Buying from Developer. Biggest TS fraud?

[geist1223]

Most people have Lap Tops or other portable devices. We do not believe in Nanny States and would oppose most measures to save foolish people from themselves.

If there were no Developer Sales the building of new Resorts would come to a halt.

 

[escanoe]

Without developer initial sales, there would be no resales.

I bought my first timeshare in 2018 after knowing I wanted one for about 5 years and seriously researching ownership on TUG for a couple of years.

It does feel like buying resale is a fairly niche purchase. If 50% of TUGers started with developer purchases, it is much closer to 100% of owners I have random conversations with at the resorts.

It seems to me if all TS customers did research, many would never buy and those that did would consider purchasing resale first. I believe in a more functional market resale prices for desirable units would go up and developer prices would come down some.

It seems to me if all TS customers did research, many would never buy and those that did would consider purchasing resale first. I believe in a more functional market resale prices for desirable units would go up and developer prices would come down some.

But I guess many humans will always have vacation brains and we will probably never know what new timeshare sales would look like without smoke and mirrors being part of the show. That is what makes resales the great deal they are for many of us.

 

[PigsDad]

Without developer initial sales, there would be no resales.

There would also be no resorts.

Kurt

 

[LannyPC]

Just becuz it can be done on legal sense, does not make it right. Regulations can be put to control this. There has to be public attention drawn to it and changes enacted by legislation to make it happen.

Well given what you are ranting about, my best suggestion would be to exercise your civil right to contact your local politicians and representatives about the matter. Venting about it here on TUG to other TUGgers isn't going to get any legislation happening for which you are hoping.

 

[rickandcindy23]

There would also be no resorts.

Kurt

Yeah! AND we need some new resorts. So apparently there have to be people paying developers for weeks.

There aren't many new ones, if you think about it long and hard. Lakeshore Reserve is one of the newest in Orlando. Disney is busy building a bunch of new ones because it's Disney and people will pay. Westin Nanea is fairly new. Hilton is building the resort on Maui. How many new ones are being built and not just being rebranded? Not many new ones. I think people are getting wise and aren't buying as much as they did before. Look at Hilton's Parc Soleil, which is really nice, as nice as Bonnet Creek, even nicer, and just a few buildings.

We need more people to buy "new" timeshares to trade into or buy resale.

 

[Mongoose]

One of the biggest mistake many people have made (including me) is buying TS from Developer. Pressure sales by slick sales man. This is biggest fraud out there. While what has been done cannot to undone.

What are some of the ways to prevent new victims to get into this? How do you get

Unless the person find sites such as TUG, it is too late and damage has been done.

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy. I know it is too idealistic to think like that. Any thoughts?

I agree completely. I only by resale. The problem would be TS wouldn't exist if they didn't start with Developer investment.

 

[Fried_shrimp]

We all have right to hold our views. When you use pressure sales tactics to make a sale, it hurts many people. Just becuz it can be done on legal sense, does not make it right. Regulations can be put to control this. There has to be public attention drawn to it and changes enacted by legislation to make it happen. If you accept status quo, you are part of the problem IMHO. Make the world better for others even tho many here have been hurt financially by pressure sales techniques of developers. Some people can afford the financial hits more easily, some hurt a bit more, some even more.

Ah, there we go. Only took one post. If I disagree with your opinion, I'm wrong and part of the problem.

No, the problem is people not taking responsibility for their actions. It's always some one else's fault and someone else's responsibility to fix the problem. I have NEVER been hurt in an update. I've literally been to hundreds of them and have made 8 purchases during them. Maybe they don't teach in kindergarten anymore the diddy "Sticks and stones may break my bones but words will never hurt me." so no, the words sales folk use do not hurt people. Yes, many people go to an update blind and may be prone to impulse buying but that is squarely on their shoulders. They could have easy just said "No thank you" and walked away with their gift. But no, they made a purchase, got buyer's remorse and now it the salesman's fault because the buyer didn't pay attention and didn't verify everything in writing. Again, you're placing the blame on the wrong party. If someone knows nothing about timesharing, don't go to a meeting. If someone is prone to impulse buying, don't go to a meeting. If someone goes, don't make a purchase if you don't understand or get promises in writing on the contract. If someone makes a purchase, accept the responsibility that you willingly opened up your wallet and made the purchase.

 

[CalGalTraveler]

What has happened is the resale market value for a timeshare isn't anywhere close to the value when purchased. If the resale value was the same or higher than the purchase price there wouldn't really be this issue.

The ability to relinquish an ownership of a timeshare would not be such a problem if the resale price was higher or the same as the original selling price.

