Creating a liquid timeshare resale market

[Pmuppet]

I think the timeshare industry have enough problems/challenges and we should further complicate the issue by bringing in our government. Red tape wont do anything but worsen the problem.

If the government wants to get involved, they should start at the point of sale. These salesmen are selling pipe dreams that have LITTLE to NO value for tens, sometimes hundreds of thousands of dollars. They do it by distorting figure to illustrate a false sense of positive return on investment.

To falsely distort facts and data, leaving out critical information, to sell a product that has NO economic value for thousands of dollars should be a criminal act, imo.

If you cleaned up the point of sale, it would help out the entire industry as the future supply would greatly reduced cause these con artists would be forced out of the industry.

 

[ampaholic]

...

To falsely distort facts and data, leaving out critical information, to sell a product that has NO economic value for thousands of dollars should be a criminal act, imo.

...

Sounds like big tobacco when you put it that way.

Maybe the G-men could require a picture of a nice family getting turned away from their summer vacation by a full up resort with the warning:

"Caution - there are not enough red weeks for everyone - some points purchasers will be disappointed".

 

[AwayWeGo]

Replacing Timeshare Razzle-Dazzle & Ballyhoo With Something Cheaper & More Honest.

I would hate to see the bureaucracy expanded in any way, specially not for something as trivial in the overall scheme of things as timeshares.

Still, by me, cleaning up the timeshare biz is greatly to be desired.

I have been recommending for ever so long a timeshare biz model patterned after Wal-Mart for newly deeded timeshares, & patterned after CarMax for resales.

Good thing I haven't been holding my breath waiting for either of those to happen.

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

 

[timeos2]

I have a bunch of things I think the sellers (many now long gone such as Circuit City & Lechmere) should take back on demand:

- All these old cell phones that cost hundreds & cost me to keep active
- My ld computers. Thousands & I can't even give them away or throw them out (it's illegal!)
- My VHS junk. It never should have bet Beta (which I still use as professionals still do)
- LP records. Thousands. Can't give them away.
- Tires. Some are perfectly good. I can't get anyone to take them (wrong size) Again no no for trash

The list could go on. Timeshares aren't alone in having no readily available secondary market. To us it's a bigger problem because many paid the inflated developer price & are now hit with the true worth or lack of it & can't believe what they have done.

 

[ampaholic]

...
To mus it's a bigger problem because many paid the inflated developer price & are now hit with the true worth or lack of it & can't believe what they have done.

I once was sitting in front of my JBL L166 speakers rocking out to Sammy Hagar and Thin Lizzy (dates me?) when a door to door salesman stopped by.

This salesman was trying to sell "Thomas" brand sound systems - the dumb bunny tried the same trick as the timeshare sales weasels do - he bragged how his "Thomas" brand system could outperform my system.

He actually wanted more for his system than I had paid for mine (I bought on the cheap a large Pioneer receiver that had a blown transistor and repaired it and I had purchased cosmetically challenged L166 JBL's) - I had about $600 in my basic system and he wanted $750 for the "Thomas" system (he bragged it was the brand famous for Thomas "Organs")

I looked over his system and chuckled, I offered to buy his system on the spot if his 20 pound speakers could stand up to my Pioneer SX-1280 for 5 min.

Well long story short(ish) his "Thomas" brand speakers lasted less than a minute when the SX-1280 hit it's stride. Smoke rolled out as they froze up.

His Thomas system was a "fake" it was big pretty cases with lightweight "guts".

The Thomas speaker boxes were actually bigger than my JBL L166's yet weighed 1/5th what the JBLs did

I was a sport and gave this salesman a short lesson on what is required for moving lots of air with a loudspeaker.

But when he bragged how many of the "fake" systems he sold per week and his mark up I learned a huge lesson in human nature:

Caveat emptor doesn't even begin to describe how devious sales weasels can be.

 

[Carolinian]

They have happened, just not often. One Napail Way in Hawaii and Residences at The Crane in Barbados are examples.

