What Is YOUR Timeshare Worth now?
Often times, when being encouraged to buy a timeshare during one of those endless, merciless, overly aggressive sales presentations where potential buyers are 'pitched' some of the promising benefits of becoming a Timeshare owner.
Some of these benefits will turn out to be marginally true. One might enjoy years of great vacation experiences, exchanges and swaps while travelling the world.
Sadly, some of the alleged benefits are going to turn out to be blatantly false.
Almost every day we meet owners that were told that their timeshares would appreciate in "monetary value" and that it would be "a wise investment" to partake in timeshare ownership. This question eventually leads every owner to indubitably ask; "What is my timeshare worth now?".....
Myth#1 "Your timeshare is a real estate investment, and it will appreciate in value over time just like other real estate"
While some timeshare purchases are technically deeded or titled as real estate, the vast majority of timeshares rarely appreciate in value.
The fact is that most Timeshares hold a "pennies on the dollar" valuation, and sellers hugely outweigh buyers in droves.In fact many timeshares hold a negative value because of the Owners contractual obligation to pay annual maintenance, any special assessments and in some cases; Real Estate taxes.
Myth#2 "You can go to the destination of your choice whenever you want"
Availability is one of the biggest issues facing the timeshare industry.
"Availability" is one of the prime reasons disappointed Owners look to dispose of their timeshare. Waiting lists can span several years to get the premium destinations and even then additional fees are usually demanded.
The Timeshare industry simply does not have sufficient inventory in the most popular vacation destinations to accommodate the amount of points/weeks that developers have sold which should allow access to all the destinations offered. This leads to unavailability and long waiting lists.
Recently, after 'availability issues' plagued the industry and customers complained about lost points that went unused, timeshare companies allowed owner's points to accumulate or rollover (like unused cell phone minutes). While availability was already a problem, now Owners are accumulating more points making popular destination availability even harder to book.
Myth#3 "You can rent out your weeks/points for a profit."
Owners report that trying to rent out a single timeshare is an absolute nightmare. People looking to vacation have the ease and convenience of being able to do a quick search online, see availability menus & prices from all major resorts and instantly book a vacation of choice.
Individual timeshare Owners simply cannot compete.
Marketers who offer Owners 'rent out your timeshare for an upfront fee' are largely ineffective in actually renting out timeshare. Sadly, many owners have paid upfront fees for Timeshare Renting & Marketing services that were never delivered.
Myth #4 "Your maintenance fees won't increase."
If you have owned your timeshare for more than two years, you have already seen your maintenance increase. The average maintenance increase is about 6% per year. Ever increasing maintenance fees, property taxes and unpredictable special assessment fees are reasons that Owners look to dispose of their timeshares.
Myth#5 "Timeshares save you money."
This preposterous lie is at the heart of all timeshares sales. Unscrupulous timeshare marketing companies put together entire presentations fabricating, exaggerating and embellishing outrageous misrepresentations in an attempt to persuade their customers to purchase a timeshare rather than simply buying a vacation each time one is desired.
Timeshare salespeople are trained in highly manipulative selling techniques and because of the nature of this work, the sales people involved are often comfortable lying to customers.
Purchasers often report seeming to ignore their own common sense. Many owners state that they were worn down by hours of "strong arm" sales tactics.
Current and recent past Lawsuits, Investigations & Complaints;
Many of the significant negative issues at the heart of the timeshare industry have become newsworthy public knowledge. Many major developers and resorts are embroiled in investigations and lawsuits for misrepresentation of fact, egregious sales tactics as well as other troubling issues.
An alarming pattern of behavior has become evident;
- Consumer Financial Protection Bureau is investigating the sales, marketing, and financing practices of Westgate Resorts. A lawsuit against Orlando-based Westgate Resorts says the company lured Brazilian buyers with sales pitches in Portuguese, and then asked them to sign contracts in English. The lawsuit is filed in Orlando federal court as a proposed class action with three Brazilian citizens named as plaintiffs. The suit seeks full cancellation of timeshare contracts and other compensation.
A dispute involving Spinnaker Resorts Inc.'s Bluewater by Spinnaker on Hilton Head. A couple who paid about $26,000 for an interest in the 86-unit property sued the developer in Charleston in 2015. They alleged the seller hadn't registered as required under the S.C. Vacation Time Sharing Plans Act when the deal closed. The buyers are seeking a refund and their sales contract declared null and void. U.S. District Court Judge P. Michael Duffy put the brakes on the federal lawsuit last year while refusing Spinnaker's request for dismissal, saying he needed to clarify some legal points involving state matters. At his request, the Supreme Court agreed to "certify" three questions about the S.C. Real Estate Commission's authority in enforcing the timeshare law. The justices also expanded their inquiry to include litigation involving another developer that raised the same points. They determined that timeshare buyers in South Carolina can take their grievances to court, saying the wording of the law is clear and unambiguous. The timeshare developers named in the South Carolina lawsuits had been hoping for a different interpretation. Legal opinion _ http://www.sccourts.org/opinions/HTMLFiles/SC/27720.pdf
- Diamond Resorts International, is the subject of two recent state investigations as well as a class action lawsuit alleging that the terms contained within the timeshare contract were significantly different from the terms offered and promised during the timeshare presentation.
- Diamond agreed to pay Arizona state $800,000 and take back timeshares after the state alleged it had received hundreds of complaints of false statements and misrepresentations made during sales presentations.
