The Timeshare industry is broken - action is required

[jabberwocky]

I like to use the example that everyone can relate to....since most people know at least one person/family etc who refuses to buy anything but a brand new car despite knowing full well of the availability of used cars etc.

for some the moniker "used" will always denote a lesser quality or somehow worth less than new...even if it has absolutely no reference whatsoever to timeshares. Add on top of that the fact that so many timeshares are literally given away for nothing (or next to nothing)...it just reinforces the idea in their head that resale/used isnt the same thing!

after all, everyone would be skeptical of a $1 price tag on a perfectly good looking car!

Respectfully I don't think the comparison to used cars is helpful or accurate. Used cars are subject to the "lemons" problem in that the seller of the vehicle knows about potential problems with the vehicle that aren't disclosed, as a result buyers discount the average price they pay for a used vehicle to protect themselves against such lemons. With timeshares there is (mostly) no difference between the week whether it is sold by the developer or on the resale market - this is not the case with cars.

While I agree that the term "used" degrades the psychology around any object, IMO comparing timeshares to used cars simply perpetuates the problem.

 

[theo]

At least Wyndham is offering deed back when the timeshare is free and clear. If all large timeshare resort systems do this, this will save a large number of timeshare owners from the stress of disposing their timeshare when they no longer want them. They gained my respect for taking this lead in the industry.

Let us consider and acknowledge that Wyndham "cherry picks" what they will actually accept back under their "Ovation" program.
Essentially, they may take back (for free) that which they think they might be able to "turn around" again later (at full retail pricing).
Ovation is innovative, but it's more self-serving than altruistic. Then again, at least it provides an easy exit for some Wyndham owners.

A program like Wyndham's "Ovation", which enables and facilitates recovery of inventory (for free) to then resell all over again (at full retail pricing) requires the deep corporate pockets and internal sales force that "chains" like Wyndham already possess. Such practices are not a realistic or viable option (or even a remote possibility) for the many small, independent resorts having no such deep corporate pockets or internal sales force available.

We enjoy our timeshares, but there is certainly merit in the OP's characterization of the industry as "broken". Developer practices certainly won't be altered by any consumer "campaigns". ARDA will continue to ignore and / or deny the existence of (...never mind support) the resale timeshare market. ARDA "supported" legislators certainly have little or no interest in even touching (...never mind correcting) what is basically a consumer luxury.

People who choose to educate themselves before buying (hopefully resale) will do so. Those who don't / won't bother to educate themselves before "buying in" will continue to file in to presentations, sign on the dotted line for big bucks and keep the Wyndhams and Westgates and Diamonds thriving and profiting, discovering only later that their "acquisition" may very well be nearly (maybe even literally) completely worthless in the resale market.
Realistically, how can these unfortunate facts and practices be altered? Certainly not by magic beans, "campaigning" --- or by wishful thinking.

In an ideal world, each and every developer sales contract would be required to be accompanied by a separate, stand alone, single page document (requiring separate buyer signature), overtly indicating buyer's clear understanding and acknowledgement that the "product" being purchased may have little or no monetary or resale demand or value immediately after contract execution --- and that the ONLY inherent "value" may actually lie in the buyer's own personal enjoyment and use of the purchased "product".

Unfortunately, I didn't wake up in that ideal world this morning, nor do I ever expect to do so at any time in the foreseeable future. YMMV.

 

[TUGBrian]

Respectfully I don't think the comparison to used cars is helpful or accurate. Used cars are subject to the "lemons" problem in that the seller of the vehicle knows about potential problems with the vehicle that aren't disclosed, as a result buyers discount the average price they pay for a used vehicle to protect themselves against such lemons. With timeshares there is (mostly) no difference between the week whether it is sold by the developer or on the resale market - this is not the case with cars.

While I agree that the term "used" degrades the psychology around any object, IMO comparing timeshares to used cars simply perpetuates the problem.

I generally dont like to compare timeshares to used cars directly...but the concept here is still accurate in terms of the way people feel about new compared to "used"...even if there is no such thing as a "used" timeshare.

no matter what the product is, if it is perceived to have value...most consumers are going to be skeptical with a similar product offered for 99% less.

 

[WalnutBaron]

absolutely most owners "just pay it"....id even go so far as to say there is a huge % of owners who dont even know they are paying it in the first place and simply assume its just another cost of ownership vs an "optional" donation.

id bet the vast majority of owners would NOT check the box deliberately to pay it if it were not already done so for them.

