Postcard companies: How the transfer takes place between original owner and new buyer

[rickandcindy23]

I would appreciate it if those who tend to criticize my "rants" about postcard companies would take it easy on me this time. Please?

We currently have a week that has been stopped at Timeshare Transfer for 8 weeks, due to ROFR that PAHIO claims to have but really doesn't. They have a clause in their contracts that says the owner must contact them before selling. They do have ROFR written into their contracts starting July of 2005, but not on any contracts written before. Anyway, when the owner contacts PAHIO, they will offer an amount for the week. Then if you get more than that from your buyer, they will let the sale go through. Keep in mind, this is not really ROFR. All you have to do as the seller is write a letter saying you want to sell it to whomever, and they let it go because legally they cannot stop the sale.

So I questioned a few knowledgeable people about the process that a Postcard Company must follow to get money from both ends. This is going to make some of you mad, but it is going be redundant information for most, so some are going to think, "no duh." But humor me anyway and don't get abrasive about it.

Example of a PAHIO sale:

1. Postcard Company gets $3,495 for a week from someone wanting out. The postcard company gets power of attorney to turn ownership over from seller to new buyer. Keep in mind that this week is still in the original owners' names (PAHIO would have paid this person something for their week)

2. Ad is listed on ebay.

3. Bidder pays for week, including closing costs and transfer fees.

4. Buyer pays, sending closing company full payment via cashier's check.

5. Estoppel is sent from Timeshare Transfer to resort. The deal is stopped at this point.

6. Postcard Company is notified that PAHIO will buy back the week.

7. Postcard company, since they have power of attorney, takes the cash.

End result:

Owner does not get the money. PAHIO is not protecting the owners at all.

Postcard company gets double-paid.

Developer gets to resell a week they already sold once before.

If there is no ROFR exercised, there are two closings that take place simultaneously. The timeshare is transferred from the original owners that paid $3,495 to the individual seller or the postcard company (one of ours had Thomas Ochoa on the deed and another had the postcard company, Vacation Solutions). Then the deed is turned over to the new owner, with the seller on the deed now listed as the postcard company or employee of the postcard company.

There is half of a closing that does happen with the ROFR. The postcard company gets a closing from the owners to their own names. How did that happen without it being stopped. The power of attorney is the key to that. The postcard company must have power of attorney, because if they don't have it, the owners could change their minds, when they find out how much itheir weeks actually sold for. Keeping the owners in the dark about the value is important.

I have great disdain toward the postcard companies. They make their money no matter what, but the original owners pay. How could an owner not benefit anything when ROFR is in place? It is a terrible system that allows this. I have to give credit to the geniuses who figured out how to make money on others' misfortune, but I would not want to face the consequences of their wickedness. I believe that the truth will out. There has to be an end to the postcard companies.

If anyone has any other details to add, I would love to better understand this system.

Thanks!

 

[rickandcindy23]

What can we do to stop postcard companies?

If you own at a resort that has a good HOA, you can help stop the postcard companies. You can write a letter or call a board member and ask for a paragraph to be inserted into every newsletter from the resort.

We are doing this at Twin Rivers. A letter has already been drafted and approved by the other board members, explaining to owners that they may deed back their weeks by paying one year of maintenance fees in advance. I have already contacted our other Colorado resort's board of directors and asked them to do the same. I have another resort to contact as well.

If we all act, we can stop these guys, but we must all work together and do it quickly.

 

[Quimby4]

You sure have a great understanding of this!!

My thought is that the original seller was having to pay $3,495 to the "Postcard Company" anyways so they don't really have a say if the resort buys it back or if it is sold on EBAY. Where ever there is money to be made, someone will capitalize on it.

Honestly, if I could find someone to pay me $3,495 to take over their timeshare I would too...then sell on EBAY or wherever.

There will always be people who don't understand timeshares, how to trade and their resale value.

Thanks for your well though out post Cindy!!