I would hate to see the bureaucracy expanded in any way, specially not for something as trivial in the overall scheme of things as timeshares.

Still, by me, cleaning up the timeshare biz is greatly to be desired.

I have been recommending for ever so long a timeshare biz model patterned after Wal-Mart for newly deeded timeshares, & patterned after CarMax for resales.

Good thing I haven't been holding my breath waiting for either of those to happen.

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

 

[Carolinian]

The walk away game may work with some timeshare resorts but not others. Some play hardball and report you to the credit reporting agencies. A foreclosure, and that includes a timeshare foreclosure, will tank your credit scores big time.

When I was on my HOA board we always took deedbacks, but did not advertise that fact. Of the three resorts I presently own at, one each on the Outer Banks, southern England, and South Africa, all take deedbacks.

The PCC's are absolute sleaze. They con people into paying them big bucks to ''dispose of'' timeshares that have $2-3K market value even on the bargain basement of eBay and timeshares that HOA's will take back as deedbacks. They lie to these people and tell them either the timeshare is worthless or that there is no other option but to pay them to take it. PCC's are a more dishonest part of the industry than even the developer sales weasels.

The impact of the PCC's is also negative for many segments of timesharing. For members, the activities of the PCC's are what is driving HOA's to stop or limit taking deedbacks, and is driving HOA's to play hardball like doing the credit reporting. It has led some major timeshare management companies to go to full pushback mode and threaten to sue those who use PCC's for fraudulent conveyance. PCC's have also flooded the eBay market and driven prices and even the ability to sell weeks there down.

PCCs dont need defending ....they simply are. Just like the guys that pick up my trash, they are there to pick up my timeshare when I am ready to dispose of it...and just like the trash man...its a job that needs doing

ebay is not the only place to buy or sell a timeshare, but it works.

and the point I have been making to anyone that will listen (and I think Bocs point too) is that the hoas already have to take my timeshare back....they really have no choice. The question is do they want to do it the hard expensive way and foreclose, or do it the easy and cheap way and establish an orderly procedure to make it happen

Ive already decided my exit strategy...Ill offermy stuff to the poa, Ill offer it on TUG, and Ill offer it on ebay...if there are no takers Ill stop paying mf...If you think thats an acceptable strategy, than you are right. The hoas dont have to take deed backs, but if there is something you dont like about an hoa having to foreclose, you will petition your hoa to start thinking about a deed back strategy

 

[ronparise]

The problem with proposed solutions like Boca's is that before we can agree or disagree with the solution, we have to agree on the problem.... I have assumed that:

1) there is a problem with timeshares and
2) we all know what it is
3) we all agree that a solution ought to be developed

But Im wrong, we dont agree on anything




The first order of business in any problem solving discussion is to define the problem. If we cant cant define the problem it makes no sense to discuss solutions

So ...Let me put forward the problem as I see it:

I own timeshares at several resorts where the annual budget is based on less than 83% of the ownership paying their mf. ie their anticipated bad debt exceeds 17%

Simple arithmetic tells me that my maintenance fees are 20%higher than they should be.

So: I define the problem as bad debt and increasing maintenance fees


Now even if you agree that this is a problem its too soon to discuss solutions, I think you have to first ask why some folks arent paying.



The solution proposed by Boca assumes too much. It assumes that we agree that there is a problem and that we agree on what the problem is. He also assumes that we agree that a solution is needed.

It would seem that most here think that what we have is ok and that rising defaults and higher maintenance fees are just fine. There is no problem and there is no solution needed

For the record I think a secondary market is an absolute necessity and I would rather the industry itself, led by the POAs and developers, take the lead in developing one

 

[am1]

The problem starts by the uneducated buyer paying retail. After that some learn the system and enjoy the timeshare. Possibly buying more resales in the future. This group is heavily represented on TUG.

The others regret their purchase right away and want to dump it or regret it a few years later and want to dump it. They put very little effort into the purchase ($10 000's), put very little effort into using the timeshare ($500-$1000 a year). They will also put very little effort into deposing of the timeshare.