I completely agree. Few owners take the time to actually review the particulars of their annual MF invoice--including the optional ARDA contribution. This is true of most timeshare owners, with the notable exception, of course, of TUG members

 

[ronparise]

I would have thought that the timeshare model would have died with the rise of the internet where one can research a major purchase in a matter of minutes. I mean just google "Marriott Timeshare" or "Wyndham timeshres" or just "timeshares" and some of the first hits you get are from those resale companies

or just do the math
1 week = $20000
50 weeks = 1,000,000

Does anybody think the condo they are buying into is worth a million bucks

or figure out what your vacation accommodations are going to cost over the next 10 years
purchase price = $20000/10= $2000/year for ten years plus MF of $1000 per year .
so for ten years your weeks vacation accommodation will cost $3000

This level of research can be done sitting in the sales room, but enough folks dont do it that Wyndham and the others can do quite well

I spend more time researching a $100 pair of new shoes than most timeshare buyers spend researching their $20000 purchase. That makes no sense to me and I dont think education will change a thing. As PT Barnum is rumored to have said "Theres a sucker born every minute"

Please dont think Im being critical> I just walked right by a used car lot with row upon row of very fine late model used cars priced between $15000 and $20000 that would probably last me the rest of my life (or at least until my daughter takes away my license) to lease a $35000 new car. Over the next 3 years Ill pay over $20, 000 and at the end of 3 years I wont own a thing (kinda like a timeshare) and 2 years ago I bought a boat, I spent over $50000 for it and I pay $25000 a year to keep it docked and maintained. I use it in lieu of a second home for less than 3 months a year. How stupid is that. I know that a boat is a hole in the water that you throw money into, and I do it willingly (again, kinda like a timeshare)

Some things we do, defy logic, and the timeshare industry is built on that fact. Its not broken. Its working just fine... Take a look at what Wyndhams stock has done over the last several years. They sell to our emotions not our logic.. and there isnt any law against doing that

 

[Swegnson]

"At least Wyndham is offering deed back when the timeshare is free and clear. If all large timeshare resort systems do this, this will save a large number of timeshare owners from the stress of disposing their timeshare when they no longer want them. They gained my respect for taking this lead in the industry."

Can you expand on this statement? I can't imagine this is an open offer.

 

[TUGBrian]

"At least Wyndham is offering deed back when the timeshare is free and clear. If all large timeshare resort systems do this, this will save a large number of timeshare owners from the stress of disposing their timeshare when they no longer want them. They gained my respect for taking this lead in the industry."

Can you expand on this statement? I can't imagine this is an open offer.

it absolutely is, the wyndham ovation program has been in existence for quite some time. there is a sticky post discussing all the details in the Wyndham TUG forum down below.

 

[dioxide45]

At least Wyndham is offering deed back when the timeshare is free and clear. If all large timeshare resort systems do this, this will save a large number of timeshare owners from the stress of disposing their timeshare when they no longer want them. They gained my respect for taking this lead in the industry.

Wouldn't it be better though if they allowed deed backs even when there was an outstanding balance on the timeshare loan? They have already made profit on the deal, especially a financed deal where the owner is say seven years in on a 10 year mortgage. To make the owner pay off and have it free and clear and then just give it back is like robbery. How can we praise big companies that take something back from you for free and turn around and sell it for big bucks, AFTER the first owner already bought it once. There are very few products out there that can be sold multiple times for more money each successive time. Timeshare is apparently one of them. This is different from a car lease, with a lease you are paying for the depreciation, and then some more. When a developer takes back a 100% depreciated timeshare in a deed-back, they sell it like there was 0% depreciation. Not like a used car. The only thing deed-backs are good for is the developers and stopping scammers. They don't really help owners since if the timeshare really had as much value as the developer will resell it for, shouldn't the owner get something for it when they deed it back to the developer?