 

[bruwery]

Whether good or bad, postcard companies fill a niche. Do they take advantage of people who don't know any better?

Yes.

Is this a bad thing?

Yes, I suppose it is. Unfortunately, that's the way the world works. The strong manipulate the weak, in every aspect of life.

The definition of a great transaction is one where each side feels they bested the other. In this case, the postcard company received some cash and a timeshare they'll attempt to sell. On the other side of the table, an unhappy owner rid himself of a perceived albatross. Both parties walk away whispering "good luck, sucker" under their breath. That isn't a crime.

Could the hapless owner have done better for himself? Almost without exception, the answer is yes. However, in most cases, this hapless owner has chosen not to educate himself. You can't force people to learn.

Not everybody pays the same price for airfare, or for the same car off a dealer's lot, or even for a stereo down at the local electronics giant. Some pay less than others, whether through savvy negotiating, blind luck, or good timing. Were the buyers on the high end of the sprectrum cheated? Is our entire economic system unfair, or morally reprehensible?

I admire your resolve, and I'm certainly not trying to bash you - nor am I trying to encourage you to warmly embrace your local postcard huckster. (I'd pay to see it, though...) I'm no postcard posterboy, I myself discourage people from using them, and I can't think of an instance where I would refer somebody to one.

If you were to start a national referendum to ban them, I wouldn't stand in your way. Unfortunately, however, they do fill a niche for people who for whatever reason don't take the time to fully understand the value of their timeshare.

Onward and upward,

Mark

 

[Bill4728]

If you own at a resort that has a good HOA, you can help stop the postcard companies. You can write a letter or call a board member and ask for a paragraph to be inserted into every newsletter from the resort.

We are doing this at Twin Rivers. A letter has already been drafted and approved by the other board members, explaining to owners that they may deed back their weeks by paying one year of maintenance fees in advance.

I think what you're suggesting is a great idea.

As I've said before, companies which are in active sales are crazy to let units at their resorts go to these postcard companies.

 

[T_R_Oglodyte]

We are a consumer education site, and we certainly should be do our part to help owners realize they do have alternatives to the postcard companies.

Nevertheless, the postcard companies make clear that there are many timeshare owners out there who are desperate to be rid of their timeshares, and don't know how to go about doing so.

It's further clear that the oversupply of potential sellers has been far larger than the inventory that has been available in the market until now.

 

[e.bram]

One way TUG could help is make the free timeshare classified available to guests.

 

[Dave M]

Seems like no contest. Pay $15 for a TUG membership or pay $3,495 to a postcard company.

 

[JoeMO]

Still get the bill for MF's

A TS sales rep told me about someone who traded their unit in for a new one at a resort and they got a bill for the MF for two years after that. I guess the new resort didn't actually buy the old unit as the seller had been lead to believe. They just held it until it was sold. It didn't sell for a couple of years so the "former" owner still got the MF bill. I think you could have this same problem from a postcard company. If they don't sell your unit you are still the owner.

Thanks,
Joe

 

[calgarygary]

Seems like no contest. Pay $15 for a TUG membership or pay $3,495 to a postcard company.

Yes but 233 years later, you would be wiser but would you have finally unloaded that timeshare?

 

[Sponge]

Posted by rickandcindy:
I have great disdain toward the postcard companies. They make their money no matter what, but the original owners pay. How could an owner not benefit anything when ROFR is in place? It is a terrible system that allows this. I have to give credit to the geniuses who figured out how to make money on others' misfortune, but I would not want to face the consequences of their wickedness. I believe that the truth will out. There has to be an end to the postcard companies.

After having admitted to buying two of your unit's from these people talk about the POT calling the KETTLE BLACK. Get real!!!

 

[Bill4728]

Whether good or bad, postcard companies fill a niche. Do they take advantage of people who don't know any better?

Yes.

Is this a bad thing?

