It’s hard to walk around any resort community without meeting them: Overly friendly people offering free or deeply discounted stuff, from glass-bottom boat rides and Jeep rentals to fancy dinners and show tickets.
Ninety minutes of your time is all they want. It won’t cost you a thing. That’s a promise!
They’re pitching vacation time share deals, and they must be very good at what they do since they sell $10 billion worth per year in the United States. In 2006, nearly 538,000 time share “intervals” were sold for an average price of $18,502, and the industry continues to grow.
About 4.4 million U.S. households own one or more time shares, but many of them had no intention of buying before attending a sales presentation. They simply went for the freebies.
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“I was just going to go up and get the goodies but not buy,” said Ray Dahlgren of Modesto, recalling his first visit to a Squaw Valley time share resort about five years ago.
“I ended up buying what I thought was a good deal,” Dahlgren said. “They just talk, talk, talk until you buy. If you’re weak at all, they’ll get you.”
Dahlgren spent $7,000 for the rights to use a studio condo near Lake Tahoe, but it wasn’t until later that he realized he could book it only one week every other year. He’s never used it, and he hasn’t been able to sell it.
Worst of all, Dahlgren borrowed money to pay for it. “I’m getting charged an outrageous interest rate, like 16 percent or something,” he said.
He was among dozens of time share owners who contacted The Bee this month to share their unhappy buying experiences.
Dozens of others, however, told how pleased they’ve been with their time shares.
What they all agree on is that potential buyers should do their homework, ask many questions and not get rushed into signing any contract.
“This is a big investment. Take time to educate yourself so you have no regrets later,” advised Christine
“Find out all the info you would if you were buying a house or car,” Gosselin said. “Such as: insurance, financing, where does the company keep their funds, are those funds insured, tax advantages, do they offer bonus time, do they allow pets, plans for growth, are the properties owned outright or have loans attached to them, location, location, location.”
Most important: Do your math before buying to determine whether you really can afford the upfront and ongoing cost of time share ownership, Bee readers stressed.
Dottie Starr of Modesto wishes she had done that before agreeing to spend $22,500 on a deal from WorldMark by Wyndham, which has more than 50 resorts.
“I’m extremely disappointed I’m stuck with it,” said Starr, 69. “I’ve wound up being financially strapped.”
The company arranged financing for her, and even though she’s been paying about $320 a month for the past three years, Starr said she still owes about $20,000. Atop that are annual maintenance fees that keep climbing.
Starr said she can’t sell her time share, can’t rent it and can’t find openings at vacation spots she wants to go to at times she can use. She thought she was buying enough “credits” to enable her to stay at resorts around the world for four or five weeks a year, but she’s only been able to take three trips to Las Vegas.
“I listened closely. I took notes. I asked a ton of questions” at the sales presentation, Starr said. But she didn’t research how much everything would end up costing or how seldom she would be able to travel. “It’s all my fault.”
Salespeople will hook you
Many people told The Bee that time share salespeople are very persuasive and the financial details they present are so complex that it’s easy to get confused.
Ginger Merrill of Modesto warned that time share “salesmen are the best of the best,” and that they make verbal promises that don’t end up being written into the contract.
“Our first experience at a time share presentation proved to be very costly. We had no idea what we were up against. For a $75 dinner coupon, we paid $11,500 for a one-bedroom, 900-square-foot unit overlooking the ocean for one week per year. (That was) by far our most expensive dinner!”
Buyer’s remorse kicks in for many people who buy time shares.
Josephine and Richard Flynn of Escalon signed a time share contract for more than $20,000
“There’s so much paperwork and it’s confusing,” Josephine Flynn said. About a week after their purchase, they realized that paying $311 a month for their time share loan plus $700 a year in maintenance fees “was just a poor investment.”
So the Flynns told Marriott they wanted to sell it back, because they had been promised verbally that they could. They said they initially were offered $13,000 but later were told Marriott wouldn’t buy it back.
“We’ve tried to get hold of the guy who sold it to us, but we can’t,” Flynn told The Bee. “It’s hard to find out who to talk to.”
Selling it back isn’t easy
On the Flynns’ behalf, The Bee contacted the Marriott Vacation Club International Tuesday to relay the couple’s situation. Marriott agreed to look into it, and Thursday the company responded.
“We were able to contact the Flynns, and we’ve made a decision to buy back (the time share contract) for nearly the full amount,” said James Woelbern, Marriott’s senior manager for brand public relations. “We believe it’s the best situation for everyone involved.”
