Recent Hilton Buy Backs

[alwysonvac]

Could somebody please explain the main issue here so I can at least understand this conversation?

I think the confusion is due to multiple resale issues being discussed as one.
Seth is talking about two issues. If you keep that in mind it is easier to follow the discussion


Issue #1 - FORGED ROFR WAIVER DOCUMENT (new issue)

One of the unlicensed "brokerage" companies submits fraudulent right of first refusal documents with forged signatures. This has led to units "passing" right of first refusal at lower figures.

RICOBA: Wow, that is incredible! If you are aware of this fraud, I am sure Hilton is as well. Isn't there anything that Hilton can do to stop this (I assume) illegal behavior?
SETH: Their legal department is aware and working on it.

THINZE3: IMHO Hilton simply wouldn't recognize the new owner if they didn't sign off on ROFR.
SETH: They did, at higher sale prices.
I could be wrong but I took this to mean that HGVC recognized the new owner believing the new owner paid a higher resale price


ISSUE #2 - NOT HAVING A 3rd PARTY ESCROW COMPANY AND TITLE INSURANCE (existing issue that has been discussed before in previous threads)

This company does not allow anyone to take title insurance. Therefore, the buyer does not have clean title and may have problems when he attempts to sell the unit.

DEROS: I just look at my ROFR and there was no notarized signature. To tell you the truth the signature is a squiggly line. However, I have used my points already, 2008, and reserved rooms in 2009. Also, paid MF for two years. I don't plan to sell any time soon but I hope there is no issue if I do.
SETH: It will only come to light when you attempt to sell the unit.

SANDY LOVELL: I guess that is a red flag for everyone to check. Do you have a ROFR document with sellers name, buyers name, contract number, price and notarized HGVC signature. If not I think it might be a problem.
Perhaps that is why there have been a number of sales recently posted that are below what Hilton has been picking up by ROFR. Certainly 10K for a 7K week seems below their exercise $$ levels lately.
Do you have any upgraded $$ figures Seth or which has or has not passed ROFR?
SETH: Actually, you won't get that much info on the waiver. Make sure you use a licensed and bonded escrow company that allows you to take title insurance if you choose to take it (you may choose not to take it, but make sure it is allowed - and make sure to get a title search at a minimum).

TALENT312: IMHO, TS title insurance is a rediculously expensive extravagance. I'd say a buyer should go it only if they paid more money for the property than they are willing to lose, or willing to spend on legal fees.
SETH: It you buy a unit and do not have clean title, you may never be able to get rid of it, forcing you to pay maintenance fees, when you may no longer want the unit. Make sure you have a minimum of a title search, if you don't want to pay for the insurance.

 

[thinze3]

Actually, I think the issues are related. It appears that some think you would not be able to sell a unit in the future that has "squiggly line" instead of a notorized signature on "todays" ROFR - all this AFTER HGVC has recognized you as the owner and let you use your points for years.

Example:
Suppose I bought 7000 platinum points today for a low ball price and didn't use a "authorised" reseller. Suppose also that I received what I thought was a legitimate ROFR as some on this thread have done. Suppose HGVC recognized me as the owner and let me use the points for many years.

Please be specific here:
How would I have a problem selling if it was later discovered that my ROFR was never notorized? Would not HGVC would have the same ROFR in the future as they do now? They could either buy it back from me or not at that time.

Another question: Why would HGVC let you ever use your points if they had not signed the ROFR? Wouldn't HGVC know weather or not they had signed the ROFR?

 

[jestme]

Here is my take on it. Hilton is getting false paperwork from the buyers agent, with an inflated price, set that that way so that Hilton signs off on the ROFR. The only person that knows about this, is the buyers agent. The agent submits the paperwork, and gets it back from Hilton, and as the price shown is high, it passes ROFR. Then, in the final paperwork to the buyer, a false ROFR document comes as part of the closing package. Now, to Hilton, the place was sold fine, at a good price. To the original owner, he got the dollar amount that was agreed on with the buyer, because he doesn't get to see the ROFR document. According to the buyer, he got ROFR documents. Everybody is happy. Especially the agent who took their commission. As Seth said, the only time this becomes an issue, is when the buyer then goes to re-sell, and sends in documentation. If Hilton notices the price difference, or notices the ROFR isn't notarized or signed by one of their people, or matches the ROFR document to their originally signed one, there is a problem. At that point, if they can find the agent's other sales, they could create real havoc among their other sellers and purchasers.