Timeshares should be a very liquid market as there are large quantities of the exact same thing. But it is a very inefficient market. To one person a timeshare is worth the retail pice they paid for it and to others it is worth the cost to get rid of it.

Converting weeks into points makes timeshares more valuable to owners. Except for the very prime weeks. Exchange fees add a lot of cost to a week, plus it can be a lot of work. How many new resorts are selling weeks?

One thing to keep in mind is non paying owners do not use utilities, facilities or wear on the rooms. So the cost is less than just doing the simple math.

A lot of resorts need to stop being timeshares. Full ownership would work better.

The ultimate solution is to just have by law people pay for their responsibilities. In that world everything would be cheaper because of it. But that is bigger than the timeshare industry.

 

[ronparise]

The ultimate solution is to just have by law people pay for their responsibilities. In that world everything would be cheaper because of it. But that is bigger than the timeshare industry.

So you have in the same breath given us a solution and immediately told us it wont work and I agree..a strong collections effort may bring in some money, but its not going to make for a happy group of owners...my not paying is not the real problem...figure out why Im not happy and why I dont want to pay and you will be closer to defining the problem and better able to design a solution

 

[ronparise]

Timeshares should be a very liquid market as there are large quantities of the exact same thing. But it is a very inefficient market. .

There's the problem Boca is addressing

The NYSE provides liquidity with a double auction, open cry auction system
The NASDAC uses a system of market makers

In both cases there is a place where corporate stock owners can go and almost be guaranteed a sale

For timeshares ebay is our auction market and The PCCs are our market makers...Maybe we dont have a problem. The POAs just need to refer their owners in default to a PCC

 

[am1]

So you have in the same breath given us a solution and immediately told us it wont work and I agree..a strong collections effort may bring in some money, but its not going to make for a happy group of owners...my not paying is not the real problem...figure out why Im not happy and why I dont want to pay and you will be closer to defining the problem and better able to design a solution

I think that people should be held accountable for their debts. Mortgage payments, credit card debit, timeshare maintenance fees, hospital bills, etc. So the current system would need a large overhaul.

What would credit card rates be if everyone bad back the money they owed?

Or hospital rates?

The housing bubble would never have been as big.

But for the purpose of this discussion all this means is there may not be a solution. Without an adequate consequence there will always be people who will not pay their debts.

It is possible there is no solution to the timeshare resale problem with how debt enforcement currently is.

 

[ampaholic]

I have been recommending for ever so long a timeshare biz model patterned after Wal-Mart for newly deeded timeshares, & patterned after CarMax for resales.

Alan - how exactly would we (or anyone) create/grow/establish a "super retailer" such as Wal-Mart for timeshares?

What would be their business model?

And CarMax - what is that?

 

[ampaholic]

The problem starts by the uneducated buyer paying retail. After that some learn the system and enjoy the timeshare. Possibly buying more resales in the future. This group is heavily represented on TUG.

The others regret their purchase right away and want to dump it or regret it a few years later and want to dump it. They put very little effort into the purchase ($10 000's), put very little effort into using the timeshare ($500-$1000 a year). They will also put very little effort into deposing of the timeshare.

Very well stated

Timeshares should be a very liquid market as there are large quantities of the exact same thing. But it is a very inefficient market. To one person a timeshare is worth the retail pice they paid for it and to others it is worth the cost to get rid of it.

Converting weeks into points makes timeshares more valuable to owners. Except for the very prime weeks. Exchange fees add a lot of cost to a week, plus it can be a lot of work. How many new resorts are selling weeks?

Yet there is another thread(s) saying how bad points are - mostly filled with posts by people who don't actually own points

...

The ultimate solution is to just have by law people pay for their responsibilities. In that world everything would be cheaper because of it. But that is bigger than the timeshare industry.

Not a solution - such laws already exist - perhaps bring back debtor's prison?:rofl:

 

[AwayWeGo]

Biz Model = Value For Money.

how exactly would we (or anyone) create/grow/establish a "super retailer" such as Wal-Mart for timeshares?