“That’s absolutely wonderful,” Richard Flynn said after hearing the news.
But not everyone is able to unload unwanted time shares so easily.
Several readers told The Bee they’ve tried to sell their time shares for years with no luck. Selling time shares also can be expensive because sales agents charge owners in advance — typically about $500 — to list the property for sale, with no guarantees that it will sell, or for how much.
Many owners try to sell their time share contracts via the Internet on sites such as eBay, which last week had more than 1,000 of them up for bid with prices starting at $1.
Often those listings don’t attract any bids. Sometimes they sell for a few hundred dollars. Occasionally, time share contracts with guaranteed access to prime locations will sell for thousands of dollars.
Reselling time shares usually doesn’t pay off for those trying to get out of contracts, but they can be great deals for buyers.
“We purchased a two-bedroom floating week time share that we are very happy with for $2,200 (in Newport Bay, Ore.). The original price was $16,000,” said Ed Washington of Modesto.
“I kept watching for sales on eBay. I purchased a biennial one-bedroom deluxe floating week time share (at Lake Tahoe) for $477.
“My next purchase was for a one-bedroom townhouse floating week at (Lake Tahoe) for $100, purchased again on eBay. There are other sales sites on the Internet, but I have had the best luck with eBay.”
Washington said the key to getting a good deal is to be patient and do research.
“You see a lot of time shares for sale in November and December. With most resorts, the maintenance fee comes due in January, and people want to sell them before they have to pay another fee,” Washington said. “However, you will find them available all year long.”
Points work for some but not for others
Some time shares are sold for use during certain weeks during the year at specific locations. Others have weeks that can be used year-round at various locations. Some time share companies sell “points” or “credits” that can be redeemed for stays of varying length at various resorts.
“Point sales are pushed over weeks. They allegedly allow you more flexibility in scheduling time,” Washington said.
“One of the other selling points is the ability to trade and stay at other resorts. You have to be a member of the trading group, and there is usually a fee to that. The fact that you are also charged a fee when you actually make the trade may not be mentioned, and if it is, it is glossed over really quickly.”
Resort Condominium International and Interval International are the big trading groups.
“Some people are quite happy with their points, I have not been. I have never been able to use my points for a location or time I actually wanted,” Washington said, adding that he settles instead for visiting resorts with openings. “I will admit that the week I spent in the obscure Canadian fishing village was pleasant, enjoyable and one of the best vacations we’ve had.”
Howard Black of Salida has had better luck manipulating time share trades, which enables him to vacation around the world.
Within the past year, Black said he has used his time share points to pay for a flight to Europe, a Caribbean cruise and resort stays in Hawaii, Lake Tahoe and at a mountain fishing resort. He’s booked his next big trip to Australia.
“You’ve got to learn how to work the system,” Black said.
Pros & Cons
The Modesto Bee asked readers to tell us about their experiences buying vacation time shares and to offer advice to people who are considering such a purchase. Here's a sampling:
Bettie Bridges, Modesto
"Don't get caught up in the moment, thinking what a great deal it is. I just got suckered when I bought three years ago (for $13,000, plus more than $700 a year in maintenance fees, dues and taxes). ...
"I've only used it once, and they said I've lost something like 1,300 points because I didn't use them. ...
"Before you buy, really think about whether you're going to use it that much, considering all the travel and expenses. ...
"I've spent over $1,000 trying to sell it. I hired two (sales agents), but they never called or contacted me after I paid them."
Alice Brown, Copperopolis
"My husband and I purchased our first time share in 1994. Since then, we have sold the original one and purchased two more. ...
"The old saying "buyer beware" is most applicable to the time share industry. People need to do their homework before they go to a presentation so they can make an informed decision.
"Unfortunately, most buyers allow themselves to be roped into spur-of-the-moment decisions. They need to realize there will always be another presentation with incentives.
"If they like what they see, they should leave, do some investigative work and then go back to another presentation. The sellers are counting on people being afraid they won't get the same deal later, but nine times out of 10, they can return a year later and get the same offer."
Charles Best, Modesto
"After my money was signed over ($11,500) and the deal was done, all this other stuff came out ... like I have to pay them 50 bucks a month for upkeep. ...
"I think some of it is my fault because they didn't answer the questions that I didn't ask. ... Now I know you need to ask questions and dig, dig, dig for answers."