 

[Talent312]

Another question: Why would HGVC let you ever use your points if they had not signed the ROFR? Wouldn't HGVC know weather or not they had signed the ROFR?

Sure, if HGVC knew they had not issued a Waiver, they'd refuse to process the transfer.
Well, they might, if they believe the transaction would have passed ROFR anyway.

The real question is, if there was a misrepresentation as to the purchase price (thru forgery or the parties being in cahoots), then:
... (a) Would the fraud ever be discovered? Maybe. These things often come to light in the unexpected ways, some document, some tax form, some innocent inquiry, or some disgruntled party... or spouse...
... (b) If not discovered, would the buyer still be able to sell the unit? I say probably, 'cuz even if the buyer's title is defective, the likelihood of anyone looking behind the Waiver itself is extremely remote. If Hilton doesn't find it, a superficial title search won't bring it to light.

 

[alwysonvac]

FYI...added clarification to post #101.

 

[timeos2]

Here is my take on it. Hilton is getting false paperwork from the buyers agent, with an inflated price, set that that way so that Hilton signs off on the ROFR. The only person that knows about this, is the buyers agent. The agent submits the paperwork, and gets it back from Hilton, and as the price shown is high, it passes ROFR. Then, in the final paperwork to the buyer, a false ROFR document comes as part of the closing package. Now, to Hilton, the place was sold fine, at a good price. To the original owner, he got the dollar amount that was agreed on with the buyer, because he doesn't get to see the ROFR document. According to the buyer, he got ROFR documents. Everybody is happy.

If that is really happening (and anyone with the sense to do it shouldn't admit it) once the deal is done and accepted as it says above everyone is happy and nothing should happen in the future. While technically questionable the whole ROFR thing is so one sided and unfair that IF someone can do this I secretly applaud them for beating a rigged system. Now that ROFR is in it's death throws perhaps the whole idea will just go away and the market can act as it should to set resale value. Personally I advise all buyers to avoid any resort / system with ROFR but if you must have it this is one possible way to buy at a real number that the SELLER is forced to take one way or the other. Why let Hilton (or Marriott or anyone else) steal it with ROFR nonsense?

 

[Seth Nock]

My point exactly. It appears that people are being scared into using "certified" agents only on this thread. If you have closed on your timeshare, and HGVC recognizes you as the owner, who cares where you bought it. This happens everyday with other developers including Marriott and Starwood. Why is HGVC any different?

I have bought two Marriotts, from PCC's no less, and have had no problems but have saved upteen thousand dollars. .... and Marriott DID NOT execute ROFR on either of them. Right now is the time to make low ball offers and get great deals on ALL timeshares if you are in the market. IMO

Not "certified agents". Licensed agents or private parties. Buying from an unlicensed broker is where there are issues. States license brokers for the protection of buyers. Unlicensed people acting as brokers is illegal and that is not the only illegal activity being done by that company.

 

[thinze3]

All this and no answer yet. Why would you have a problem selling in the future? The deed is in my name and is lien free.

Say I buy 7000 pts now for $8K and sell them for $11K five years down the road. HGVC has the option to buy it back or not. Again, where is the problem??

 

[Talent312]

All this and no answer yet. Why would you have a problem selling in the future? The deed is in my name and is lien free.

Ahem... My answer was: "If not discovered, would the buyer still be able to sell the unit? I say probably, 'cuz even if the buyer's title is defective, the likelihood of anyone looking behind the Waiver itself is extremely remote. If Hilton doesn't find it, a superficial title search won't bring it to light."

OTOH, if HGVC discovered the fraud, your purchase (and consequently your sale) could be voided.
... Clear enuff?

 

[Redrosesix]

Thanks Alwysonvac -- that was so helpful -- I'm finally getting this.

Well, since I'd be buying from Canada I'd be sure to use a licensed broker in any case. I'm not in much of a position to do anything if somebody tries to steal my money, so I'd be willing to pay what is necessary to ensure everything goes through ok.

As for ROFR going away, just the thought of this makes me quite sure I don't want to buy anything now -- even if I purchased resale I'd be guaranteed to lose money if I ever wanted to sell it. There isn't any talk of DVC choosing not to exercise ROFR -- not sure why anyone would expect HGVC to be any different.

 

[Talent312]

As for ROFR going away, just the thought of this makes me quite sure I don't want to buy anything now -- even if I purchased resale I'd be guaranteed to lose money if I ever wanted to sell it. There isn't any talk of DVC choosing not to exercise ROFR -- not sure why anyone would expect HGVC to be any different.