Yes, I suppose it is. Unfortunately, that's the way the world works. The strong manipulate the weak, in every aspect of life..... more....

But if the HOA and developers would say "Hey if you don't want it and want to give it back to us for free. We'll take it." Who, would then need to use one of these companies?

 

[Jennie]

Or, perhaps the resorts should have some provision for accepting the "doggie weeks" as deed-backs after the owner pays a "termination fee" of 2-3 years maintenance fees. It would bring income to the resort and prevent the unit from getting into a delinquency status that will cost the resort legal and other fees to resolve down the road.

 

[eoneguru]

I'm a relative Newbie and, I have to admit, I'm a little confused. I've seen many posts from folks who got a bargin on eBay (probably from one of these postcard guys) and been congratulated, by many members, for getting a good deal. I'm not trying to offend or bash anyone, but do we sometimes deal with them because they offer bargins and, at the same time, dislike them for the manner in which they do buisness? I have included myself in this group, since I made a recent purchase off eBay and the seller may turn out to be a "postcarder". I came to TUG seeking answers about timesharing. And, I became a member because I liked what I found here; helpful and knowledgeable people. Now, I'm asking to be "unconfused". I, also, realize that I'm leaving myself open to a sound bashing. So, let the bashing begin.

Ray

 

[calgarygary]

Cindy, I know it's no concilation for how you feel about postcard companies but I thought I would share with you my one and only dealing with them as a buyer at Ebay. I knew very little about timeshares, much less TUG or postcard companies when I was the successful bidder of a EOY 1 bedroom at Vistana Villages. What I received after signing the contract for VV was a deed for Sheraton PGA! I turned to TUG in frustration and posted about my situation in the What a Quagmire thread and most everyone suggested that I chalk it up to a learning experience and accept a refund. However I wanted my VV and started to educate myself as to how such an error could occur. It turned out that the Ebay seller, the escrow company and the source of the timeshare were 3 different arms of the same company. I further educated myself about Florida law and sent a final letter advising them of my intended course of action. At no time did I request anything other than what I contracted for - a 1 bedroom EOY at VV. Turns out that I must write a good letter as I was provided a EY 2 Bedroom at VV which has closed and I have my SVN and II accounts. I then contacted the escrow company about my costs (the MF @ PGA came due in the interim) and the refund cheque that they had sent me unsolicited which I wouldn't cash as I wanted the VV. I was advised to cash the refund cheque, I was then reimbursed the MF so I have ended up with VV at no cost! Although I now know that someone paid to give up that timeshare, I like to think that I won one for the good guys.

 

[rickandcindy23]

After having admitted to buying two of your unit's from these people talk about the POT calling the KETTLE BLACK. Get real!!!

I found TUG two years ago this month. I bought my first ebay purchases three and four years ago, from two ebay sellers. I had no idea, until about 18 months ago, how these companies work and how they were related to postcard companies. I never even knew postcard companies existed, because I didn't get one until months after we bought our first timeshare on ebay (I guess that postcard company wanted me to pay them to take the week I just purchased back). Then someone here on TUG attended a presentation by one of the postcard companies and put two and two together. Voila, the light bulb went off for me. Sure enough, I had purchased from two such companies.

So my purchases were innocent! Your comments were certainly unnecessary, Sponge. :annoyed: People who have known me for the past two years here on TUG know the story and also realize that I am trying to put a little bit of a dent in the pocketbooks of these guys.

Do I think you should all stop buying weeks from postcard companies. No! I am not criticizing anyone who buys from these guys. I bought from them myself. I think TUGgers may as well buy the weeks, since they are sitting out there for those cheap prices. Please do not think I am accusing anyone of keeping these guys in business. But I would eventually like to see the postcard companies lose their money trees. These guys actually make money from people who are uneducated about timeshare; they take advantage of others' naivete. They actually convince Hawaii timeshare owners that what they own is worthless and collect $3,495 to take the burden away. Is this a nice thing to do to a fellow human being, let alone a senior? I think not.