- According to a class action lawsuit, BlueGreen Vacations misled presentation attendees by representing that their timeshare contract maintenance fees would not increase, when in reality, the maintenance fees increase on an annual basis. After the timeshare presentation, plaintiffs were reportedly taken into separate rooms in which a BlueGreen Vacations agent read them the timeshare contract and had them respond, “I agree.” However, the plaintiffs allege that the terms that were actually contained in the timeshare contract were different from the terms read during the presentation. Plaintiffs also claim that they were pressured to open two BlueGreen credit cards and to use the entire $5,000 credit limit as a down payment on the BlueGreen Timeshare.
- Marriott is battling a class action that alleges its points-based system is a racketeering scheme.
- Wyndham Vacation Ownership, the world's largest timeshare company lost $20 million when a Whistleblower exposed financial fraud of its elderly customers.
- Vacation Ownership Marketing Tours & The Berkeley Group paid between $56m and $76m to settle a class action lawsuit that claimed they made millions of unwanted and illegal robocalls between August 2011 and August 2012 in violation of the Telephone Consumer Protection Act.
- A class action lawsuit alleges Spinnaker Resorts broke the law by not registering correctly in appropriate states to sell timeshares.
- A class-action lawsuit has been filed against FantaSea Resorts alleging that the resorts engaged in unfair debt collections practices when they required buyers to execute deeds-in-lieu of foreclosure contemporaneously with the purchase of timeshare interests.
Consumer Protection Laws are enacted & enforced to protect the public from misrepresentations & deceptive sales practices. Timeshare sales & marketing is widely known for deceptive, exaggerated and embellished sales practices as is evidenced by the above list of allegations, class actions and settlements.
"....At the heart of the TIMESHARE INDUSTRY'S deception is THE FACT THAT the vast majority of timeshares will ABSOLUTELY nEVER provide any investment value in monetary terms or a capital gain...."
Consumer Protection Laws enable consumers to dispute and often terminate contracts due to breach or violation of consumer rights. Some customers have described the sales techniques as psychologically manipulative, unfair, egregious, misleading with wide discrepancies between the verbally sold product and the written contract describing the product. Many tell us they bought with the absolute promise they could cancel the next day, just to get out of the hours long presentation. Many then found they could not cancel for a variety of fraudulent reasons.
"....It almost seems as if the timeshare industry believes its customers are foolS...."
This same assumption is also evident in the numbers of timeshare post card companies, mail house companies, resale, rental & relief companies that all charge clients upfront fee's yet rarely deliver on their contracts or promises.
So, here's what we know;
- Timeshares are expensive because numerous excessive marketing and administrative costs are absorbed in the price tag.
- The price tag and ongoing maintenance costs create a Return On Investment that most owners will never monetarily recoup no matter how long they own it.
- Timeshares have maintenance fees that increase annually at around 6%
- Some Timeshares require real estate taxes to be paid
- Some Timeshares will have special assessments fees
- It can be difficult to exchange your weeks and your destination for the availability you may want.
- It can be difficult and expensive to finance a timeshare purchase.
- It can be difficult to re-sell, rent out, gift or dispose of a timeshare.
- Timeshare Owners are mercilessly telephoned, emailed, texted & hard mail solicited by: sales agents for attorneys, sales agents for advocates, vacation clubs, resale marketers, relief marketers, cancellation marketers & vacation package marketers.
To make matters significantly worse the timeshare industry itself does not support the notion of a successful resale or secondary market. The reason for this is that when a rare resale does occur, invariably it occurs at a hugely discounted price compared to the primary market (as bought directly from the developer/resort) yet the timeshare product in the secondary market is absolutely identical to the product in the primary market with the exception of the vastly discounted price tag.
A successful, secondary market for timeshares WOULD strongly benefit the consumer. However it would eliminate a portion of the primary markets sales and directly compete with the primary developers as consumers might then compare secondary Timeshare offering prices to primary offering prices.
Sadly, this all produces an overwhelming number of disappointed owners who want to dispose of their timeshares. Consequently, there are practically no willing buyers to take on the burden of the increasing annual maintenance, property taxes and unpredictable special assessment fees.
It is a tough pill to swallow.
We understand that you probably spent a lot of money on your timeshare.
While realizing that your timeshare doesn't have monetary value is tough, you are not alone. We work with clients all over the world who had no idea what the real market for their timeshare was like and letting customers know is not easy. Until clients see it for themselves, many still believe everything that their timeshare salesperson told them. The good news is, you know now and you can take action.
You have two options:
1. Keep The Timeshare - If the vacations you and your family are taking with your timeshare and all its annual costs are less expensive overall than buying vacations and you aren't having any availability issues, keep it! Simple math will tell you if the timeshare is worth keeping. In most cases, you would have to be using all of your points/weeks every year, and your annual maintenance fees (& Property taxes if applicable) would have to be lower than the cost of simply buying an annual vacation in order for it to make financial sense to keep it.
2. Get Rid Of Your Timeshare - If you were holding on to your timeshare, hoping that it would appreciate in cash value, then the harsh reality is - its time to let it go. You are better off getting rid of it as soon as possible rather than continuing to dump more annual maintenance* (*as well as taxes and special assessments).
Our goal is to provide you with the facts that hopefully will lead you to making the best decision for you and your family. We know that it is tough to come to this harsh reality, especially if you bought impulsively, but it is time to face the facts. No more lies, no more promises, you deserve to know the truth.
While it might not be the answer you were hoping for, but now you know.
"What are most timeshares worth - monetarily?"