The Queen of Versailles, David Siegel, and Timeshare Resale Values at Westgate Resorts

It has been said that there’s no such thing as bad publicity, and perhaps that’s true for David Siegel, self-proclaimed “Timeshare King” and CEO of Westgate Resorts. After all, how many other CEO’s of timeshare companies can you name?

What is not so clear, however, is to what extent publicity received by Siegel has negatively affected resale values of Westgate timeshares. Perhaps this is one the reasons most timeshare developers prefer to keep a low-profile.

When Siegel and his wife Jackie decided to build America’s largest private home, a 90,000 square foot palace aptly named “Versailles,” they attracted the attention of filmmaker Lauren Greenfield. Over the course of three years, Ms. Greenfield filmed interviews with the Siegels and their staff – including behind-the-scenes footage of Westgate Resorts operations. The resulting documentary film, The Queen of Versailles, was well received; winning the U.S. Directing Award at the 2012 Sundance Film Festival. (Now available on Netflix.)

The timing, of both the construction of Siegel’s home and the filming of the documentary, happened to coincide with the recent financial crisis; turning what might have been just another story about the excesses of the rich into a saga of survival. Ezra Kline, of the Washington Post, dubbed The Queen of Versailles “the single best film on the Great Recession.” When Siegel is unable to procure financing for Westgate Resorts’ receivables, construction on Versailles is halted and the very fate of the company appears to hang in the balance. In a candid moment, Siegel declares, “this is almost like a riches-to-rags story.”

Needless to say, The Queen of Versailles became a PR nightmare for Westgate Resorts. Siegel was so concerned about negative fallout that, the day before the film’s premier, he sued the filmmaker for defamation; claiming Westgate Resorts was depicted “in an array of defamatory, derogatory and damaging ways.” According to Siegel, by the time filming concluded Westgate Resorts was as profitable as it ever had been. The lawsuit has since been dismissed, but Siegel remains in damage control mode; appearing earlier this year on CNBC with his wife to announce “record profits” for Westgate Resorts and continuing construction of “Versailles.”

There’s no reason to doubt that both Siegel and Westgate Resorts are now financially solvent, but numerous other timeshare developers have gone bankrupt over the past 5 years. (e.g. Celebrity Resorts, Consolidated Resorts) When timeshare developers fail, the underlying real estate (individual timeshare interval) is not directly affected, but the resulting negative “buzz” often has lasting effects on perceived resale value. And speaking of perceptions, The Queen of Versailles portrays Westgate timeshare owners as victims of the same predatory sub-prime lending practices blamed for crashing the economy. Overall, it’s easy to conclude that Siegel’s PR mistakes have damaged the value of timeshares owned by hundreds of thousands of Westgate owners (at least temporarily.)

That said, now may well be the perfect time to buy a Westgate timeshare resale. Westgate Resorts makes a terrific product: Its timeshares are really, really nice. The properties are located on prime real estate. The maintenance fees are reasonable. And, for now, the prices are artificially low! Take this Westgate Lakes Resort and Spa resale, for example, located on some of Orlando’s best real estate and featuring leather furniture, granite and stainless kitchen, private patio, lock-out floor-plan, and large jetted-tub in master – priced thousands under cost.

westgate-lakes-resort-and-spa-living-room

Siegel has described Westgate Resorts as the “Rolls Royce of timeshare companies,” designed to allow ordinary Americans to “vacation like a Rockefeller.” Love him or hate him, if you’ve stayed in a Westgate timeshare, you have to agree with him.

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3 comments October 17th, 2013

Preparation is Key When Selling a Timeshare

Deciding to sell the family timeshare is a big decision that often involves careful debate and consideration – not to mention the emotions involved. It’s important to realize, however, that making the decision to sell is just the first step in the process of preparing for a successful sale of your timeshare property. Regardless of where you decide to list your timeshare for sale, proper preparation is essential for a smooth outcome. Below are 3 key steps to take before placing your timeshare on the resale market:

*For the purposes of this article I’m assuming that, like most timeshare owners, your resort does not offer an “on-site” resale program. If you are lucky enough to have that option, then little to no preparation is required. Just contact the on-site agent and inform her you’re ready to sell.*

1. Know Your Timeshare

It is absolutely essential to have a thorough understanding of the timeshare you are selling, and how it functions. The potential buyers will likely have been to your resort on a sales tour, but that doesn’t mean they won’t have unanswered questions. Most timeshare resale companies operate in a ‘for sale by owner’ fashion, meaning that you need to be prepared to speak with the buyers, and answer any questions they may have about your property. For instance: If you have a “fixed” week, can it be used at a different time of year at your home resort? If so, is there a fee? If you are a points owner, how many points do you receive and what date do they become available each year? If you own “floating” time, which weeks of the year are included in your season?

Having accurate answers to your buyers’ questions can make or break a potential sale, and providing inaccurate information can lead to problems at closing. The most challenging situations I encounter are sellers who have never used the timeshare, and have no idea of how it functions. If this is your situation, like it or not you are going to have to get educated about the timeshare if you want it sold. Here are a couple tips to help you get ready: If you are selling timeshare points, make sure to have a points chart handy to share with the potential buyers. If you are selling a “floating” week and your resort is one of those that never seems to have availability, go ahead and reserve a desirable week for next year and include it with the sale.

