Newbie in need of some help: resale vs. developer purchase differences

miketv · Jun 26, 2008

Can someone clear up the resale vs developer purchase issue. I received the following email from an HGVC agent and i'm not sure if it is accurate. Thanks in advance for your help.

Hilton has the first right of refusal. The listings that you are viewing, once they have an interested buyer, deposit and the contracts are under way, they must contact Hilton. It is at that time we exercise that right. If Hilton buys the property, you could loose your deposit.

Reasons you need to be aware of buying from a third party;

1) Back Maint. fees & taxes ( you will be responsible)
2) Divorce situation (tie up for months)
3) Should have an Attorney to make sure title free & clear
4) Not eligible for the Elite program
5) Can't upgrade with 100% equity
6) Not eligible for ongoing promotions
7) Not a member of club or RCI (must join each at an additional cost)

8)We are a point base program (do you know if points are available at point of purchase)

I as your sales person will always be looking out for your best interest in any new offers and keep you informed on them as well.

You need to do what is right for you.

With the purchase through me at the developer's office, I will always be here for you. And, you will always have piece of mind that you will not have any surprises.

lprstn · Jun 26, 2008

Don't fall for the "best to buy from the developer...crap*!" Some of the points have validity, but when it boils down to price/usage its always best to purchase resale. I also will note that most owners of this type of TS highly support resale purchases only. Most people who decide to purchase from the developer do so for specific reasons and those resorts tend to be Marriotts/Starwood and Disney....

miketv · Jun 26, 2008

Thanks lprstn, I'll keep reading and try to further educate myself on the process.

Bearbacker · Jun 26, 2008

I'd appreciate verification of these as well, as I am also considering a first-time resale purchase.

In addition to bad grammar and spelling (sorry, just a pet peeve), I don't understand a couple of the agent's points.

What does "Can't upgrade with 100% equity" mean?

To what "ongoing promotions" is the agent referring?

What is the "additional cost" of joining the Club or RCI? Is this a one-time charge, or is the agent saying that the annual dues are higher for a resale purchaser?

Blues · Jun 26, 2008

I'll give this a shot.

"Can't upgrade with 100% equity."

If you buy, for example, a $20,000 developer unit, and in the future want to upgrade to a larger unit that costs $30,000, you can trade in your original unit and get the full $20,000 credited. Only useful if you want to compound your error in paying full developer prices by doing it again.

I don't know what "ongoing promotions" he's referring to, but let me assure you. As an owner of, not only a resale, but a resale affiliate, I've never failed to be hounded by the sales agents to attend their presentations, with free gifts, of course, each and every time I've used my points to go to an HGVC.

"Additional cost". If you buy resale, you may be required to pay an additional one-time fee of $399 to join HGVC. After that, you pay the same yearly club fee as everyone else -- $85/year. And that includes the benefit to trade via RCI, same as everyone else.

PigsDad · Jun 26, 2008

I'll just comment inline.

Kurt

miketv said:
Can someone clear up the resale vs developer purchase issue. I received the following email from an HGVC agent and i'm not sure if it is accurate. Thanks in advance for your help.

Hilton has the first right of refusal. The listings that you are viewing, once they have an interested buyer, deposit and the contracts are under way, they must contact Hilton. It is at that time we exercise that right. If Hilton buys the property, you could loose your deposit.

If (and it is certainly not a given) Hilton exercises ROFR, you will get your deposit back.

Reasons you need to be aware of buying from a third party;

1) Back Maint. fees & taxes ( you will be responsible)
BS!

2) Divorce situation (tie up for months)
It does take longer to close, but what a "divorce" has to do with anything totally baffles me.

3) Should have an Attorney to make sure title free & clear
You work with a closing company, and they will take care of the paperwork. You can choose to pay for title insurance if you want -- it is up to you.

4) Not eligible for the Elite program
This is true.

5) Can't upgrade with 100% equity
This may be true, but why would you want to "upgrade" at developer's prices, when you can upgrade buy simply purchasing another resale unit at a fraction of the cost?

6) Not eligible for ongoing promotions
More BS. I have a friend that purchased from the developer, and we get all the same "promotions" (AMEX card, HHonors status, referral deals, etc.)

7) Not a member of club or RCI (must join each at an additional cost)
Partially true. To join "The Club" (which includes access to the RCI trading via HGVC), you must pay a one-time $400 fee. At that point you will be just like any other (non-elite) member. The closing company or broker may take care of that for you (I used Seth -- here on TUG -- and it was taken care of at closing).

8)We are a point base program (do you know if points are available at point of purchase)
Huh? When you purchase resale, the closing company will confirm how many points the property is worth, if you want.