Bill

This. Would anyone buying developer have regrets if the resale price was same or higher than what they paid? How many Disney VC owners feel regret? The reason DVC has value is because of limited supply.

@rickandcindy23 has an interesting point. If supply now becomes limited, perhaps resale prices will rise. The problem has been rapid expansion and greed. Supply and Demand.

 

[Snazzylass]

"No, the problem is people not taking responsibility for their actions." Yup!

Frankly, I was shocked recently when I saw that someone was paying $1,000/mo for the contract for their T/S. Seriously, what kind of 1-week vacation is worth $12,000 + MF? Maybe we have a Math problem here.

I bought from the developer and could not be happier. I think my ROI was about 5 years, and that was 20 years ago. It was not high-pressure sales, and believe me, as a single mom with 2 little curtain climbers (at the time), I have been jerked around plenty. I was treated worse at a car dealership, but made my peace and forgave them for their perceptions years ago. That's life! I've been treated worse by insurance salesmen.

I was not high pressured. I told him I'd think about it and come back tomorrow. I did. Today, I think it's different. My developer actually had a lot of perks and bennies thrown in and I knew the value of them.

30 days? Really? People need to have a dollar amount for impulse purchases. Mine is $20.

 

[Snazzylass]

Yeah! AND we need some new resorts. So apparently there have to be people paying developers for weeks.

There aren't many new ones, if you think about it long and hard. Lakeshore Reserve is one of the newest in Orlando. Disney is busy building a bunch of new ones because it's Disney and people will pay. Westin Nanea is fairly new. Hilton is building the resort on Maui. How many new ones are being built and not just being rebranded? Not many new ones. I think people are getting wise and aren't buying as much as they did before. Look at Hilton's Parc Soleil, which is really nice, as nice as Bonnet Creek, even nicer, and just a few buildings.

We need more people to buy "new" timeshares to trade into or buy resale.

Doubtful. Many locals now have restrictions against adding more T/S. My developer was a family business who recently sold out to some goofy vacation club who manages the property. It is not easy to book a unit or any extra time, which is now advertised on websites. It's probably good for management and the long-term financial health and keeping MF low, though

 

[Fried_shrimp]

This. Would anyone buying developer have regrets if the resale price was same or higher than what they paid? How many Disney VC owners feel regret? The reason DVC has value is because of limited supply.

@rickandcindy23 has an interesting point. If supply now becomes limited, perhaps resale prices will rise. The problem has been rapid expansion and greed. Supply and Demand.

I'm sure plenty because even DVC resales for no where near what it cost. Granted, 50 cents on the dollar is better than nothing but the resale price is still no where near the same or higher than what they paid. Also, DVC is an RTU, not in perpetuity, so the developer can get those points back to sale over and over.

 

[dayooper]

Yeah! AND we need some new resorts. So apparently there have to be people paying developers for weeks.

There aren't many new ones, if you think about it long and hard. Lakeshore Reserve is one of the newest in Orlando. Disney is busy building a bunch of new ones because it's Disney and people will pay. Westin Nanea is fairly new. Hilton is building the resort on Maui. How many new ones are being built and not just being rebranded? Not many new ones. I think people are getting wise and aren't buying as much as they did before. Look at Hilton's Parc Soleil, which is really nice, as nice as Bonnet Creek, even nicer, and just a few buildings.

We need more people to buy "new" timeshares to trade into or buy resale.

If you don’t consider hotel conversions as rebranding, there are a few new ones coming on board. HGVC has 2 new resorts in NYC and one in Los Cabos that are being repurposed. They are also building completely new resorts in Maui and Charleston SC and have completed a new resort Japan. I do agree with your premise, though.

Timeshares have such a dirty name right now due to the slimy way salesman do business. While I understand and agree with the premise of the read the contract before you buy line, it’s still not right that a salesman tells half truths and outright lies to get people to sign on the dotted line. Yes, people need to read what’s in writing and deal with the consequences of their actions, but salesmen need to be held accountable for their words. Whether the presentations need to be recorded or not, I don’t know, but to say it’s acceptable for someone to tell outright lies to make a sale doesn’t sit well with me.

Our first (and only) timeshare presentation was on our honeymoon in Cancun. We were invited to a champagne breakfast. We were staying at an all inclusive resort so we thought it was part of the package. We sat down and they started giving us mimosas. After about 45 minutes and 2-3 drinks, we had a guest at our table, a very beautiful timeshare sales woman. She went through he presentation while we had drinks. No food yet. After about 2 more drinks, she proposed her offer. $25000 for a week in our room during our honeymoon week. This was 24 years ago! We almost fell out of our chairs laughing! She brought over her manager and he gave one last half hearted shot and let her go. We then got our breakfast, a doughnut. They gave us 300 pesos in resort credit and escorted us out. I understand how someone who has no clue that they are going to a sales presentation can get caught up in the moment and buy. The only reason we bought resale was after staying as guests with family friends, we did our research and saw the benefits of HGVC resale and purchased.

