Emma owns timeshares in DVC and Wyndham and wants to help you get the most out of your timeshares and keep you from losing big on them too.
Timeshares are most frequently sold during timeshare sales presentations at the resort. At most resorts, the average timeshare salesperson will make you feel like you could eat a car salesperson for breakfast if you manage to survive the visit with your wallet still intact.
On my recent trip to Florida, I attended two timeshare presentations in order to get myself some free tickets to SeaWorld and Universal Studios. Both were advertised as a 90 minute and 120 minute presentation respectively, but I did not manage to get myself out the door in under three hours. Now partly, that is because I like to argue, but mostly it is because the entire process is designed to wear you down.
By the time you leave the presentation, you will have spoken to three different people:
- The Sales Person - he or she will be with you most of the presentation, acting like your best friend
- The Manager - once you've said no enough times, the salesperson will hand you off to the manager who will make another pitch with a better price. Often it will be significantly better. The last presentation I went on the price came down more than $20K after it was explained to the manager that I owned two timeshares already and had bought one of them at resale. But I could still do better on Ebay, I think, and didn't care for the resort much, so I turned it down.
- The Closer - if you still say no, even after the manager comes out to make you an offer, you may meet another person at some of the larger resorts. The closer will usually offer you a discounted vacation at that resort. If it's a very good price (negotiate, it can be better) and you like the resort, and don't mind having to go on yet another presentation, then take it. Otherwise turn it down. If you do take it, do not accept the first price asked. Make a counter-offer.
Timeshares and the Law
- Timeshare Resale Fraud
The Attorney General's page on Timeshare fraud in Florida and what you can do if you get stung.
- Buying and Selling Timeshares & Vacation Plans
The FTC's faq page on buying and selling timeshares.
I don't generally think that timeshare presentation are a scam, but they can be tricky to navigate. While fraud used to be pretty common in the industry, particularly in Florida, it has cleaned up its act considerably over the years, thanks to strong consumer protection laws and the entrance of larger corporate players (Marriott, Hilton, Disney) into the marketplace.
However, timeshare sales people are still prone to making misleading statements. The biggest misleading statement, and the one that particularly bugs me, usually has to do with the resale value of the timeshare. They almost always claim that if you decide in the future to sell your timeshare, you'll get your money back. Some even suggest that you will make a profit.
But the real truth is that you will never make your money back and you certainly won't make a profit. While 50% may be an average loss of price, timeshares can lose as much as 90% of their "value" after the closing.
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The problem is that the developer always charges far more than the real value of the timeshare because he needs to make up for the cost of all those timeshare presentations, the marketing they do to get people into the presentation, and the gifts they give away. There are finder's fees (paid to those who solicit you at various tourist bureaus, etc.), commissions, and general staffing that are also part of the equation.
And on the other side of the deal, there's no protection of the value. Very few timeshare companies make first right of refusal on resales a part of their contract and the few companies that do often don't exercise it. Disney Vacation Club, Marriott, and Hilton are a few of the companies that exercise ROFR (right of first refusal)regularly and aggressively, but you should still be able to buy one at about a 20% discount off developer's prices. Much lower than that though, and they will usually just buy it out from under you and turn it around and sell it at full price.
If you do decide to go to a timeshare presentation because you want to collect some gifts, then here are some tips to keep in mind.
- Leave your checkbook at home - I would tell you to leave all your credit cards at home too, but usually you are required to bring a major credit card to the presentation with you and show it before being allowed to enter the presentation. If you really don't trust yourself, then bring a card on which you are carrying a balance very close to your limit :)
- Be wary of the prizes and gifts. This tip comes into play before you agree to go to the presentation. It is usually not even worth the hassle of attending unless the gift is FREE. This means you should not be paying shipping & handling for anything, because I can guarantee that the value of your gift will be no more than the actual s&h on it.
- Negotiate the gifts before you go. You will be spending between 2-4 hours at a high pressure sales event so make sure you are getting something that has actual value in return. And if you hold out, they usually will make a better offer just to get you in the door. Don't even bother if they are offering things like cameras or luggage. You want cash, free (or heavily discounted) vacations and/or tickets to theme parks. Most of the time you will need to pay a $20 deposit to reserve your presentation, but that's designed to deal with "no shows" and you'll get it back after it is over.
- Don't engage. The more you talk, the longer your presentation is going to be. Just sit and listen. It is normally best not to ask any questions.
- Don't fall for the leading questions, such as "wouldn't you rather vacation at a condo than a hotel?" Actually, you love hotels because you love room service, turndown service and daily housekeeping. Timeshares offer none of those.
- Don't even bother to bring up resales unless you are willing to bring proof with you. Here's a hot tip though -- if you do print out completed auctions of their resorts and show them off early in the presentation, you will frequently find yourself on the way out the door with gifts in hand in under a half hour, especially if their $35,000 resort only sells for $3,500 on Ebay. Heh.
How to Rescind the Timeshare Purchase
Okay, so you went to the timeshare presentation, fell in love with the resort, the timeshare salesperson acted like your best friend, showed you all the different vacations you could enjoy all over the world and made you an offer that you couldn't refuse.
But now you are home and feeling a bit sick with buyer's remorse, especially since you decided to take a look at eBay. Well, it is not too late. Thankfully, there are strong consumer protection laws in every state that guarantee a "cooling off" period for timeshare purchases. Depending on your state you will have 3-15 days to rescind (get out off) your contract and get your deposit money back. It is very important to read your contract paperwork carefully as the information on how to rescind will be contained within it.
Since the process is somewhat involved and needs to be followed step by step, it's important not to panic or just give up. Just get to work on following the steps required. I've put a hub together on How to Rescind a Timeshare Contract as well that will give you an idea of what you need to do, but the contract itself needs to be followed. Just make sure that you act now because once the cooling off period is over, you're stuck with it and might as well just start enjoying your vacations.
3 Steps to Cancel Your Timeshare Contract
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