What would be their business model?

And CarMax - what is that?

Wouldn't have to be a big-box super-retailer -- although it couldn't hurt to have a bargain timeshare desk right there inside the Wal-Mart or Kmart or Target or Costco or BJ's Wholesale store, or more than 1 of the above.

The biz plan is selling lots of units at low mark-up, in place of the old & tired & embarrassing current biz model of selling a few here & there, at tremendous mark-up, via razzle-dazzle & ballyhoo & truth-stretching & arm-twisting & guilt-tripping & psychological manipulations -- & those only after the reluctant prospects are lured in by promises of freebies for attending a no-obligation 90-minute presentation.

Click here for CarMax.

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

 

[ronparise]

Wouldn't have to be a big-box super-retailer -- although it couldn't hurt to have a bargain timeshare desk right there inside the Wal-Mart or Kmart or Target or Costco or BJ's Wholesale store, or more than 1 of the above.

The biz plan is selling lots of units at low mark-up, in place of the old & tired & embarrassing current biz model of selling a few here & there, at tremendous mark-up, via razzle-dazzle & ballyhoo & truth-stretching & arm-twisting & guilt-tripping & psychological manipulations -- & those only after the reluctant prospects are lured in by promises of freebies for attending a no-obligation 90-minute presentation.

Click here for CarMax.

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

Do I assume a car max type operation for previously owned timeshares?

So its walmart for the initial sale, and carmax for resales...Ought to work. The question is who is going to make it happen...I suggest the current owners have the biggest stake. perhaps we could use their HOA's to get it started

and of course thats what Boca was suggesting

 

[ampaholic]

Checked out CarMax - it is a "super-retailer" chain of used car dealers created by Circuit City in 108 citys. I think it is similar to Pawn 1 here in the inland northwest (but larger and nationwide).

Actually I don't think I want just one retailer/chain in total control of the used timeshare market like Alan advocates - I envision more of a diverse market - but that's just me.

I think the single biggest "problem" that is behind the current lack of marketability of timeshare intervals is the poor (really poor in some cases) opinion many john q. public types have of timesharing and timeshares in general.

Me - I love timeshares and am willing to pay reasonable mf's to keep the doors open at my timeshares.

What percentage of the population even takes vacations that aren't just trips to visit family (and thus stay in the guest room/sleeper sofa)??????

 

[Carolinian]

One aspect of timesharing that I think is not grasped on TUG is that TUG is not representative of the population of timeshare owners in one other important respect. At least at mature resorts in many areas, exchangers are a minority, and resales tend to push the own to use majority even higher. Points are as much use to an own to use timesharer as a bicycle is to a fish. Own to use timesharers are a much much smaller part of the TUG population than they are of the overall timeshare owner population.

At the resort where I served on the board on the OBX, the percentage of weeks given to exchange companies was under 30% and talking to other HOA board members or managers at other resorts that number was quite typical. At a couple of European resorts I have traded into, one in France and one in Germany, according to the managers, their members who belonged to exchange companies were in percentages in single digits. At a couple of UK resorts, I was told that the percentage of exchange company participation was somewhat higher than on the OBX but still well under half.

Own to use members are much more stable members. At the resort where I served on the board, the overwhelming majority of summer weeks were still owned by the families which had bought them from the developer and the vast majority of them did not belong to exchange companies or have any interest in exchanging.

Now, even with only 30% of exchanger members, if these people suddenly jump ship, that can wreck havoc with your budget. I have long suggested that the best path for HOA's since RCI started down this path that is turning off many exchanger owners is to push resales to own to use groups.

The problem starts by the uneducated buyer paying retail. After that some learn the system and enjoy the timeshare. Possibly buying more resales in the future. This group is heavily represented on TUG.

The others regret their purchase right away and want to dump it or regret it a few years later and want to dump it. They put very little effort into the purchase ($10 000's), put very little effort into using the timeshare ($500-$1000 a year). They will also put very little effort into deposing of the timeshare.