 

[AwayWeGo]

What's been needed for a long time in the timeshare biz is new sales based on something like Walmart & resales based on something like CarMax.

Wouldn't that be something ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[CalGalTraveler]

I'm sure plenty because even DVC resales for no where near what it cost. Granted, 50 cents on the dollar is better than nothing but the resale price is still no where near the same or higher than what they paid. Also, DVC is an RTU, not in perpetuity, so the developer can get those points back to sale over and over.

Although there are ups and downs, the impression I get from DVC owners is that most (if not all) purchases (including resale) have INCREASED in value. This is because of limited locations, limited supply relative to demand. While I haven't found a survey, there is plenty of anecdotal evidence:

DVC Resale During COVID

Hello! My Wife and I were looking into DVC before COVID hit. I was set on buying direct but now with the costs of resale contracts dropping, it seems to make more sense to buy one of those existing contracts. We would be first time buyers. If you buy resale, what are the restrictions regarding...

tugbbs.com

(Would love some DVC owners to weigh in on their experience. I also don't know how maintenance fees compare to renting.)

The RTU aspect is also like a lease benefit. Although it is a long exit, there is eventually an end to the contract. You don't have to wait for someone to die, or pay money for a deedback. If someone wants out earlier they can sell and get at least their principal back. Some get more.

How many DVC owners come on TUG saying they are stuck and need to walk? (I have yet to encounter one).

 

[PcflEZFlng]

I think DVC contracts, at least up to now, and probably likely well in the future, increase in value over time. I bought BCV direct in 2003, and sold the contract in 2019 for roughly double what I paid for it. Had I bought it resale, the return would have been even greater. Just my experience. YMMV.

 

[geist1223]

I thought DVC was establishing use restrictions on Resell? Can not use new Resorts?

 

[bnoble]

Some people don't care what they spend so long as it's easy. Some people have no experience dealing with a salesperson and fall apart under the pressure. Some people have a hard time saying no. Pressure and ignorance (or a lack of information) are powerful tools.

I think there is another piece to this.

For most people, timeshare is an aspirational purchase. They are on vacation, having the time of their lives, and someone promises to bottle this feeling for them to keep, year after year, "at today's prices." It represents an improvement in the number and comfort of their vacations, packaged in a way that seems (and usually is) affordable. I suspect the better sales agents don't need to browbeat their customers (at least, not much) but instead can tap into this emotional wellspring.

Someone who buys under those conditions does not want to know that it was much more expensive than it had to be. We see this even on TUG every once in a while---the new buyer who comes to ask our advice, nearly all of which is "rescind while you can," and then proceeds to argue with us. They didn't want to be told to rescind. They came here to a community of people who really like their timeshares to join the club.

And, over time, I suspect most people are pretty happy with their ownership even if they bought retail---particularly so now that most of the larger developers are offering free or inexpensive exit pathways, removing one of the worst features of most ownerships.

 

[bnoble]

How many DVC owners come on TUG saying they are stuck and need to walk?

This isn't common, but it does happen---usually someone who faced an unexpected change requiring them to sell shortly after they bought. There is a fairly persistent gap between retail and the secondary market, and you can be underwater for the first several years if you financed (and I suspect most do). That's especially true if you can't handle the sale yourself, and have to go through a broker.

DVC resales generally increase in constant-dollar terms, but not always. The post-housing-bubble recession saw a pretty dramatic downturn. I also am not sure whether they have increased in real terms or not. Maybe, but I'm not sure--I haven't done the math.

 

[Fried_shrimp]

Although there are ups and downs, the impression I get from DVC owners is that most (if not all) purchases (including resale) have INCREASED in value. This is because of limited locations, limited supply relative to demand. While I haven't found a survey, there is plenty of anecdotal evidence:

DVC Resale During COVID

Hello! My Wife and I were looking into DVC before COVID hit. I was set on buying direct but now with the costs of resale contracts dropping, it seems to make more sense to buy one of those existing contracts. We would be first time buyers. If you buy resale, what are the restrictions regarding...

tugbbs.com

(Would love some DVC owners to weigh in on their experience. I also don't know how maintenance fees compare to renting.)

The RTU aspect is also like a lease benefit. Although it is a long exit, there is eventually an end to the contract. You don't have to wait for someone to die, or pay money for a deedback. If someone wants out earlier they can sell and get at least their principal back. Some get more.