 

[ronparise]

Wouldn't it be better though if they allowed deed backs even when there was an outstanding balance on the timeshare loan? They have already made profit on the deal, especially a financed deal where the owner is say seven years in on a 10 year mortgage. To make the owner pay off and have it free and clear and then just give it back is like robbery. How can we praise big companies that take something back from you for free and turn around and sell it for big bucks, AFTER the first owner already bought it once. There are very few products out there that can be sold multiple times for more money each successive time. Timeshare is apparently one of them. This is different from a car lease, with a lease you are paying for the depreciation, and then some more. When a developer takes back a 100% depreciated timeshare in a deed-back, they sell it like there was 0% depreciation. Not like a used car. The only thing deed-backs are good for is the developers and stopping scammers. They don't really help owners since if the timeshare really had as much value as the developer will resell it for, shouldn't the owner get something for it when they deed it back to the developer?

should but dont... still better than most other developers

give them time. once they pick off the low hanging fruit, they will begin to pay what they have to to keep the sales department supplied with product.. at least thats my best guess

 

[bogey21]

Sure, the industry is broken for the uninformed. For those who spend the time to understand the alternatives and their own needs it works pretty well. But it takes work and a mistake or two along the way to maximize the benefits.

George

 

[SueDonJ]

it absolutely is, the wyndham ovation program has been in existence for quite some time. there is a sticky post discussing all the details in the Wyndham TUG forum down below.

Marriott also may take back but it's more likely that they'll broker for resale, unwanted Weeks that are free and clear. Granted, they're selective in what they choose to take back/broker and the inventory that they accepted yesterday might not be the same as today's or tomorrow's, but if/when they accept inventory the owners generally get a better return from Marriott than they would on the external resale market.

See this TUG thread: Marriott BUYBACKS AND TAKEBACKS [2012 / Ongoing]

Weeks Owners, this info with contact information is from the "Sell Weeks" page of Marriott Vacation Club Resales:

Special Benefits of Selling Your Timeshare Here

• A Marriott Vacation Club representative is ready to discuss your viable resale options.*
• No up-front fees.
• Brokerage commission is not due until the time of closing.
• Marriott Resorts Hospitality Corporation, or its affiliates, will market and sell your week to consumers seeking resales.
• Purchasers of eligible inventory will have the ability to trade their timeshare for Marriott Rewards® points.
• Your resales transaction will be managed from contract through closing with personalized service.

Please call 866-682-4547 to speak with a Marriott Vacation Club professional Monday-Thursday, 9 a.m.-5 p.m. ET and 10 a.m.-5 p.m. ET, on Friday.

(Because it gets asked every time this is discussed, no, Marriott is not currently buying back or brokering unwanted Destination Club Trust Points.)

 

[SueDonJ]

should but dont... still better than most other developers

give them time. once they pick off the low hanging fruit, they will begin to pay what they have to to keep the sales department supplied with product.. at least thats my best guess

In theory that's how it should work but you have to take into consideration whether they're also supplying the Sales Dept with inventory acquired in other ways. For example, Marriott is currently taking back pretty much only inventory that their Resales Operations staff are brokering, bundling these resale Weeks with Trust Points to give buyers a less-expensive inroad into the Destination Club program. That's because instead of stocking the DC Trust with only existing Weeks in order to fuel sales, they're working with third party investors who buy inventory at existing hotels, refurb it to timeshare units and then sell those to Marriott. Marriott then conveys that inventory to the DC Trust to fuel sales of the DC Points. They have also been actively completing build-outs at the resorts which were only partially completed when the economy tanked, and that inventory is not being sold as Weeks but instead is also being conveyed to the Trust to fuel Points sales.

Convoluted, I know, and maybe too much information to make the point, which is that take-backs are not the only source for Marriott at least to fuel the sales machine (and I would expect they won't ever be.)

 

[ronparise]

Deed backs are not the only supply for Wyndham either and they do the same thing as you describe for Marriott. Wyndham dosent build anything new. Their most recent new project is a combo hotel timeshare property in Clearwater fl. An investor built the place and Wyndham is selling the timeshares and taking delivery Lu on a "just in time" basis. I.e. Pay the developer for a few units, sell them and then do it again. They never have much corporate money tied up. Compare that with their Bonnet Creek property whare they bought the land, installed infrastructure, built buildings and furnished them all with corporate money, all before they sold the first points.

Bottom line is that the developers are getting inventory to sell from multiple sources at as low a cost of goods sold as they can. Deed backs and foreclosures are only a piece of the pie

 

[rboesl]

I was really excited when I first saw this topic title. I was hoping I'd see so suggestions on how to "fix the system." Sigh. I didn't see that. But there are a couple of interesting nuggets. Early on there was a comparison to the used car industry by Brian, but that turned out to be a negative comment. Later on dioxide45 mentioned no MLS mostly because there's not enough money.