If we could write letters to our resorts and affect a 20% decrease in business for these guys, that would really hurt them. It would also raise the value of what we own. There are so many companies out there now that have followed the model of Vacation Solutions, the first company to use this model, that they are diluting inventory amongst themselves already. The greedy people are hurting themselves by providing a business plan that is both easy to follow and provides a huge amount of cash with little effort.

Calgarygary, I am happy that things worked out for you!

Quimby, thanks so much for your comments.

These companies know their business and are certainly polite, when you talk to them via email or phone. They need good feedback to stay in business on eBay. Con artists are always polite.

Ray, I am glad you found TUG too. You may be able to educate someone else in turn sometime.

Jennie, that is a good idea. Our resort is asking for just one year's maintenance fees in advance, then we will keep these weeks in inventory. Our owner base will be allowed to rent these weeks at very reasonable prices. It should work for us.

Steve, thanks for your comments, my friend. I am happy you see it that way. I know you are getting a little tired of my rants about postcard companies, but you are always so nice about it!

Dave, we should add into our resort's newsletter a blurb about TUG and the knowledge that all could get here. I would love to help people find a way to use their timeshares effectively. Even if the older folks don't use computers, their kids do.

Bruwery, I realize postcard companies fill a niche, and I agree. Don't forget that postcard companies have a list of resorts they will not take, even for $3,495, because they cannot resell them on ebay. So are they really filling that niche for the really frustrated owners at those resorts? Nah....

Bill, thanks for your support in this. I appreciate the moderators' comments here.

 

[Bill4728]

I'm a relative Newbie and, I have to admit, I'm a little confused. I've seen many posts from folks who got a bargin on eBay (probably from one of these postcard guys) and been congratulated, by many members, for getting a good deal. I'm not trying to offend or bash anyone, but do we sometimes deal with them because they offer bargins and, at the same time, dislike them for the manner in which they do buisness? I have included myself in this group, since I made a recent purchase off eBay and the seller may turn out to be a "postcarder". I came to TUG seeking answers about timesharing. And, I became a member because I liked what I found here; helpful and knowledgeable people. Now, I'm asking to be "unconfused". I, also, realize that I'm leaving myself open to a sound bashing. So, let the bashing begin.

Ray

Disliking the way that these "postcard" companies do business doesn't mean that buying a TS you want at a great price is wrong just because it is being sold by one of these companies. Does it?
Well, maybe it does.

One of the problems with these companies is they hid their ID so sometimes it hard to figure out who they really are. I bought a TS recently and only after 1 month did I find out that they were one of the postcard companies. I felt bad about it but didn't feel so bad as to cancel the sale. Maybe that make me a bad person, maybe not. But I did great a great deal.

I just feel bad for the previous owner who paid $3000 to then have me pay $1500 to the postcard company for a TS which he thought was worthless. So they, (the postcard company) made $4500 on this worthless TS.

 

[rickandcindy23]

I bought one from a postcard reseller recently. The listing was closing through Timeshare Transfer, so I had no idea this was another one of the companies. When Timeshare Closing Services or Title Outlet are used, I know that is a postcard company. Anyway, the seller lied to me through email and on the phone, when I asked him directly if he worked for a postcard company! He said, "nothing like that." It was another Vacation Solutions purchase. :annoyed: On the deed, there was the name of the company. I was sick about it, but I decided to stop kicking myself over it. I cannot go back to the original owners and help them, but I can prevent some other owners from making the same mistake.

So I did make a purchase from a postcard company since knowing better, though I was lied to.

I was thinking that if PAHIO just let owners know that a buyback was in place, these people would not ever resort to paying these companies, or paying upfront fee companies. (That is a different campaign.) It would sure hurt the ebay bargains because if developers started getting the word out, we can truly change the way people view timeshare. I know that Westgate does some sort of ROFR that does not work as it should, but most developers could do much better. I don't like the idea of developers making twice on that purchase, but I really hate the postcard companies making money from the owner. I don't care about the ebay resale, I care about the original owners, the people who were wronged.