Timeshares should be a very liquid market as there are large quantities of the exact same thing. But it is a very inefficient market. To one person a timeshare is worth the retail pice they paid for it and to others it is worth the cost to get rid of it.

Converting weeks into points makes timeshares more valuable to owners. Except for the very prime weeks. Exchange fees add a lot of cost to a week, plus it can be a lot of work. How many new resorts are selling weeks?

One thing to keep in mind is non paying owners do not use utilities, facilities or wear on the rooms. So the cost is less than just doing the simple math.

A lot of resorts need to stop being timeshares. Full ownership would work better.

The ultimate solution is to just have by law people pay for their responsibilities. In that world everything would be cheaper because of it. But that is bigger than the timeshare industry.

 

[Carolinian]

Why in the world would an HOA want to send their members to be ripped off by a PCC and their weeks to set sail on a Viking Ship?

PCC's like eBay are a small fragment of the market. Neither can be called a market maker.

There's the problem Boca is addressing

The NYSE provides liquidity with a double auction, open cry auction system
The NASDAC uses a system of market makers

In both cases there is a place where corporate stock owners can go and almost be guaranteed a sale

For timeshares ebay is our auction market and The PCCs are our market makers...Maybe we dont have a problem. The POAs just need to refer their owners in default to a PCC

 

[DanM]

Just to contradict a few folks and stir things up.
The resale market isn't harmed by people paying ridiculously high retail prices. In fact, the opposite is true. When there is a strong retail market (unlike now) then it supports higher resale prices. People think there must be value if someone else is paying so much more. Successful new developer sales would be good for the resale market.

Absent strong retail sales, the resale market is hurt most by
a. lack of demand due to the same economy that hurts retail, and
b. rising maintenance costs/exchange fees vis-a-vis rental values.

'a' is clear, so let's talk about 'b'. I started buying and using timeshares (resale) because with a little work I could parlay about $600 in maintenance and exchange fees into family size units that would rent for $1,000 to $3500. Due to maintenance and fee increases, I am now looking at around a $900 average cost for my weeks...while the units I trade into have actually dropped to $700 to $1000 rental value at the low end and the high has remained constant. I suspect most exchanges are done at the lower end --certainly anything that isn't a holiday week. What RCI has done with TPUs is make the dollar equivalency much more apparent. If I have 22 TPU that cost me $900 (with exchange fees) I can't get the $3500 rental value -- because RCI wants 60 TPU for it plus exchange fees. If I can only get a 22 TPU/$900 equivalent, then why am I bothering with a middleman? I can just rent and not have ongoing maintenance obligations. An educated consumer won't buy. There should be a market for $10 per TPU deals, but there is so much other product out there that it depresses prices across the board.

Solutions? Well, other than the economy getting better, I don't think there are any. The most appealing to me would be requiring new timeshare developments to dissolve after 25 years and sell the property unless a majority of owners vote otherwise. It would limit supply and give people an out, and maybe even make them some money on a well located site. Unfortunately, I can't see how that differs much from the right-to-use model where people would/should simply buy in for less... and r-t-u hasn't been a panacea for the resale market.

 

[ampaholic]

... Points are as much use to an own to use timesharer as a bicycle is to a fish.

I'll call bullpucky on this - I bought at Meadow Lake to USE and I have used (4 times already) and I love it. I bought points at Meadow Lake so I have owners ARP and can also "pick" the week I want to use.

I can reserve week 3, week 33 and/or week 53 if I have enough points (subject to availability). I have never failed to get a week I wanted when I reserve during the owners ARP period and I doubt I ever will.

I love Meadow Lake and the points work quite well for me.

Own to use timesharers are a much much smaller part of the TUG population than they are of the overall timeshare owner population.
...

Now this I agree with...