In my mind there's a few things that have contributed to this "broken system."

First, we as owners willing to let go of our timeshares next to nothing or nothing but expense to cover transfer of ownership. Not taking into consideration, like a used car, there actually be some residual value in that property.

Second, the fact that developers are allowed to take properties back into inventory by giving the owner an out on maintenance fees and then re-selling at developer pricing levels. THAT is borderline fraud.

And, last, the concept there's no money in re-sale to justify an industry due to reduced re-sale prices. If that were true there's be no used car sales. But there's certainly enough money to be made there despite lower sales prices. Had we, as owners, not gone along with the first item I listed there would be a business opportunity for timeshare re-sale that could be profitable.

Until we as current owners insist there is residual value in what we own. This situation won't change. In some situations these timeshares should have increased in value as the popularity of the location where we own has increased.

 

[ronparise]

I was really excited when I first saw this topic title. I was hoping I'd see so suggestions on how to "fix the system." Sigh. I didn't see that. But there are a couple of interesting nuggets. Early on there was a comparison to the used car industry by Brian, but that turned out to be a negative comment. Later on dioxide45 mentioned no MLS mostly because there's not enough money.

In my mind there's a few things that have contributed to this "broken system."

First, we as owners willing to let go of our timeshares next to nothing or nothing but expense to cover transfer of ownership. Not taking into consideration, like a used car, there actually be some residual value in that property.

Second, the fact that developers are allowed to take properties back into inventory by giving the owner an out on maintenance fees and then re-selling at developer pricing levels. THAT is borderline fraud.

And, last, the concept there's no money in re-sale to justify an industry due to reduced re-sale prices. If that were true there's be no used car sales. But there's certainly enough money to be made there despite lower sales prices. Had we, as owners, not gone along with the first item I listed there would be a business opportunity for timeshare re-sale that could be profitable.

Until we as current owners insist there is residual value in what we own. This situation won't change. In some situations these timeshares should have increased in value as the popularity of the location where we own has increased.

Nobody just lets an asset go for next to nothing because they want to. They let it go for next to nothing because that's what it's worth. As someone said in a post above this stuff isn't "bought" it's sold. And since most of us don't have a marketing department and a staff of high paid commissioned salesmen and since most of us aren't willing to lie to our prospective buyers to make a sale we have to find someone that wants to buy it. And remember in a free market, sellers don't determine value buyers do. You can only get what a buyer is willing to pay you.


So speaking as someone with some experience buying timeshare and as someone who sees opportunity in the timeshare resale market; how do I value timeshares? I compare a timeshare to the value of other comparable vacation properties. If the maintenance fees for timeshare I'm looking at is more than what a comparable vacation rental rents for, than that timeshare is worthless. On the other hand if the maintenance fees are less than comparable vacation rentals than that timeshare has value. How much value depends on how much less the maintenance fees are

If the system is broken it's not the resale side of things that broken it's the developer side. The problem isn't that the resale value of timeshares is so low, it's that the developer price is so high and as I said above, there's a sucker born every minute

 

[LannyPC]

If the maintenance fees for timeshare I'm looking at is more than what a comparable vacation rental rents for, than that timeshare is worthless. On the other hand if the maintenance fees are less than comparable vacation rentals than that timeshare has value. How much value depends on how much less the maintenance fees are.

Bingo! With that statement in mind, the problem is that the vast majority of weeks or intervals cannot garner enough rent to cover the MFs. That's why the vast majority of weeks/intervals are considered worthless and can barely be given away.

 

[ronparise]

Bingo! With that statement in mind, the problem is that the vast majority of weeks or intervals cannot garner enough rent to cover the MFs. That's why the vast majority of weeks/intervals are considered worthless and can barely be given away.