With or w/o the ROFR, you're likely to lose $$ with any TS. If HGVC exercises its ROFR, you won't lose any more $$, you'll get the same $$, but sell to HGVC instead of your buyer. One of the basic tenants of TS's is that you do not buy with the objective of making money - its not an investment - you buy to use. Amortize your cost over however many years expect to use it to decide if its worth it.

 

[timeos2]

Not buying a ROFR property is a good move. Buy low cost resale & you might break even

Thanks Alwysonvac -- that was so helpful -- I'm finally getting this.

Well, since I'd be buying from Canada I'd be sure to use a licensed broker in any case. I'm not in much of a position to do anything if somebody tries to steal my money, so I'd be willing to pay what is necessary to ensure everything goes through ok.

As for ROFR going away, just the thought of this makes me quite sure I don't want to buy anything now -- even if I purchased resale I'd be guaranteed to lose money if I ever wanted to sell it. There isn't any talk of DVC choosing not to exercise ROFR -- not sure why anyone would expect HGVC to be any different.

Then you haven't read the DVC Boards. Not only might they stop or reduce ROFR - it is guaranteed to fall as the end of RTU gets nearer (DVC is not deeded for life but only for XX years). No timeshare holds retail value - ROFR doesn't protect buyers resale price (see the many threads on that especially the University study that proved it lowers resale values) and resale purchase is the best chance of getting a fair value going in thus making a fair value selling the most likely. Remember that timeshare is vacation, not investment, and just keep your outlay to a minimum, figure zero value at resale, count those annual fees as the true cost of vacationing and you'll do OK especially if you get a few dollars when you are done with it.

 

[Redrosesix]

With or w/o the ROFR, you're likely to lose $$ with any TS. If HGVC exercises its ROFR, you won't lose any more $$, you'll get the same $$, but sell to HGVC instead of your buyer. One of the basic tenants of TS's is that you do not buy with the objective of making money - its not an investment - you buy to use. Amortize your cost over however many years expect to use it to decide if its worth it.

Then you haven't read the DVC Boards. Not only might they stop or reduce ROFR - it is guaranteed to fall as the end of RTU gets nearer (DVC is not deeded for life but only for XX years). No timeshare holds retail value - ROFR doesn't protect buyers resale price (see the many threads on that especially the University study that proved it lowers resale values) and resale purchase is the best chance of getting a fair value going in thus making a fair value selling the most likely. Remember that timeshare is vacation, not investment, and just keep your outlay to a minimum, figure zero value at resale, count those annual fees as the true cost of vacationing and you'll do OK especially if you get a few dollars when you are done with it.

I understand this about both of these systems. But I was thinking about how the TS's at some of the Sheraton and Wyndham resorts are basically being sold for nothing right now. There's a huge difference between assuming that your TS has some residual value and having none, especially if that could happen overnight. This makes me wonder if we shouldn't consider buying one that is already valued at zero instead.

BTW, we spend our summers in an RV at a seasonal site in a campground. I have no fantasies about getting what I paid for it when we're ready to move on (although I bought resale there too, so I won't lose as much) but at least I know that it will always have some value if I maintain it properly.

Gonna have to go find those threads about ROFR that you mentioned.

 

[thinze3]

Back to my original discussion:
Has anyone yet had a platinum 7000 point unit pass ROFR for well under $10K? Under $9K? I will be interested if it gets to about $7K.

Amazing how the discussion of getting VERY CHEAP units passed HGVC's ROFR immediately turned into the mention of 'fraud', lack of 'notarized signatures', 'squiggly lines', lack of 'clear title', and 'inability to sell' in the future.

 

[Redrosesix]

Back to my original discussion:
Has anyone yet had a platinum 7000 point unit pass ROFR for well under $10K? Under $9K? I will be interested if it gets to about $7K.

Amazing how the discussion of getting VERY CHEAP units passed HGVC's ROFR immediately turned into the mention of 'fraud', lack of 'notarized signatures', 'squiggly lines', lack of 'clear title', and 'inability to sell' in the future.

I have been searching for just such information. I like the ROFR thread on the DVC forums over at DisBoards -- we're tracking AKV right now and I find that information so helpful.

I did find a similar link for Marriott TS's (but there are no posts for the Orlando area that I can find since 2008), but nothing for Hilton.

 

[hockeybrain]

Thinze - I just do not buy the conspiracy theory. Will Hilton keep the ROFR? I hope they do because it protects their time share unit brand. As a non-owner right now I hate the idea of having to pay significantly more and perhaps more than double for a resale in this market. However, if I was a Hilton Time Share owner I would be really pleased that Hilton has ROFR and would hope they maintain it. I plan on buying, paying more on the resale than I would have because of ROFR but hope one day I can sell for close to what I paid for it because of ROFR. Who knows what the future will bring?