 

[Carolinian]

All real estate markets are local, and of course that includes timeshare, but I wonder if some have their panties in a twist a bit too much about how the broader timeshare resale market is really faring. I have not had the time to sit and run this comparision in a while but the last time I did in my area, here is what I came up with:

http://www.timeshareforums.com/foru...es-test-t-s-resells-down-only-marginally.html

Now there are likely some local timeshare resale markets in worse shape and some better, but making broad assumptions from eBay, a market deliberately depressed by the PCC's, is not realistic.

 

[chriskre]

What about the HOA's offering to take back the units and them offer them for free to anyone exchanging into the resorts or to current owners in good standing that are not in active sales. Maybe do a quick credit check just to make sure they are not a dead beat. Simple enough.

I just took on a foreclosure unit from an HOA for the transfer fees and MF's. I'd much rather take a unit from an HOA than from ebay but it's not an option at most resorts. Why? I dunno, maybe the burry your head in the sand mentality.

I could see alot of happy vacationers willing to take on a "free" week to return to. I used to own at Ft. Laud beach resort. It puzzled mem why the HOA was willing to sell to owners for 2K their foreclosure inventory, when I could easily go to ebay and buy that same unit for $100 or less. Why not give the current owners an opportunity to take on additional weeks for free or just the transfer fee and MF's.

At least they know the current owners are paying their MF's and many love their resorts and would love to have another week there. Many resorts rent to locals in the area. Why not give them a week and offer day privileges. To many that might be worth the perk of owning. Trading thru RCI would just be icing on the cake for many who would buy to use.

Maybe I'm just too simplistic in my thinking, but free from the HOA certainly works for me. I couldn't be alone in my thinking. I do see how people would be leary of taking a free unit on ebay or another avenue but from the HOA? That would remove all doubts about taking one on. They have the prospects checking in every day. Why not give them a printout in the welcome package of the units available. What could it hurt? I recently stayed at an HGVC in Marco and they did just that. Of course they weren't give away prices since they have an onsite realtor trying to sell those units but in resorts that have no prestigous name attached to them, why not?

 

[Ridewithme38]

What about the HOA's offering to take back the units and them offer them for free to anyone exchanging into the resorts or to current owners in good standing that are not in active sales. Maybe do a quick credit check just to make sure they are not a dead beat. Simple enough.

I like this idea, i thought i remember someone mentioning their HOA/POA/BOD sending out a list of weeks available for purchase with the yearly newsletter

 

[ampaholic]

What about the HOA's offering to take back the units and them offer them for free to anyone exchanging into the resorts or to current owners in good standing that are not in active sales. Maybe do a quick credit check just to make sure they are not a dead beat. Simple enough.

Many do

I just took on a foreclosure unit from an HOA for the transfer fees and MF's. I'd much rather take a unit from an HOA than from ebay but it's not an option at most resorts. Why? I dunno, maybe the burry your head in the sand mentality.

I could see alot of happy vacationers willing to take on a "free" week to return to. I used to own at Ft. Laud beach resort. It puzzled mem why the HOA was willing to sell to owners for 2K their foreclosure inventory, when I could easily go to ebay and buy that same unit for $100 or less. Why not give the current owners an opportunity to take on additional weeks for free or just the transfer fee and MF's.

HOA members are also owner's and as such they want to hold up resale value.

At least they know the current owners are paying their MF's and many love their resorts and would love to have another week there. Many resorts rent to locals in the area. Why not give them a week and offer day privileges. To many that might be worth the perk of owning. Trading thru RCI would just be icing on the cake for many who would buy to use.

Maybe I'm just too simplistic in my thinking, but free from the HOA certainly works for me. I couldn't be alone in my thinking. I do see how people would be leary of taking a free unit on ebay or another avenue but from the HOA? That would remove all doubts about taking one on. They have the prospects checking in every day. Why not give them a printout in the welcome package of the units available. What could it hurt? I recently stayed at an HGVC in Marco and they did just that. Of course they weren't give away prices since they have an onsite realtor trying to sell those units but in resorts that have no prestigous name attached to them, why not?

You might be onto something in the long run.