 

[ttt]

The problem is that Pahio & other developers only care about the initial sale. They have their own interests to look after & don't really care much about the owners. If you could convince Pahio how THEY could make $$$ buy informing owners about buy-backs & first right of refusal, they might listen.

 

[PigsDad]

But if the HOA and developers would say "Hey if you don't want it and want to give it back to us for free. We'll take it." Who, would then need to use one of these companies?

What would be the HOA's incentive to take back weeks that were not wanted? They are currently collecting MFs on those weeks. If the HOA take those weeks back and can't sell them immediately (or at all), they lose MF $$$. That increases MFs for all the other owners.

The "evil" postcard companies do actually fill a niche for those who are not educated on all of the aspects of timeshares, and who feel trapped by a timeshare that has become a liability to them. They may not inform the owners of all their options, but they are in business to make money. If you walked into a electronics store, would you expect the salesman to inform you that you could purchase the exact same item for less $$ from a competitor or online? Of course not. Then why do people bash the postcard companies for trying to sell their product? It obviously has value to some people, otherwise no one would purchase their product.

Here's another analogy: I am no expert on how to get the best prices for an airline ticket. I know that I could go FlyerTalk and spend hours reading to educate myself on how to work the system more effectively. But I have chosen not to do so. So I end up paying more for airline tickets than some other people. Does that make the airlines "evil" because they have figured out how to charge some people more $$$ for tickets than other people? Same goes for timeshares -- some people have not educated themselves, and that somehow makes the postcard companies "evil" for making money?

The postcard companies are supplying a large inventory of inexpensive timeshares to the resale market. For a group with the unofficial motto of "buy resale", fighting against these companies seem counter productive, to say the least.

Kurt

 

[Born2Travel]

If the HOA were to take back weeks and offer them for free or a small fee to existing owners first, they might find happy owners that would add weeks to their holdings and continue to pay the MF with no issues. If they still ended up with inventory, they could offer it to the public at a small fee also and sell them just like the postcard companies do.

 

[rickandcindy23]

Kurt,
I know that these companies have a list of timeshares they won't even take. That is not helping people at all, when you know you cannot sell them, so you refuse to take them for any amount of money?

For resorts like all of ours, and we own many, there is a market. Mine are not Hyatts, Hiltons or Marriotts, but there are people want to stay in those timeshares and find them great for exchanging.

I am not trying to put the companies out of business; you didn't read everything I wrote. I want to put a dent in their business of about 20%.

One of our timeshare resorts has always taken deed-backs, and the resort commands a high price for those units and gets the money from current owners. All they have to do is list a blue week for $1,500 and they get it, usually from a person who lives near Denver and wants a week in the quiet season. But there is a market. So owners at that particular resort do not answer postcards, because why would they?

At Twin Rivers, our other Colorado resort, we are sending out the aforementioned letter to all owners, telling them of our policy, which will save them money and stop these companies from getting our owners' units. It is a simple solution. We are going to rent these extra weeks one at a time, to our owners, and make some of our money back. We may figure out something to do later on, but for now this will work.

As far as maintenance fees are concerned, resorts need to offer weeks to current owners at cheap prices, in order to keep collecting those maintenance fees. Many owners are pleased with their timeshares and want more. We bought three weeks from our Frisco resort, when they came up as available. This was years ago now, probably five years, but we really loved the resort and had great success trading with RCI, so we bought more weeks. Most people see value in them and will recommend their own resorts to others. If they can pick up additional weeks for free, then they will.

TUG members are skeptical. We know the bad side of timeshare because it grabs us every day. We see negatives here about upfront fee companies, assessments, postcard companies, etc. But the reality is that timeshare really is something people can use and want. Just because others are willing to give it up for a high cost, that does not mean we cannot offer alternatives to resorts and management companies.

