I met a lady who used to sell timeshare, and she insists that
timeshare is a perfectly legitimate business that got a bad rep due to
some shonky operators in the 1980’s.
I’m in Australia, but I always thought that timeshare was known the
world over as a scam. The way I understood how timeshare worked was
that people would be lured into going to a free information night and,
before you know it, they’ve signed a contract for several thousand
dollars for the use of a unit for a couple of weeks a year. This never
really struck me as a prudent investment.
In any case, I’m looking for sites that explain how this operation
works in detail. What’s the psychology behind every step, and how
exactly are these prospects convinced to commit such a large amount of
money so quick for something that doesn’t even seem like a fair deal?
The key word here is "exactly."
I’d also like to get at least an idea of the alleged legitimacy of the
business, though I suspect that once you know how it works, it should
be self-apparent.
Hi markabe
I agree with the lady's description.
Here is a quote:
".. Time share became a big, dirty business back in the '80s,
notorious for its hard-sell
approach pushing weeklong shares of condos scattered
in vacation spots around the world.
So many people felt scammed in the process that the industry hit
the skids as leery consumers shunned anything with the time-share
stigma attached. .."
http://cageyconsumer.com/timeshare.html
State of Hawaii in particular clamped down on scams. I signed for
a 'free offer' when on vacation in Hawaii and I can relate the
experience.
The offer included the paid trip to another island to inspect the
property,
lunch, presentation. It is the the beauty of some of these places
which
does most of the selling. I signed up, but had no problem changing
my mind
and canceling within few days - as specified by Hawaii law.
Is it a good deal?
Usually not. One has the consider the maintenance fee,
which can be close to what you would pay for rental.
Almost always one can buy for less on secondary market.
On the other hand, you hold a title (to your interval) and some
of these properties do appreciate. It calls for judgment.
I know people who are happy with their interval ownership
and actively swap their location with other owners every year .
http://www.vrivacations.com/
--which is one thing they explain to you in the presentation:
Suddenly, this whole new world of exclusive resorts seem
to be within the reach. And it is, for a price, as in other sectors
of the vacation industry.
As one travel agent put it: ' we are selling dreams'.
Here are links on sales and resales (secondary market)
of timeshares and swaps.
http://directory.google.com/Top/Regional/Europe/Travel_and_Tourism/Lodging/Timeshares/?il=1
The overview of state of the industry
http://www.prefpress.com/search_is_on.htm
With free sample issue offer of the 'review' journal
http://www.prefpress.com/
Some scams - with timeshare resale
http://consumerlawpage.com/brochure/91.shtml
SEARCH TERMS
time share
interval ownership
secondary market
Vacation lodging, timeshare marketing
timeshare, consumer, scam
hedgie
hedgie-ga,
Thanks for the overall view on the industry. I was also after:
"...sites that explain how this operation works in detail. What’s the
psychology behind every step, and how exactly are these prospects
convinced to commit such a large amount of money so quick for
something that doesn’t even seem like a fair deal? The key word here
is 'exactly.'"
So how about how they actually work? I wouldn't know first hand
because I've never been contacted by them. HNMA Funding Company::
sell, distribute, rent, lease, sublicense, time-share, lend or transfer or in thereof or infringement or alleged infringement of copyright, trade mark,
http://www.hnmafunding.com/TermsandConditions/tabid/84/Default.aspxHOME |
Ok markabe ,
You may want to, just for a moment, suspend your conviction that
the
offers are always a terrible deal , in order to appreciate the
positive aspects to which people respond.
You will see that prices are not that high and decisions are not
instant.
The buyer has several days to rescind.
Companies do not publish their sales force training
manuals on the web and
so you may have to triangulate from the arguments on a
typical sales web site, such as
http://www.trendwest.com/own01.html
and other such sites listed in the directory I mentioned above.
Arguments like:
Affordable vacation ownership.
Someone takes care of your vacation home
Even rents it out for you....
and one athentic experience I will describe below.
We were offered a condo on Kauai 10 years ago or $9000.
We did not buy it, as described below. Let's see what if the cost now.
In Princewille, on Kauai in Hawaii we have ,as an example, these
prices:
http://www.timetoshare.com/kauai.htm
$1000 week rental compared with the sale of a $ 9,000 Deeded
property (one week)
Is $9000 sale unreasonable compared to $1000 a week rent?
Let's calculate the ratio full-price/monthly rental
Full cost= $500 0000 ( 52 weeks * $9000)
Monthly rental =$5000
Ratio is 100
Compare this figures with similar ratio of purchase price to rent for
a family house in
the USA. This is usually 100 to 200.
It looks like a fair deal to some people .
It is subjective and condo-fees are often forgoten - since they are
bearable.
There is lot of people who can afford to invest $10,000 but not $500
000.
Now for the nitty gritty. This is how a timeshare presentation
works:
I will describe my experience, exactly. Of course, different
operations differ,
however authentic experience in this case seem preferable to
statistics.
1. You see an ad for something that looks intriguing, perhaps
something you have
been "dreaming" about doing or having.
2.You consult your partner or friend and confess you'd like to
investigate this.
You ask them to come with you and protect you from high pressure sales
people who' ll make you do something you'll regret. Or, maybe you just
say,
"I'd love to be able to vacation in X again every other year." The
person thinks you're
nuts, but ... you finally pursuade them to come.