 

[Blues]

Back to my original discussion:
Has anyone yet had a platinum 7000 point unit pass ROFR for well under $10K? Under $9K? I will be interested if it gets to about $7K.

No, my purchase didn't pass ROFR because it was a Flamingo unit, not subject to ROFR. But I bought a 7000 point 2 BR Platinum Flamingo week last June for $9800 on eBay. Have been enjoying the points since then.

-Bob

 

[Talent312]

Thinze - I just do not buy the conspiracy theory. Will Hilton keep the ROFR? I hope they do because it protects their time share unit brand.

It gives them control over a ready supply of relatively "cheap" TS's they can turn around and sell (the points) to the unwashed masses at retail prices (as if they were "new"). IOW, its more about the spread
... and their sticky-fingers.

 

[Redrosesix]

Then you haven't read the DVC Boards. Not only might they stop or reduce ROFR - it is guaranteed to fall as the end of RTU gets nearer (DVC is not deeded for life but only for XX years). No timeshare holds retail value - ROFR doesn't protect buyers resale price (see the many threads on that especially the University study that proved it lowers resale values) and resale purchase is the best chance of getting a fair value going in thus making a fair value selling the most likely. Remember that timeshare is vacation, not investment, and just keep your outlay to a minimum, figure zero value at resale, count those annual fees as the true cost of vacationing and you'll do OK especially if you get a few dollars when you are done with it.

Still looking for those threads that explain why ROFR would reduce resale values...

 

[timeos2]

Proof from an actual study not "I think.."

Still looking for those threads that explain why ROFR would reduce resale values...

There are a ton of them (Search for ROFR and stand back) although many seem to have scrolled off due to the date. Here is one link to the University Study that proved ROFR does NOT favor sellers or higher prices.

 

[jestme]

There are a ton of them (Search for ROFR and stand back) although many seem to have scrolled off due to the date. Here is one link to the University Study that proved ROFR does NOT favor sellers or higher prices.

University studies have long been subject to the rules of the study and not necessarily what the study is about. The example in this particular thread is about selling permanent real estate, that is currently rented, on a lease, in the UK. The renter has, in their lease, an agreement of ROFR. What the story doesn't mention, is that ROFR is applicable on ANY offer made on the house. So, in fact, if someone came back with a different offer, the renter gets another chance to buy at the new, agreed price. Turning down the first offer does not eliminate the ROFR agreement.
This is totally a different scenario from a timeshare ROFR,, where typically,the developer is the potential benefactor of the ROFR.
Selling a timeshare is about what the seller is willing to accept. Not what the buyer is willing to pay. Once the seller has accepted an offer, that is what they will get for the property. He will get it either from the buyer, or from the company exercising ROFR. In these discussion boards, we tend to focus on the buyer, and his hope to get something cheap, not necessarily on the seller who has decided he is willing to take that amount, regardless of who pays it.

 

[timeos2]

ROFR has been exposed as what it is. No friend to owners

University studies have long been subject to the rules of the study and not necessarily what the study is about. The example in this particular thread is about selling permanent real estate, that is currently rented, on a lease, in the UK. The renter has, in their lease, an agreement of ROFR. What the story doesn't mention, is that ROFR is applicable on ANY offer made on the house. So, in fact, if someone came back with a different offer, the renter gets another chance to buy at the new, agreed price. Turning down the first offer does not eliminate the ROFR agreement.
This is totally a different scenario from a timeshare ROFR,, where typically,the developer is the potential benefactor of the ROFR.
Selling a timeshare is about what the seller is willing to accept. Not what the buyer is willing to pay. Once the seller has accepted an offer, that is what they will get for the property. He will get it either from the buyer, or from the company exercising ROFR. In these discussion boards, we tend to focus on the buyer, and his hope to get something cheap, not necessarily on the seller who has decided he is willing to take that amount, regardless of who pays it.