How many DVC owners come on TUG saying they are stuck and need to walk? (I have yet to encounter one).

Whether a DVC owners who sells and gets their principal back depends on when they bought. If someone bought 20 years ago there is a good chance they will get back what they put into it in the initial costs. If someone bought 3 years ago I doubt that is the case. And many owners, knowing it is an RTU, most likely wait until their RTU ends, especially resale buyers due to the shorter time left on the RTU. They know in advance they don't have to die to get rid of the product if they become unhappy with it (which many are becoming based on feedback on the DVC boards).

Again, because they are an RTU, most probably don't need to walk as their timeshare ownership will end automatically after a certain number of years. Perpetual owners don't have that luxury. And Disney will make much more money selling it the second or third time around.

 

[prajora]

Ah, there we go. Only took one post. If I disagree with your opinion, I'm wrong and part of the problem.

No, the problem is people not taking responsibility for their actions. It's always some one else's fault and someone else's responsibility to fix the problem. I have NEVER been hurt in an update. I've literally been to hundreds of them and have made 8 purchases during them. Maybe they don't teach in kindergarten anymore the diddy "Sticks and stones may break my bones but words will never hurt me." so no, the words sales folk use do not hurt people. Yes, many people go to an update blind and may be prone to impulse buying but that is squarely on their shoulders. They could have easy just said "No thank you" and walked away with their gift. But no, they made a purchase, got buyer's remorse and now it the salesman's fault because the buyer didn't pay attention and didn't verify everything in writing. Again, you're placing the blame on the wrong party. If someone knows nothing about timesharing, don't go to a meeting. If someone is prone to impulse buying, don't go to a meeting. If someone goes, don't make a purchase if you don't understand or get promises in writing on the contract. If someone makes a purchase, accept the responsibility that you willing opened up your wallet and made the purchase.

One of the biggest mistake many people have made (including me) is buying TS from Developer. Pressure sales by slick sales man. This is biggest fraud out there. While what has been done cannot to undone.

What are some of the ways to prevent new victims to get into this? How do you get

Unless the person find sites such as TUG, it is too late and damage has been done.

Seems that there should be laws against people buying from Developers unless they are given educational material and there is wait period before they are made to buy. I know it is too idealistic to think like that. Any thoughts?

Seems this topic got lot of people’s opinion. That is what TUG forum is meant for. We don’t have to all agree on something but be willing to have a healthy and respectful decision.
i am

Whether a DVC owners who sells and gets their principal back depends on when they bought. If someone bought 20 years ago there is a good chance they will get back what they put into it in the initial costs. If someone bought 3 years ago I doubt that is the case. And many owners, knowing it is an RTU, most likely wait until their RTU ends, especially resale buyers due to the shorter time left on the RTU. They know in advance they don't have to die to get rid of the product if they become unhappy with it (which many are becoming based on feedback on the DVC boards).

Again, because they are an RTU, most probably don't need to walk as their timeshare ownership will end automatically after a certain number of years. Perpetual owners don't have that luxury. And Disney will make much more money selling it the second or third time around.

Can someone explains the acronymns being used like DVC, RTU etc
Only used HGVC for Hilton Grand Vacation club,
TS for Time Shares
ROFR for Right of First Refusal

 

[CalGalTraveler]

DVC = Disney Vacation Club = Disney's timeshare system.
RTU = Right to use - Rather than a deed, Disney provides a "lease" to the timeshare to use for a period of years. At the end of the RTU the timeshare reverts back to Disney.

 

[Fried_shrimp]

Seems this topic got lot of people’s opinion. That is what TUG forum is meant for. We don’t have to all agree on something but be willing to have a healthy and respectful decision.
i am

If you accept status quo, you are part of the problem

This quote from you is hardly healthy or respectful banter. That is the main gist of my post. Also the ongoing "victimhood" statements are irritating. If you or anyone else have made purchases that you regret, you have only yourself to blame.

 

[CalGalTraveler]

IMHO...I believe it is natural for owners who paid high developer prices to feel taken advantage of. Especially when they learn that the value plummets the day after rescission ends and it is next to impossible to research what you need to know in the rescission timeframe, especially on vacation.

With that said, some owners who can afford it, shrug it off and just want the assurance and perks of buying developer and don't want to spend months researching resale to avoid getting scammed (which is a downside of resale which many Tuggers do not discuss).

This is similar to people who still buy new cars vs. resale while knowing the price will drop once off the lot. Different strokes for different folks.