I as your sales person will always be looking out for your best interest in any new offers and keep you informed on them as well.
Even more BS! You will never hear from the salesperson again, except to attempt to sell you more points!

You need to do what is right for you.
And that would be buying resale!

With the purchase through me at the developer's office, I will always be here for you. And, you will always have piece of mind that you will not have any surprises.
Somewhat valid, but if you use a reputable closing company and/or a broker, there should be no issue here.

Bill4728 · Jun 26, 2008

Hilton has the first right of refusal. The listings that you are viewing, once they have an interested buyer, deposit and the contracts are under way, they must contact Hilton. It is at that time we exercise that right. If Hilton buys the property, you could loose your deposit.

First, HGVC does have ROFR, and they do use it, but the level of saving which they will not use it may mean you'll save $10,000-$15,000 off the developer's price. (So they often don't use it unless the price is really low!)

You will get your deposit back, but you may need to add your purchase agreement " my deposit will be returned in-full, if HGVC takes the unit via ROFR"

Bearbacker · Jun 26, 2008

Can anyone point me to where in the documents the ROFR is set out? The Valdoro owner from whom I am considering buying was kind enough to let me have all of his ownership documents to review as I consider making the purchase, including his purchase agreement, the Club rules, the Valdoro Declaration, etc., and unless I missed it, I didn't see any language regarding a ROFR.

I've seen posts here that say there is a ROFR for Valdoro and some that say there is not, so if anyone can tell me where the ROFR language is in their documents, I can hopefully get a definite answer.

Talent312 · Jun 26, 2008

Bearbacker said:
... I've seen posts here that say there is a ROFR for Valdoro and some that say there is not, so if anyone can tell me where the ROFR language is in their documents, I can hopefully get a definite answer.

Valdoro, being a HGVC-owned property likely /has/ a ROFR in one their "declarations" to which the deed says it is subject, or in the sales contract by which your seller obtained his title. I suggest that you contact HGVC and ask to speak to someone in the resale department about getting a "Waiver of ROFR" form. If it applies to Valdoro, they will offer to fax the form to you.

zoobiedo · Jun 27, 2008

I am not aware of Valdoro having a first right of refusal. I highly doubt that they do. It is my understanding that if back maintenance/taxes are owed by the seller you, as the new buyer, will be responsible unless the seller clears it up before the transaction closes. I don't think that is BS because it means you don't have clear title to the property and Valdoro is a deeded property.

benjaminb13 · Jun 27, 2008

HGVC is one of the best resale buys you can get. Compared to other timeshare companies, almost all the perks from buying from a developer are available when you buy HGVC resale.......... all at half the price.
also because with Hilton you dont buy a specific unitthere ex:like (at HYATT you can buy a townhouse style end unit for example)- there is no reason to purchase from a developer.

Probably the only drawback is the length of time it takes to close resale- almost 3 months.

Talent312 · Jun 28, 2008

benjaminb13 said:
... with Hilton you dont buy a specific unit there... the only drawback is the length of time it takes to close resale- almost 3 months.

Actually, you are deeded a specific unit+week. Its just that, you don't get any right of use. Its kept in HGVC inventory (like a deposit) and instead, you get points that, in theory, represent its value.

It doesn't have to take 3 months to close a resale, although some closing companies may do so. For units subject to a ROFR, Hilton will fax a waiver request form, and in most cases, has 30 days from its return to make a decision. That's the fun part, but often, you'll have a decision sooner. Recording and notice to Hilton may take another two weeks. Hilton is usually fairly prompt in sending new-member materials.

Kdudley311 · Jun 28, 2008

Buy Resale! Buy Resale! Buy Resale!

We bought the bottom end package (3,400 bi-annual gold points) from HGVC on the strip last November (paid $11k full tilt price). I have not heard from the salesperson once. Once they hook you, they are on to their next "prey."

They told me they "always" exercise their ROFR and that there WAS a ROFR at Flamingo (both lies). They will basically tell you anything to get you to buy.

I just purchased gold 3.400 annual points for $3,051 at Flamingo ($4560 w/closing costs, reimburse for 2008 maintenance fees, etc.). There is no ROFR. I bought mine off Ebay. I'm not getting title insurance. I just asked the title company closing the sale to provide me with copies of any prior deeds. In my case, it was only the original purchase deed. I can easily compare the property descriptions to ensure they are the same (I'm a paralegal so I'm comfortable with the closing process because I deal with them as part of my employment, but anyone who can read can do it and save $400 for title ins.). Closing was estimated at 60 days. I'm waiting on the waiver of ROFR from HGVC (you have to submit the docs even if they don't have ROFR to get the waiver). Everything is going along smoothly.

BTW, you would have to buy 14,000 points from the developer for Elite status (not worth it in my opinion).

