests in mind. They have their own.

The main problem is that people do not take the time to research and study what timesharing is all about and what ownership entails .... they merely go by what some salesperson tells them.

Along with timeshare ownership are ever increasing yearly maintenance fees and possible special assessments ...... many people don't have a clue what they're getting into because they don't research what timeshare is all about.

Is it really such a grand accommodation that you just can't get it without buying? I just don't think that is the case at all.

You *can* rent it and not buy anything.

The place is the same. You just save most of your money and nearly all of the risk.

steve1184 wrote:

jayjay wrote:

steve1184 wrote:

Everything, I think. It was stated that if you have a deeded timeshare that is somehow yours. It's really not, you really don't control it and they can essentially take it away from you by overcharging you.

Why would you pay a $4000 assessment for example, if you could more than likely rent the same unit for much less and pay only rent? No more maintenance. No more payments.

That's the problem with the whole timeshare idea. You have people that you are forced to be in bed with who don't have your best interests in mind. They have their own.

The main problem is that people do not take the time to research and study what timesharing is all about and what ownership entails .... they merely go by what some salesperson tells them.

Along with timeshare ownership are ever increasing yearly maintenance fees and possible special assessments ...... many people don't have a clue what they're getting into because they don't research what timeshare is all about.

So, having said that why would you want to pay money for ownership in something like a timeshare, with ever increasing yearly maintenance fees and possible special assessments?

Is it really such a grand accommodation that you just can't get it without buying? I just don't think that is the case at all.

You *can* rent it and not buy anything.

The place is the same. You just save most of your money and nearly all of the risk.

I no longer own timeshares .... I sold all before the market imploded, however all my timeshares but one were bought on the resale market.

I did buy one recently that I knew the value of (location, location, location .... riverfront at the resort) and sold it making a $800 profit, however my timeshare buying days are over .... I would rent now.

What "they" sold you was a fixed week in a fixed unit at a specific resort. As a reward for acting "today" the Developer offered incentives. those incentives don't transfer as the secondary buyer did not "act" as did the primary buyer. If a car dealer offers free service for a year to a buyer who dilly dallies and then 11 months later the buyer sells the car, should the Dealer have to honor the free service to the secondary buyer? While it might be nice to think so, it's not the case.

And that IS what everybody buys unless the Developer allows your week to float and use points for short stays etc. The fixed week, fixed unit, fixed resort is what transfers on resale.

And I haven't been to a timeshare presentation in 20 years where what they were selling was a fixed week. I doubt those are actually sold anymore by anyone. Who would buy one?

I am not gonna plan on vacationing at this location for the rest of my life in week 26 no matter what. Sounds inconvenient.

But I could surely be wrong since I am no expert.

steve1184 wrote:

And I haven't been to a timeshare presentation in 20 years where what they were selling was a fixed week. I doubt those are actually sold anymore by anyone. Who would buy one?

I am not gonna plan on vacationing at this location for the rest of my life in week 26 no matter what. Sounds inconvenient.

But I could surely be wrong since I am no expert.

A fixed week can be traded (via an exchange company) to other resorts and locations. I owned only one floating week and I made my reservations a year in advance .... all the others were fixed weeks and fixed units.

owners of the manhattan club, nyc are in desperate need of relief from the (nearly fraudulent) raises in annual fees per week of ownership. in addition, management apparently has oversold in this timeshare making it extremely difficult to make reservations. however "dumping" this timeshare for pennies on the $ spent isn't the answer. seeking legislative relief from some of the mc's (i believe, illegal) practices would be a better option. a class action lawsuit is in the works, and contacting the nys attorney general might offer some assistance in these issues as well. keep me posted on updates to this response, and perhaps offer hints on other remedies to these manhattan club problems.

Your timeshare was worthless one minute after you signed the papers.

Not sure I would agree with the statement that it's worthless. Timeshare has value if you plan on using it. The problem is that there is no solid, reliable valuation for a so-called "used" timeshare. Why hasn't anyone started a "Kelly Blue Book" system?

I just returned from the TATOC Conference in the UK and I found it refreshing to hear from industry big-wigs who agree that something needs to be done.

The issue of course, continues to be who is going to do what?

You know how the Kelly Blue Book works, right? They have researchers who attend auctions, gather sales data from dealerships as to vehicles sold, etc. They then compile that data to determine the current value of each vehicle. It's based on actual sales.

In timeshare, there is no one who wants that data compiled or processed. They hate the idea!

None of the timeshare developers want the secondary market to exist. They want to sell you the timeshare and then they want you to pay your maintenance forever so they can make hay while the sun shines because almost invariably they own most of the weeks. So by you paying you insure the value of their holdings.

If you sold yours to a third party that could prevent them from selling that party one of theirs. They don't want that!

This is why there is not much valid secondary market for timeshare interests. The big dogs don't really want there to be one. They really only want their holdings to have value, not *yours*.

Timeshare owners are just cash cows to those big dogs, they have thousands of timeshare owners to deal with. When you have plenty of something they are worthless, so you as an owner are worthless to them. They already got your money and you are under contract to keep paying them.

Witness in many cases they took a $78,000 condo, split it up into 50 shares and sold them for $5,000 each. So that $78,000 condo has now been sold for $250,000. No wonder it's such a high pressure sale!

So your interest is greatly diluted by the fact you have very few shares and there are a lot of others similarly situated. Also, it's entirely possible (like at Poipu Pointe) that the developer may own 30 of that 50 shares, so when the time comes to vote you he votes his 30 and *all* the other owners only have 20 all together. So it's no surprise he can vote that you should pay to protect his interest, he owns more than all you together! He wants you to pay $25 million so he won't have to.

This is why they like that you are under contract and you can't just "walk", or they will put you in collections, sue you, etc. Whatever. Bad things.

Whereas if the law was changed so you could just "walk" they would have to treat you like a valuable customer without which they would have nothing. As it is timeshare owners who have already bought are essentially worthless. That should be changed so timeshare owners are more valuable to the timeshare property. Only by changes of the laws can this happen.

This is the trouble with the timeshare proposition. It's not a healthy type of market. I wish it could become more healthy but only by acknowledgement of ownership rights and a reduction of the influence of the developer can this occur.

Naturally the developers hate the idea.

You obviously have not thought very deeply about the subject. Of course time share is profitable and because of that a lot of carpetbaggers have become involved. The decent companies, mainly the hotel chains and Villa group don't just offer a split up condo share they provide valuable services that staying in a hotel with the same service would cost a lot more over time than the investment for the time share. I suggest you do a little research on REAL timeshare/vacation ownership and buy only from legitimate, reputable companies.

Luigik, I guess I don't understand what you mean. The post was about how timeshares have struggled with secondary market value. My post said that was obviously intentional on the part of the timeshare industry, how they would much prefer you buy a *new* timeshare from them than a *used* one.

You disagree about that? The timeshare sellers you cite will buy your timeshare back for full market value will they? For more than you paid them for it originally?

If you have an opinion please state it and support it. If you can.

I have been a member of Interval for a few years now and was never asked if I bought a resale or from the developer. I have had no problem trading to Hawaii with my Vistana property. I have 3 resales, all Sheraton and I do not get star options or points and I cannot trade within Sheraton Vacation Network but I just use Interval to trade and it works fine.. I have requested a particular building and floor at Sheraton Broadway Plantation and my request has been met the 3 times I have been there....