Posts filed under 'Resale Market'
During the last month alone, 3 high-profile timeshare scams have been raided by police in Orlando, Florida. In at least twenty news pieces on these developments, the public has been treated to images of SWAT teams busting down doors, police confiscating computers and printers, and the ubiquitous ‘deal board’ being dragged from a shady office by regulators. Taken at face value, these images may be reassuring; certainly, scandalous Florida-based timeshare resale companies give the industry a bad name. But, it takes a timeshare industry insider to recognize these stories are not good news – not at all. Behind the headlines are regulatory follies that threaten the very existence of a secondary timeshare market.
Exactly one year ago, this blog warned of a timeshare scam designed to convince owners that their properties were ‘already sold.’ Of course, to complete the deal required payment of an enormous up-front fee. Despite our best efforts (and those of numerous other legitimate timeshare companies) to warn timeshare owners, some continue to fall for this obvious fraud. The effects of the ‘It’s Already Sold’ scam have been devastating to real timeshare resale companies: forcing them to become apologists for their now-tarnished industry.
Making matters worse for the industry, reporting on timeshare scams rarely draws a distinction between real timeshare resale companies and criminal fronts. A notable exception is Illinois Attorney General Lisa Madigan, who warns of “scammers posing as timeshare resellers,” describing them as “fake.” All too often, descriptions of timeshare-related crimes are so vague and subjective they border on misleading: The Orlando Sentinel quoted police Sgt. Amy Ameye, stating victims “were told If you send money… we will get the paperwork going, we will get your timeshare sold for you” – a statement that could conceivably apply to any timeshare resale company, legitimate or otherwise.
In a press release from July 2010, the Florida Attorney General describes “actively pursuing timeshare resellers as part of a statewide initiative” – a blanket statement that presumably includes all timeshare resale companies. Given Florida’s prejudices, should it really surprise anyone that timeshare scams there have exploded? The State’s witch-hunt regulatory environment leaves no room for legitimate timeshare resale companies.
The Florida Department of Agriculture and Consumer Services
The ‘It’s Already Sold’ timeshare scam is clearly a crime that should be prosecuted. Possible Federal and State charges include Grand Theft, Organized Fraud, Intentional False Advertising, Mail Fraud, Wire Fraud, and that’s just for starters. So what crimes were the Orlando timeshare scammers charged with? Unlicensed Telemarketing, a third degree felony in Florida.
In Florida, timeshare resellers fall under the authority of the Florida Department of Agriculture and Consumer Services (DOACS), where they are regulated as telemarketing companies. According to DOACS investigator Sasha Velez the problem of timeshare resale scams in Orlando is “huge… We have over 40 to 50 cases unlicensed right now that we are looking into.” Of course, no one asked Ms. Velez the obvious questions:
What if these Orlando timeshare scams had telemarketing licenses? Would you have allowed them to continue defrauding consumers across the country? What if they scammed people in person, or via email?
This is the down-side of excessive regulation; the need for regulators. Folks that may be well-meaning, but just don’t get it. Solutions put forth by the DOACS, and others in Florida, have sought to criminalize the entire timeshare resale industry. The problem in Florida is not timeshare resale companies, it is criminals. If your State has criminals committing wide-scale fraud, the solution is not issuing telemarketing licenses, it is criminal prosecution.
February 16th, 2011
Should you use a Real Estate Broker to sell your timeshare? It’s a question that comes up often, as owners consider the various ways to approach selling timeshare. There really is no short answer, so let’s take a look at a few scenarios where using a Broker might come up:
Timeshare Brokers That Charge Upfront Fees and Commissions
I don’t believe in “two bites at the apple” – and Real Estate Laws in most locales prohibit Real Estate Brokers from accepting advance fees anyway. If you want to sell your timeshare through a Real Estate Broker, then choose one that works on a commission-only basis. If you cannot find a Broker to sell your timeshare on commission, you’ll have to sell the timeshare by-owner. There may be (and probably will be) upfront expenses to the Broker with whom you list, but asking for money upfront demonstrates a lack of confidence that should raise red flags for myriad reasons.
On-Site Timeshare Resale Programs
For some time now, one of the most popular pages on our website is a step-by-step guide I wrote on How to Sell Your Timeshare. In it, I suggest checking first with your resort to see if there is an established on-site resale program. These programs usually begin after the resort has fully sold out, and management responsibilities have passed to the HOA/POA. On-site resales are handled by a Real Estate Broker – one who is intimately familiar with your resort, resale values, and transfer procedures. Plus, you won’t be required to pay an up-front fee.
If this is an option for you, then look no further: You’ve found someone with the means, motive, and opportunity to sell your timeshare at current market value!