3. You arrive. You're cautious. Partner/friend is completely
paranoid, which
is the job they signed on for anyway.
4.The sales person has seen this a thousand times before. They have
seen every "type"
in the book. You think you're unique. They don't. You know they're
looking for your
hot buttons. You're playing your cards close to your chest. They
know that. It doesn't
bother them at all.
5. The initial presentation is pretty straightforward, or seems so.
You, of course, ask every
question in the book and so does your partner/spouse. This "screens"
you to see if
you're still interested. In our case, the presentation was before we
saw the property.
In Honolulu, before the flight to the other island.
If you're still game, you get more serious. In our case, we put down
a non-refundable
$100 for a private plane to the next island to see the property and
have lunch.
The plane ride was great, the "lunch" was a hasty sandwich, the
property was lovely
nice beach, beautiful model with view, etc.
6. If you like the property, it sells itself from then on. You find
out about all the "goodies"
-- how you can trade all over the world, etc. If this sounds good,
you are so-o-o-o
tempted. Your partner/friend is not as paranoid as before but it
still thinking there is
a trick.
7. If you have not done your homework before, now is the time to do it
BECAUSE
The sales people will not tell you about secondary market
(obviously).
They will not emphasize the high yearly 'condo fee' you pay every
year,
but they disclose them.
8. They emphasize you can rescind. You sign but you have x days to
think about it.
The usual real estate agent's pitch:
Only few are left. These are unique -- there are no more
beaches/ mountains/
secluded areas/ etc like these any more ...
9. You can't lose. So - you sign on. There is a small deposit.
You sleep on it. The next day your read the ads for the secondary
market in the paper.
You rescind. You reconsider the whole idea. You rescind, cancel.
We got our deposit back, with no trouble.
The company kept the cost of the plane ticket - as they honestly
disclosed
befeorehand they would.
It was not a bad experience. It was first love. I saw Kauai
and I fell in love. But I do not have to own a bit of it, not even
for a week.
And may be it will help me now, ten years later to earn $3. Not bad
at all.
hedgie 1986 ANNUAL REPORT U.S. FEDERAL TRADE COMMISSION WASHINGTON, D.C.::
The Commission continued its strategy of selecting cases to ensure that agency in all investigations of alleged antitrust violations and in the
http://www.ftc.gov/os/annualreports/ar1986.pdfHOME |
hedgie-ga,
How about sites that:
"explain how [timeshare] works in detail"?
In other words, "how exactly are these prospects convinced to commit
such a large amount of money so quick for something that doesn’t even
seem like a fair deal? The key word here is "exactly."
Here is more info on
Timeshare Basics
http://www.timesharexpo.com/timesharebasics.htm
Here is "info -just for salespeople.."
http://www.thetimesharebeat.com/street/nov23-01.htm
Here is info on salesmanship. Please note that it is
an art, not an exact science.
http://www.timesharetraining.com/articles_and_tips.php
On the other side, here is info on 'fair deals' from the 'fair
deal
office'. This is a UK site. In contrast, there is no such office
in the US. People in US say:
"A fair price is what a buyer is willing to pay."
Perhaps there are some cultural differences here. Is there a
method
or an office in Australia to decide what is a fair deal and what
isn't?
www.oft.gov.uk/ .../oft606.pdf
That does not mean there are no regulations. Here, for example
is the US regulation of telemarketing timeshares:
www.hklaw.com/content%5CNewsletters%5CProperty%5C4Property00.pdf
Here is a book by a consumer advocate who says:
" My thanks go out to all the sleazy sewer reeking
timeshare salespersons,lowlife car sales people and bribe taking
corporate loving politicians who have caused me to pursue the
publication of this book. .."
According to this expert,
problems withsome salespersons are not specific to timeshares.
If you need more information, please explain exactly
what you mean by
large amount of money
so quick
( as explained before, Hawaii law specifies a 10 day rescind
period )
a fair deal
hedgie
hedgie,
Those sites you provided on 16 Jun 2003 were excellent.
Your comment about the cooling-off period does intrigue me.
If timeshare has this reputation for being a rip-off (and it does, at
least here in Australia), how come purchasers don't just demand their
money back the next day?
Some of them do.
In the authentic story I related in clarification 2,
you noticed that we asked for our money back.
Not that much because we thought it was a rip-off,
but because we realized that " If we really want to have it,
we can buy it anytime in the secondary market for less."
We got our money deposit back without any hassle.
So? What is the problem?
Some people do not, because they really want to have it,
even after the cooling off period. Either they do not know the
bad reputation, or they do a real analysis and are willing to
change their opinion.
I right now went back and found the same condo we
almost bought for $9000 ten years ago.
It now sells for $9500 in secondary market.
Not a great appreciation perhaps,
but better then some .com stock I bought :-)
Analysis provided in the comment by bjmanly-ga agrees with my
experience and asessment. Perhaps not a greatest investment - but
much improved since the eighties when it aquired bad reputation worldwide.
Things do change. Some people are willing to update their
opinion. Some are not.
Please do notice that most researches like to get a feedback
through rating, particularly when question evolves into an extended
dialog.
hedgie
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Timeshare Strategies and its Alleged Legitimacy