Everything you say is correct and verifies exactly what has been stated over and over. ROFR does NOTHING for the SELLER or BUYER (the seller gets the low ball, agreed to market price - the willing buyer screwed out of a deal) while the developer steals the unit for market price, continues the ruse that somehow prices for their resort is higher because they have ROFR (see SELLER who got the LOW price NOT any tyoe of guaranteed floor or miniumum rice) and turns around and resells it as new to some poor dupe who buys into the scam. Meanwhile the spurned BUYER, if they are smart, understands the losers game and never again offers on any ROFR property (or at least keeps offering only the low value the market supports so eventually the Developer gets tired of buying as Marriott did) thus the NEXT seller finds even less offers (if any), cannot sell their week when they want or for anything close to what they mistakenly believe was the "going rate". The scheme is also supported because the true, low sales prices are hidden as the real winner - the developer - doesn't publish them and the SELLER, now out of the bad deal, takes their few bucks and slinks off glad to have any buyer at any price. The few that are willing to talk have verified that they were surprised that it didn't get them more they simply got the low price from XXX developer rather than the willing buyer THEY had to scratch around to find. It would make Bernie M proud that after all this time some still think ROFR benefits them and supports higher values. Nothing could be more off the mark.

 

[JonathanIT]

ROFR does NOTHING for the SELLER or BUYER (the seller gets the low ball, agreed to market price - the willing buyer screwed out of a deal) while the developer steals the unit for market price, continues the ruse that somehow prices for their resort is higher because they have ROFR (see SELLER who got the LOW price NOT any tyoe of guaranteed floor or miniumum rice) and turns around and resells it as new to some poor dupe who buys into the scam. Meanwhile the spurned BUYER, if they are smart, understands the losers game and never again offers on any ROFR property (or at least keeps offering only the low value the market supports so eventually the Developer gets tired of buying as Marriott did) thus the NEXT seller finds even less offers (if any), cannot sell their week when they want or for anything close to what they mistakenly believe was the "going rate". The scheme is also supported because the true, low sales prices are hidden as the real winner - the developer - doesn't publish them and the SELLER, now out of the bad deal, takes their few bucks and slinks off glad to have any buyer at any price. The few that are willing to talk have verified that they were surprised that it didn't get them more they simply got the low price from XXX developer rather than the willing buyer THEY had to scratch around to find. It would make Bernie M proud that after all this time some still think ROFR benefits them and supports higher values. Nothing could be more off the mark.

I agree with your scenario... up to the point where the buyer just walks away from ever trying to purchase another deed at the same property (if they don't pass ROFR). I don't agree this is what all buyers are doing, if a person makes a bid on Marriott, or HGVC, or DVC... that person wants Marriott, or HGVC, or DVC. I would think that if they are attempting to buy a TS in the resale market, they have researched exactly what they wish to purchase.

I know if I wanted to buy DVC, I wouldn't just walk away and say "screw it with ROFR, I'm done!" Please, I have a little more patience than that! And I want DVC! I can either keep trying to land a low-ball contract, or I can up my bid a little bit to what is know will pass. Sounds pretty good for the seller to me.

Those buyers who might do what you are suggesting... IMHO are pure speculators who see some cheap TS and want to scoop it up just because it's cheap. I think it's better for the seller if those people walk away.

Also, I think you're attempt to make the seller a "victim" in this scenario is way off. The seller agreed to the sale--ROFR or not--so it is obviously a fair price for them or they would not have agreed to it! What if the ROFR passes... does the seller still "slink" off with his "few bucks" to pout? Well, maybe they shouldn't have agreed to sell it for that price in the first place then.

 

[Sandy VDH]

I have been thinking about why would anyone broker would need tainted paperwork in the first place.

The one scenario that makes sense to me as to why some nefarious activity would be taking place, is the scenario where someone not that knowledgable falls prey to a PCC type operation, where they worse case, pay a fee or slightly better just hand over their "worthless" timeshare. The broker then lies to both the original owner (worth nothing) and the new buyer (worth $) and HGVC contracts (worth $$).

Perhaps they need the deceptive ROFR waiver to keep HGVC and the Seller in the dark. They want to turn over the units quickly so pricing it lower and having tainted paperwork to cover you tracks, would make less initial waves.

In that situation perhaps everyone but the broker loses. The original owner gets little or nothing, the new owner gets a TS at a great price (but perhaps through some dubious paperwork, which may or may not have ramifications later), and HGVC loses the opportunity to ROFR a unit they might actually buy back. The broker make out the best, pockets the fee to unload the timeshare, or fee to sell it, and then also could pockets what they really sold it for.

All of this is just supposition. I have no knowledge, facts or proof. Hey isn't that what makes a good conspiracy theory.

 

[AwayWeGo]

Short Version.

It would make Bernie M proud that after all this time some still think ROFR benefits them and supports higher values. Nothing could be more off the mark.

ROFR = ROFL.

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