(A note of caution: Many resorts will tell owners that an on-site program is coming soon… Don’t get caught up spending thousands more in maintenance fees waiting for on-site resales to materialize. Either your resort has a program, or it doesn’t.)
High-End & Niche Vacation Ownership Resales
If you own a fractional quarter-share in Aspen, an ultra-luxury residence club, or Disney Vacation Club points, then there are Real Estate Brokers who specialize in your niche, and are more than willing to sell your timeshare at a fair price and solely on commission (and you’re doubtfully reading this post anyway.) With respect to fractionals and residence clubs, the sale prices are high enough to make handling resales profitable for a Broker. With Disney points, demand is high enough to keep a Broker busy – The Timeshare Store specializes in selling DVC points resale with no upfront fee.
Selling The Typical Timeshare – By Broker or By Owner?
If you are selling the “typical” timeshare – one without an on-site resale program, and one that is not in a high-end or niche market – then you fall into the vast majority of timeshare owners that want to sell. You may find yourself unable to locate a Real Estate Broker who will take your listing, but, if you do, the decision of whether to sell with a Broker or By Owner should be based on your desired outcome.
Real Estate Brokers are men (and women) of action; I have great respect for them. Brokers are likely to work towards a quick sale of your timeshare. Brokers are likely to be working with motivated and highly-informed buyers. Brokers are likely to consider the state of the market now when suggesting a sale price for your timeshare. Brokers are likely to minimize their upfront cost on your behalf…
As has been stated in this blog, and elsewhere, postcard companies/relief companies have literally flooded the market with near-zero priced timeshares over the last couple years. If the resale value of your timeshare must be based solely on past results, be prepared to take an enormous loss at time of sale.
Choosing to sell timeshare by owner, whether by advertising on your own or with a timeshare resale company, means you decide what the asking price will be. (Your asking price should be less than current developer pricing.) Selling timeshare by owner allows you to bait the hook, and wait to catch the right buyer – one that, perhaps, just heard the developer sales pitch at your resort, and has a higher perception of value. You won’t be limited to only the most informed buyers, making only the most bottom-line of offers. Selling your timeshare with by-owner advertising is really not selling at all, in a traditional sense, it’s putting it out there in a visible fashion – where it can be found by a willing buyer.
Currently, there is no accurate way to appraise the value of a timeshare – a fact that should delight timeshare owners, as their values mustn’t be tied to the depressed market of the last few years. By advertising your timeshare by-owner, you are free to pursue a fair resale value. When an interested buyer presents themselves, you might consider bringing in a Real Estate Broker to close the deal – after all, that’s what they do.
January 25th, 2011
One of the goals of writing this blog has been to spark conversations about selling timeshare, and the timeshare resale market. I believe that by exchanging ideas, both within the industry and with individual owners, a path forward will emerge – one that facilitates stronger resale values for owners, and fosters a more positive view of timeshare ownership. It’s in this spirit that I dutifully read the blogs and articles about timeshare resales that appear in my feed reader. Sadly, most of what’s out there is either spammy auto-generated nonsense, or simply a rehash of news stories appearing elsewhere. That said, times they are a changing…
Recently, some thought provoking dialogue has been taking place on the Wall Street Journal Online Community boards – an effort spearheaded by Richard Marquette, a commission-only timeshare broker. Topics have included resale values, ownership transfer procedures, and avoiding timeshare scams. Mr. Marquette is a vocal opponent of paying any fee to advertise your timeshare – a great concept if your timeshare can be listed on a commission only basis. (Timeshare brokers often limit themselves to high-line properties like Disney, Hilton, etc.) Overall, though, the dialogue has been informative and positive thusfar.
Elsewhere on the internet one of my favorite timeshare commentators, Mark Silverman – Timeshare Examiner, has been hard at work producing an exhaustive analysis of the secondary timeshare market. Mr. Silverman is a print journalist and radio commentator with a real love for the timeshare product that shows through in his perspective. He’s also probably also the only person talking about timeshare that can be reasonably considered unbiased. (Which is why we’ve linked to his website since the start of this blog.) Take the time to read his series of articles on the timeshare resale market and you won’t regret it!
There will always be conflicting ideas about how timeshares should or should not be sold, and that’s okay. Anyone with the courage of their convictions shouldn’t be threatened by an opposing viewpoint. What’s needed is an honest and open dialogue about the industry’s struggles. We can start with the common ground: timeshare owners should not pay a company that calls and tells them the timeshare is already sold, relief companies (or postcard companies) are poisonous to resale values, and timeshare owners deserve a robust resale market. Beyond that, only good can come from having more intellectually honest discussions about selling timeshare.
January 20th, 2011
Next Posts
Previous Posts