I look at it from the perspective of someone that rents. I.e. What's it cost me and what can I get for it. But my valuation method works for the guy that's only looking for a week or two for family vacations. If a house or condo on VRBO or airb&b or Craigslist costs less to rent than maintenance fees on a timeshare why would our guy pay anything for that timeshare

So for my money event weeks or holiday weeks are worth paying for but anything else, not so much

 

[Resort Guy]

Wouldn't it be better though if they allowed deed backs even when there was an outstanding balance on the timeshare loan? They have already made profit on the deal, especially a financed deal where the owner is say seven years in on a 10 year mortgage. To make the owner pay off and have it free and clear and then just give it back is like robbery. How can we praise big companies that take something back from you for free and turn around and sell it for big bucks, AFTER the first owner already bought it once. There are very few products out there that can be sold multiple times for more money each successive time. Timeshare is apparently one of them. This is different from a car lease, with a lease you are paying for the depreciation, and then some more. When a developer takes back a 100% depreciated timeshare in a deed-back, they sell it like there was 0% depreciation. Not like a used car. The only thing deed-backs are good for is the developers and stopping scammers. They don't really help owners since if the timeshare really had as much value as the developer will resell it for, shouldn't the owner get something for it when they deed it back to the developer?

I am glad the deed back question has been brought up and I would appreciate your ideas of how a deed back program "should" be structured. I manage a small HOA operated resort and our deed back program has been developed to benefit our owners; both those who are seeking a way "out" of their ownership after many happy years of use and also to benefit those current owners who bear the financial burden of paying for costly recovery of non-paying weeks. The thought of this being some sort of "fraud" or "robbery" that some in this forum have stated truly shocks me. Granted we're not a large corporation or developer, but our deed back program offers owners a way to transfer their intervals back to the HOA (the collective ownership-not developer) and it has virtually eliminated the transfer of our intervals to the true scammers out there who charge thousands of dollars to place these weeks into abandoned LLC's that the HOA (aka current dues paying owners) will eventually have to recover and clear title to. In addition, the owner is no longer responsible for paying the annual fees that they agreed to when they purchased the interval week.

For a modest transfer fee our owners are able to exit their commitment legitimately without damage to their finances or to the HOA. Overwhelmingly, these owners have had many great years of use, but they can no longer travel and either there isn't a strong enough resale market to resell quickly or , more often, they haven't tried to sell it with any true effort. Most often, they're older and have significant life changes (illness, death, fixed budget in retirement) that have forced them to seek a way out of their ownership immediately. The deed back is a reasonable exit strategy for both parties.

Let's be clear. The HOA takes a financial hit on every deed back and there is no quick turnaround resale that some have implied. First and foremost, the HOA has budgeted for maintenance fee income from that interval that is not paid. Secondly, we incur transfer costs, marketing costs, etc..... You seem to imply that we should be paying owners "something for it when they deed it back', but any funds would have to come from the rest of the current dues paying owners in the form of increased maintenance fees. Would you like to pay for your neighbor to deed their week back?

We've tried to strike a reasonable balance between offering the individual owner an exit strategy while also maintaining our duty of proper fiscal management to the rest of our current dues paying owners. I would sincerely like to hear anyone's ideas of how to improve this policy.

 

[ronparise]

I am glad the deed back question has been brought up and I would appreciate your ideas of how a deed back program "should" be structured. I manage a small HOA operated resort and our deed back program has been developed to benefit our owners; both those who are seeking a way "out" of their ownership after many happy years of use and also to benefit those current owners who bear the financial burden of paying for costly recovery of non-paying weeks. The thought of this being some sort of "fraud" or "robbery" that some in this forum have stated truly shocks me. Granted we're not a large corporation or developer, but our deed back program offers owners a way to transfer their intervals back to the HOA (the collective ownership-not developer) and it has virtually eliminated the transfer of our intervals to the true scammers out there who charge thousands of dollars to place these weeks into abandoned LLC's that the HOA (aka current dues paying owners) will eventually have to recover and clear title to. In addition, the owner is no longer responsible for paying the annual fees that they agreed to when they purchased the interval week.

For a modest transfer fee our owners are able to exit their commitment legitimately without damage to their finances or to the HOA. Overwhelmingly, these owners have had many great years of use, but they can no longer travel and either there isn't a strong enough resale market to resell quickly or , more often, they haven't tried to sell it with any true effort. Most often, they're older and have significant life changes (illness, death, fixed budget in retirement) that have forced them to seek a way out of their ownership immediately. The deed back is a reasonable exit strategy for both parties.

Let's be clear. The HOA takes a financial hit on every deed back and there is no quick turnaround resale that some have implied. First and foremost, the HOA has budgeted for maintenance fee income from that interval that is not paid. Secondly, we incur transfer costs, marketing costs, etc..... You seem to imply that we should be paying owners "something for it when they deed it back', but any funds would have to come from the rest of the current dues paying owners in the form of increased maintenance fees. Would you like to pay for your neighbor to deed their week back?