The timeshare systems and contracts are overly complex - much of this is by design. Why deeds when they could RTU/lease pre-paid vacations with an exit time horizon? Deeds prevent owners from walking while providing the perception (unstated) that you own your own piece of vacation real estate that tends to appreciate. Marketing perception.

But many states such as Florida, South Carolina and California, caught up to this anti-exit effect and with public outcry have added non-judicial, anti-deficiency laws to enable people to exit by returning the timeshare. This is legislation that was sorely needed by an industry that couldn't control itself.

Now to skirt these laws, the industry has created land "points" trusts which contain deeds from many states. How can you say the non-judicial anti-deficiency laws of one state dictate for deeds from another state. You become the owner of many deeds. It is unproven in the courts. Watch your wallet.

It is time for TS companies to clean up their act and transition to leasing prepaid vacations with guaranteed exits. This will improve their reputation and grow the industry. We would be willing to buy more TS but the uncertainty of exit prevents us from buying more than the deeds we already own and enjoy.

 

[frank808]

Ah, there we go. Only took one post. If I disagree with your opinion, I'm wrong and part of the problem.

No, the problem is people not taking responsibility for their actions. It's always some one else's fault and someone else's responsibility to fix the problem. I have NEVER been hurt in an update. I've literally been to hundreds of them and have made 8 purchases during them. Maybe they don't teach in kindergarten anymore the diddy "Sticks and stones may break my bones but words will never hurt me." so no, the words sales folk use do not hurt people. Yes, many people go to an update blind and may be prone to impulse buying but that is squarely on their shoulders. They could have easy just said "No thank you" and walked away with their gift. But no, they made a purchase, got buyer's remorse and now it the salesman's fault because the buyer didn't pay attention and didn't verify everything in writing. Again, you're placing the blame on the wrong party. If someone knows nothing about timesharing, don't go to a meeting. If someone is prone to impulse buying, don't go to a meeting. If someone goes, don't make a purchase if you don't understand or get promises in writing on the contract. If someone makes a purchase, accept the responsibility that you willingly opened up your wallet and made the purchase.

TS sales are high pressure and hence should be regulated in the opinion of a poster. Lots of sales are high pressure but are not government regulated. I buy a car off a lot and if I drive it off lot I am bound to the contract. There is no right of recession like a TS sales gives you. You can cancel a TS if you have cold feet.

My take is stop blaming others and saying there should be laws against this. If it is truly illegal then yes. But for an adult that has made a choice, it was there choice and now they need to own up to said choice. No one put a gun to your head to sign the TS sales contract. I am of the opinion that you should own up to your OWN decision instead of crying and saying that you were duped by sales. Buying from the developer in the US you have the chance to research the TS contract and rescind if you do not like it. If you are past that recession date, then the blame falls on you. It is not someone else's fault you did not do your due diligence. I am tired of all the blame others mentality.

Full disclosure. My first TS was bought resale. Even though I knew of resales, I have bought direct from two developers (MVC and DVC). It made sense for me and I did not mind paying what they wanted. I did my research and made sure that I would be ok paying the developer costs.

 

[Fried_shrimp]

IMHO...I believe it is natural for owners who paid high developer prices to feel taken advantage of. Especially when they learn that the value plummets the day after rescission ends and it is next to impossible to research what you need to know in the rescission timeframe, especially on vacation.

This I disagree with. I have never felt "taken advantage of" even from the time of my first purchase back in 1989. The only issue I could say from back then was being told you could resale it (accurate statement but not reality). I never had/have the desire to resale it so that was no issue to me. I have to assume many, if not all, people purchase without the intent to resale.

With that said, some owners who can afford it, shrug it off and just want the assurance and perks of buying developer and don't want to spend months researching resale to avoid getting scammed (which is a downside of resale which many Tuggers do not discuss).

While this is accurate for anyone looking to purchase from 2010 onwards, it is not accurate for pre-2000. There was no research available, no TUG, heck, no Internet. Never saw a timeshare section at the library either. A lot of folks here bought way back before researching was a thing.

This is similar to people who still buy new cars vs. resale while knowing the price will drop once off the lot. Different strokes for different folks.

This is true but neither is good or bad. Just 2 different perspectives.

It is time for TS companies to clean up their act and transition to leasing prepaid vacations with guaranteed exits. This will improve their reputation and grow the industry. We would be willing to buy more TS but the uncertainty of exit prevents us from buying more than the deeds we already own and enjoy.

For at least 10 years now, Diamond Resorts has had some type of lease option. The current version is a 10 year lease with the option of converting to permanent points. IMO, I don't think it has helped Diamond improve their sales numbers, at least not by a meaningful amount. I do think they could clean up their act but not allowing sales folk to stretch the truth but I don't know of any way to monitor that.