Your closing package would list the unit size (matters for maintenance fees), annual points, resort transfer fee, closing costs, one-time membership fee, etc. It seems like affiliates have a few more problems with borrowing than people that purchased at HGVC resorts from what I have read.

From what I have read on these boards, it appears that Hilton exercises ROFR when it gets below about 40-50% of original purchase price. They probably would have exercised on my purchase, but I specifically bought a resale at Flamingo so I wouldn't have to worry about it. I added to my purchase contract that if they did, my deposit would be fully refunded "just in case."

Please don't get soaked like we did! Thank the salesperson for their time and buy resale! It does take a little longer to close, but if you can't use the points in 2008, you can "rescue" them for $69 to use at a HGVC resort in 2009. You'll save thousands!

benjaminb13 · Jun 28, 2008

Talent312 said:
Actually, you are deeded a specific unit+week. Its just that, you don't get any right of use. Its kept in HGVC inventory (like a deposit) and instead, you get points that, in theory, represent its value.

It doesn't have to take 3 months to close a resale, although some closing companies may do so. For units subject to a ROFR, Hilton will fax a waiver request form, and in most cases, has 30 days from its return to make a decision. That's the fun part, but often, you'll have a decision sooner. Recording and notice to Hilton may take another two weeks. Hilton is usually fairly prompt in sending new-member materials.

sorry, you are right- With you are deeded a specific property but get points instead an actual unit/week to reserve like Hyatt.

Ia sale I had was Rofrd recently by hilton- they transferred everything to their own title company old republic. It took nearly 3.5 months to close this deal.

benjaminb13 · Jun 28, 2008

Keep in mind , it has been difficult to book Hawaii recently - except for Bay Club- .
hopefully this improves
Also check out the other threads re HHV and affiliates-

My suggestion is buy resale where you plan to go.

miketv · Jul 2, 2008

Thanks everyone, I have been away for a few days and was very surprised by the great support on this forum.

Keep up the good work.

coachwp · Jul 3, 2008

I was also their "prey"

We also were "prey." We did the same deal, 3400 biannually for about 10K. Then discovered this website and felt sick after hearing how much cheaper resales are. Anyway, what did you end up doing with your original purchase? Did you just have to keep it along with your new ebay purchase?? I'm also thinking about looking into resale at the same location we originally purchased, International Dr, Orl. Thanks

Kdudley311 said:
We bought the bottom end package (3,400 bi-annual gold points) from HGVC on the strip last November (paid $11k full tilt price). I have not heard from the salesperson once. Once they hook you, they are on to their next "prey."

They told me they "always" exercise their ROFR and that there WAS a ROFR at Flamingo (both lies). They will basically tell you anything to get you to buy.

I just purchased gold 3.400 annual points for $3,051 at Flamingo ($4560 w/closing costs, reimburse for 2008 maintenance fees, etc.). There is no ROFR. I bought mine off Ebay. I'm not getting title insurance. I just asked the title company closing the sale to provide me with copies of any prior deeds. In my case, it was only the original purchase deed. I can easily compare the property descriptions to ensure they are the same (I'm a paralegal so I'm comfortable with the closing process because I deal with them as part of my employment, but anyone who can read can do it and save $400 for title ins.). Closing was estimated at 60 days. I'm waiting on the waiver of ROFR from HGVC (you have to submit the docs even if they don't have ROFR to get the waiver). Everything is going along smoothly.

BTW, you would have to buy 14,000 points from the developer for Elite status (not worth it in my opinion).

Your closing package would list the unit size (matters for maintenance fees), annual points, resort transfer fee, closing costs, one-time membership fee, etc. It seems like affiliates have a few more problems with borrowing than people that purchased at HGVC resorts from what I have read.

From what I have read on these boards, it appears that Hilton exercises ROFR when it gets below about 40-50% of original purchase price. They probably would have exercised on my purchase, but I specifically bought a resale at Flamingo so I wouldn't have to worry about it. I added to my purchase contract that if they did, my deposit would be fully refunded "just in case."

Please don't get soaked like we did! Thank the salesperson for their time and buy resale! It does take a little longer to close, but if you can't use the points in 2008, you can "rescue" them for $69 to use at a HGVC resort in 2009. You'll save thousands!

Newbie in need of some help: resale vs. developer purchase differences

miketv

lprstn

TUG Review Crew: Veteran

miketv

Bearbacker

Blues

TUG Review Crew

PigsDad

Bill4728

Bearbacker

Talent312

TUG Review Crew: Veteran

zoobiedo

benjaminb13

Talent312

TUG Review Crew: Veteran

Kdudley311

benjaminb13

benjaminb13

miketv

coachwp