We've tried to strike a reasonable balance between offering the individual owner an exit strategy while also maintaining our duty of proper fiscal management to the rest of our current dues paying owners. I would sincerely like to hear anyone's ideas of how to improve this policy.

I think robsel, when he used the word fraud, was talking about what Wyndham does.. They take it back for nothing then are able to sell it for big bucks. Thats significantly different that what you and your HOA is doing; accepting deed backs when you dont have a ready market to resell it

Wyndham should probably be paying market value, or perhaps as much as what their average cost of goods sold is (about $30/1000 points) But in your case market value seems to be less than zero. That you are paying more than that with no ready means of re selling. seems to me to be a fair balance between doing right by your owners that need to get out and doing right by your owners that are sticking with you

My only suggestion for you and your hoa would be to find a way to make your resort worth more than zero to potential buyers.

 

[T_R_Oglodyte]

You can lead a horse to water but you cannot make him drink. I have had people think I am crazy for suggesting resale. They thought it was too good to be legit or inferior.

More appropriately, you can lead a man to data but you can't make him think.

 

[theo]

I am glad the deed back question has been brought up and I would appreciate your ideas of how a deed back program "should" be structured. I manage a small HOA operated resort and our deed back program has been developed to benefit our owners; both those who are seeking a way "out" of their ownership after many happy years of use and also to benefit those current owners who bear the financial burden of paying for costly recovery of non-paying weeks. The thought of this being some sort of "fraud" or "robbery" that some in this forum have stated truly shocks me. Granted we're not a large corporation or developer, but our deed back program offers owners a way to transfer their intervals back to the HOA (the collective ownership-not developer) and it has virtually eliminated the transfer of our intervals to the true scammers out there who charge thousands of dollars to place these weeks into abandoned LLC's that the HOA (aka current dues paying owners) will eventually have to recover and clear title to. In addition, the owner is no longer responsible for paying the annual fees that they agreed to when they purchased the interval week.

For a modest transfer fee our owners are able to exit their commitment legitimately without damage to their finances or to the HOA. Overwhelmingly, these owners have had many great years of use, but they can no longer travel and either there isn't a strong enough resale market to resell quickly or , more often, they haven't tried to sell it with any true effort. Most often, they're older and have significant life changes (illness, death, fixed budget in retirement) that have forced them to seek a way out of their ownership immediately. The deed back is a reasonable exit strategy for both parties.

Let's be clear. The HOA takes a financial hit on every deed back and there is no quick turnaround resale that some have implied. First and foremost, the HOA has budgeted for maintenance fee income from that interval that is not paid. Secondly, we incur transfer costs, marketing costs, etc..... You seem to imply that we should be paying owners "something for it when they deed it back', but any funds would have to come from the rest of the current dues paying owners in the form of increased maintenance fees. Would you like to pay for your neighbor to deed their week back?

We've tried to strike a reasonable balance between offering the individual owner an exit strategy while also maintaining our duty of proper fiscal management to the rest of our current dues paying owners. I would sincerely like to hear anyone's ideas of how to improve this policy.

It seems that yours is a program which reflects thoughtful consideration --- good on 'ya!

I personally do not believe that a HOA at any small independent resort should for one moment consider paying out a penny if / when voluntarily taking on the risk (...and yes, it is most certainly a risk) of accepting deedbacks from "bailing" owners. On the contrary, in specific reference to your unspecified "modest transfer fee", it is my own personal belief that at least two years' worth of maintenance fees (maybe even three) should be required and collected upfront from any owner seeking to "deedback" (i.e., abandon) their ownership, as a clear and non-negotiable condition of "deedback" acceptance by the HOA. This requirement helps to keep overall resort finances on an even keel, without creating additional burden on all the other remaining owners while that now abandoned interval is being marketed for resale. Even with that mandatory out of pocket, upfront expense to effect "deedback", the bailing owner will still be paying less than they would have to pay any questionable upfront fee PCC, sleazy Viking Ship, or any other dubious "exit / escape" operation. Offering a legitimate yet less expensive choice besides those other shady alternatives certainly seems like a winner to me. Anyone abandoning their ownership needs to clearly understand and accept that their "bailing out" creates negative consequences on the resort finances. There is no free lunch; Exit Avenue must be a two way street.