An analogy of Flyertalk is not a good one. The garbage analogy that Jya-Ning used on www.timeshareforums.com was more on target. To some, timeshare is just another thing, a thing they want to rid themselves of. You can take the thing to the dump, or you can pay a company to haul it for you, or you can separate the good from the bad and recycle or resell whatever you can. It depends what you want to get out of it or how badly and quickly you want to be done with it. It takes time and patience to sell a timeshare, but better than paying someone to dump it for you.

There won't be less bargain timeshares on the market. There will be just as many, but you will have to search further than ebay to get them. You may have to contact resorts directly and ask about HOA owned weeks. If you know you want a resort, you should do that anyway.

 

[bruwery]

I wouldn't like the idea of my resort taking unwanted weeks from people. My resort at present has a good management company, an excellent board, great communication, excellent collection rates, terrific facilities, and an aggressive improvement/refurbishment plan.

If the board and mgmt company were to be forced to devote more time to acquiring and selling unwanted weeks, all the good things noted above would undoubtedly suffer. I think the board has a hard enough time merely dealing with the defaults; I don't want to turn them into full-time salespeople.

From my selfish perspective as an owner, my annual costs would have to increase to absorb the maintenance fees for the folks who turn in their unwanted weeks. The idea has been tossed around about charging a person two or three years MF to take the week off their hands. While that might help keep my immediate costs down, and it may sound good on the surface, I'm not convinced it's an effective idea.

The resort would still be put in a position of having to sell the weeks. As mentioned above, management shouldn't have to concentrate on selling. The distraction could serve to lower the quality of my resort, costing me more money down the road to get it back on track. (Holding on to all the weeks and trying to rent them wouldn't be an effective use of their time, either.)

Additionally, now the resort itself is charging people to take their weeks, then turning around and selling them. Yikes. Now they're a glorified postcard company!! I understand the intent may be different, but the result is the same.

This will not be a popular statement, but I say if the people are going to pay somebody to take the week anyway, they might as well pay the postcard company and let the resort management concentrate on managing the resort.

I'll be right back - I need to put on a Kevlar vest...

To me, educating the consumer is the only logical solution for thwarting the postcard companies. However, as I said earlier, you can't force people to learn. Some people will allow themselves to be duped no matter how much we try to help them. Some people actually go out of their way to avoid understanding things.

RickandCindy: I didn't realize the postcard companies actually turn down weeks they think they can't sell. It's logical enough, so I certainly should have known, but I guess I never thought about it. What a great website - there's something interesting for me to learn every day here at TUG!!

Onward and upward,

Mark

 

[bruwery]

Kurt,
I am not trying to put the companies out of business; you didn't read everything I wrote. I want to put a dent in their business of about 20%.

I'm struggling with this logic. Based on your disdain for them, why would you merely want to decrease their revenues rather than run them out of business? If you merely slow your enemies, they'll come back to haunt you; crushing them out of existence is the necessary course of action.

Mark

 

[rickandcindy23]

Mark, if your resort is run very well, as you say, then certainly some owners would jump at the chance for free weeks. There is no need to charge a dime for anything, so no marketing is required. You could advertise them here on TUG. Why pay the postcard companies even $1.00 + closing costs. Let's let the resorts make the cash closing the weeks themselves.

If your HOA board wants to educate owners, there is no reason they cannot. I few paragraphs in a newsletter, warning them about postcard companies would be appropriate. Education must come from the resorts, because where else is going to happen? A mention of TUG in the newsletter would also be a great idea. We can educate people here.

Ahh.... you own at Cypress Pointe. What a wonderful resort with a great board. Of course, John Chase is all about stopping postcard companies from doing this to the owners at your resort. He included a blurb about this very thing in your newsletter. He was ahead of me on this idea and I should have given him credit.