2. Be Aware of Any and All Fees Your Resort Requires

If there’s one guarantee about dealing with timeshares, it’s that there are a lot of upfront fees involved. Perhaps that’s just the nature of the beast – since the concept is, ultimately, about paying upfront for a “lifetime” of vacations. Most resorts will charge a “transfer fee” in order to transfer ownership from you to the buyers; this is not the same as the closing costs, which pay for legally transferring the deed to the new buyer. Call your resort and find out the exact amount of the transfer fee, and make sure to ask if there are any other costs either you or the buyers will incur at time of sale. Usually the buyers are responsible for closing costs, but adding a transfer fee on top can be a real negative. I recommend sellers plan on paying any resort transfer fees out of the proceeds from the sale. Also, make sure you know the exact amount of your maintenance fee – including the breakdown of charges. (i.e. maintenance fee, property tax, insurance, etc.)

Lock-out floor-plans are very popular today; allowing you to split your timeshare into 2 or even 3 weeks of vacation. Something that rarely comes up (until the least opportune moment) is that many resorts charge an additional fee when the “lock-out” feature is used. If you are selling one of these units, make sure you know whether additional fees are required to use or exchange each side as separate weeks. Disclosing this information to the buyers is a very good idea.

3. Find out What Transfers with Sale and What Doesn’t

Not all the benefits you received when you bought the timeshare are transferable to the new owners. This is to be expected when buying on the resale market, so don’t worry, but make sure you find out what’s transferable before placing your timeshare on the market. There are some resorts, for instance, where “points” ownerships become “weeks” ownerships at time of sale – obviously important information to know, and something that would factor in heavily to the asking price. What if you have accumulated “banked” points/weeks at time of sale? If these are deposited with an exchange company, like RCI or Interval International, then they’re not transferable. But banked points/weeks deposited with your resort developer may be transferable, and could be included as an incentive with sale – Contact your resort and ask about transfer fees and expiration date for any banked time.

Some timeshare ownerships include packages that allow for purchasing extra vacation time at a special highly discounted rate. If you own one of these, it was probably included by the developer as an incentive when you purchased. Review your paperwork carefully – some of these packages are actually able to be transfered to the new owner, albeit with certain caveats. I know of one such package that specifies it’s only transferable to family members, but that includes extended family that may only be distant relatives. (wink, wink)

Ready, Set, Sell

Taking the time to prepare for selling your timeshare can yield serious dividends; peace of mind being at the top of the list! Plus, the process of getting ready to sell is a great way to refresh your timeshare knowledge – something that will come in handy as you’re deciding on which timeshare resale company to use.

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Add comment October 10th, 2013

Timeshare Scams: Sympathy for the Devil

Back in 2009, a new type of scam popped up on the timeshare resale scene: The owner receives a call out of the blue from a stranger claiming their timeshare “is already sold” and then asks for several thousand dollars to complete the transaction. Of course, there is no buyer and the scammers disappear along with the money. I imagine that, when this hustle was still fairly fresh, it might have been believable to some owners desperate to sell after the recession.

On this blog, we warned timeshare owners of this “already sold” scam back in February of 2010. Elsewhere, throughout both the timeshare industry and mainstream media, similar warnings were issued around the same time. Yet, despite countless warnings – not to mention the obviously dubious story – timeshare owners continue to fall for this stupid trick. It’s almost enough to give you sympathy for the devil.

the-devil-you-know-will-not-sell-your-timeshareOkay, so maybe not sympathy exactly… But I have to state the obvious here: If you are willing to wire $3,000 to Mexico because someone called you on the phone with a catchy story, you are going to get just what you deserve. I have to wonder how someone that dumb would come into possession of $3,000 to begin with? My guess would be inheritance or personal injury settlement.

Last year, my 88 year old Grandfather received a call from Mexico: The caller told him that his grandson (he only has one, so he assumed they meant me) had been injured, arrested in Mexico, and needed $1,500 for bail ASAP. This call clearly put him into a panic, and my Grandfather was willing to pay to save me from a terrible Mexican prison – but he is not a complete idiot. After telling the caller that he’d need time to get the money together and needed to arrange a call-back, he hung up the phone and called my home number. My wife answered and assured him that I was at work here in Atlanta, not in a Mexican prison. My Grandfather kept his emotions in check – and kept his money. (Despite being particularly vulnerable due to early-stage Alzheimer’s.)

Yet, when timeshare owners wire money to someone they don’t know because they believe a fairly tale about their timeshare being sold, it’s the legitimate timeshare resale industry that gets the blame: More onerous regulations are passed and imposed upon law-abiding companies, more articles are written about “timeshare scams” that draw no distinction between the real and fake timeshare resale industry, and more consumers simply detest all timeshare resale companies because of being “burned.”

I say enough already! If someone gets tricked into wiring their money to a timeshare scam it is not my fault, it is not my company’s fault, and it is not the fault of the timeshare industry at large. If you have paid thousands of dollars because you thought your timeshare was already sold, you my friend have poor judgement at best – at worst, you are an idiot and your money probably ought to be in someone Else’s hands anyway.

This may sound harsh, it certainly is not politically-correct, but it’s true. We should not regulate every single aspect of our great country because of the stupid few, or we’ll just get more of this:

a-stupid-proof-society

3 comments August 15th, 2013

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