I also think that any resort accepting deedbacks needs to have an accompanying, active resale strategy and program of some sort, without which the resort is essentially leaving finding new owners to chance and hope, which is neither a plan nor a strategy. Some smaller resorts have an internal resale avenue available through their associated management company (not so for VRI, which I otherwise like and respect as a timeshare management company). Other small facilities have a manager with a real estate license; he or she is on site most every day anyhow and can promote resales when opportunities arise. Others have a local realtor familiar with timeshares on site one or two days a week for a few hours; this is mostly ineffective in my observation and experience, presumably because the realtors want a 35% or a minimum dollar figure commission (whichever is higher), thereby greatly inflating prices. Relying solely upon listing HOA-owned weeks in periodic newsletters or on the owner section of the resort web site is obviously too limited and, although "free", is not very productive in "moving" many resales.

Those are my thoughts, for whatever they may be worth --- and we choose to own only at small independent, non "chain" resorts.

 

[TUGBrian]

wasnt that long ago that deedbacks werent even a twinkle in ANY hoa/developers eye....thus feeding owners to the scammers/sharks who preyed on them and their money with impunity.

we have been saying for years that the industry needs to wake up and provide solutions for owners who want out. Even a moderately bad solution is better than no solution at all!

 

[vacationhopeful]

My VRI resort has an onsite realtor 3 short days a week ... and yes, they get a hefty commission. They maintain a simple website listing of Weeks with unit number, size and asking price with an overly simple view category. And I believe, there is a 25% commission ... but most asking prices are between $2,500 and $9,000 ... and it is clear, what are HIGH season weeks ... few are listed and prices are higher.

 

[ronparise]

wasnt that long ago that deedbacks werent even a twinkle in ANY hoa/developers eye....thus feeding owners to the scammers/sharks who preyed on them and their money with impunity.

we have been saying for years that the industry needs to wake up and provide solutions for owners who want out. Even a moderately bad solution is better than no solution at all!

Exactly right, don't make perfect the enemy of the good

 

[ronparise]

It seems that yours is a program which reflects thoughtful consideration --- good on 'ya!

I personally do not believe that a HOA at any small independent resort should for one moment consider paying out a penny if / when voluntarily taking on the risk (...and yes, it is most certainly a risk) of accepting deedbacks from "bailing" owners. On the contrary, in specific reference to your unspecified "modest transfer fee", it is my own personal belief that at least one years' worth of maintenance fees (and probably two years, maybe even three) should be required and collected upfront from any owner seeking to deedback their ownership, as a clear and non-negotiable condition of deedback acceptance by the HOA. This requirement helps to keep overall resort finances on an even keel without creating additional burden on all the other remaining owners while the now "abandoned" interval is being marketed for resale. Even with that mandatory out of pocket, upfront expense to effect "deedback", the "bailing" owner will still be paying less than they would have to pay to any questionable upfront fee PCC, sleazy Viking Ship, or any other dubious "exit specialist" operation. Offering a legitimate yet less expensive option other than those shady alternatives seems like a winner to me. A "bailing" owner needs to understand and accept that their "bailing out" creates negative consequences on the resort finances. There is no free lunch; Exit Avenue should and must be a two way street.

I also think that any resort accepting deedbacks needs to have an accompanying, active resale strategy and program of some sort, without which the resort is essentially leaving identification of new ownership to hope and wishful thinking (... a bad "plan"). Some smaller places have an internal resale component available within their associated management company (VRI, which I otherwise like and respect as a management company, does not). Other small facilities have a manager with a real estate license and he or she is there on site most every day. Others have a local realtor on site one or two days a week for a few hours (a much less effective approach, in my observation and experience, particularly when they want a minimum 25% commission). Merely relying upon listing HOA-owned weeks within periodic newsletters or on the owner section of a resort web site is of course much too limited exposure and is a mostly unproductive exercise in futility (IMnsHO).

Those are my thoughts, for whatever they may be worth --- and we own only at small independent, non "chain" resorts.

In an ideal world I'd say you are right, no hoa should be forced to do anything, but unfortunately the world of the independent resorts is far from ideal. Oftentimes they are faced with just 4 choices. Either take it back willingly, take it back through foreclosure, watch it sail off in a Viking ship or let the owner default and remain in default forever

And having a sales dept doesn't work if what you are selling has no value

In my perfect world all timeshares would be worth at least a buck, then the hoas wouldn't have to worry about being the buyer of last resort