Stan and Adele Little, Modesto
"We are totally pleased with our time shares. The accommodations are five-star and excellently maintained. Maid service is provided. Pools, workout rooms and other recreation facilities are on site. Other facilities, such as golf courses, are often on adjacent properties. We have found that our time share stay is truly a vacation with none of the responsibilities that go with second-home ownership.
"We own five weeks at Lawrence Welk's Desert Oasis (in Cathedral City), where we go each winter without fail. ... We have owned at Desert Oasis for 13 years. We paid full price for the first week but bought subsequent weeks from a broker for one-third the price. ...
"Time shares are not an investment per se, in that one cannot usually sell for the same price as the original purchase. However, they are an excellent way to have a superior vacation experience in beautiful surroundings at a fraction of the cost of renting or purchasing property."
Bill Brehm, Turlock
"I purchased my time share, WorldMark by Wyndham, back in 1999 after hearing my neighbor talk about it. It is on the point system, so I can go to multiple locations.
"Interestingly enough, I went to the presentation on a Saturday and purchased the same day. On Sunday, I was reading my Modesto Bee and there was an article on time shares and it mentioned buying on the resale market instead.
"I did an Internet search for this. I found out I could purchase the same time share for 40 percent less on the resale market, and thus canceled my purchase on Monday. I then purchased from a time share (resale agent) ...
"I additionally purchased twice more, so now I have an equivalent of two weeks per year. The facilities are very nice, a home away from home. Much more enjoyable than hotels. ...
"I would definitely buy again but would recommend not to buy from the developer but on the resale market."
Jim Davis, Escalon
"We bought in Sedona, Ariz. (and are going to trade for Branson, Mo.) ... but we figured it out that when you add together the yearly maintenance fees, the RCI membership fees and exchange fees, we could have saved quite a bit of money just getting a hotel. ...
"We want to sell it ... (The company) said it would give us 10 percent of what we paid. ...
"Then we saw an advertisement (for a firm that sells time shares). I paid them $500 in advance, they had it listed for one year, and I didn't get a nickel."
Don Morrison, Livingston
"We bought in Las Vegas in 2003. We were sold a good pitch ... but it gets expensive, especially if you don't use it the way they want you to use it. ...
"We had this bright idea we would retire and travel. We were told we could swap our time share for places around the world. ...
"But it doesn't work that way because the places aren't available when you want to go and it costs more to upgrade. We did swap for Hawaii, but it took us two years to get it. ...
"I've tried to sell my time share for $3,000, but there are no takers. I paid $10,000."
Elisabeth Harvey, Modesto
"I have had my time share for over six years and love it. I went to Sedona, Ariz., and listened to their talk. They wanted $10,000 for a one-bedroom. ... My girlfriend ... found one on a resale for $3,000, and I bought it.
"I have never regretted it. I go once or twice a year, depending if I split the week. The dues are $600, but I feel it's what I would pay for if I went to a hotel.
"The time share is wonderful, has a pool, hot tub, exercise, spa, great restaurants and, of course, you have Sedona to enjoy. I usually go in the winter because it's beautiful."
Marjorie Nelson, Modesto
"I bought a time share ... in Kissimmee, Fla., in 1994. In 2002, I had the opportunity to purchase a new time share at New Smyrna Beach, Fla., at a very good price. I could then sell my other time share, which could then pay off the new time share.
"Well, of course, that never did happen, and I have two time shares. I have tried to sell them, at four different entities, over the years -- costing me about $400 each time. You have to pay up front in each instance, and so why do they care if they sell your time share or not.
"I still feel a time share is not all that bad under other circumstances. ... Buy a time share you can drive to. Buy from a company that has a network of facilities you can exchange without paying a fee."
Michael Seifert, Turlock
"My wife and I have purchased two time share properties and have attended multiple time share presentations. ...
"I am convinced that the "points" system in time share ownership is superior to "weeks," even though we own one of each type, but for specific reasons.
"I continue to look for possible time share purchases, but probably will only purchase through the resale market, either from a property manager or through eBay.
"The only reasons my wife and I still accept time share presentation invitations is to broaden our knowledge of the industry, and we like the location of that particular property. It is, after all, a pretty inexpensive way to spend a few days in a very nice resort, if you do not mind the dreaded presentation."
Katherine Quellich, Ceres
"I purchased a time share in 2004 and paid ($30,000) in cash through Marriott. ... But now that my real estate career has taken a definite downturn, I have been hard-pressed to pay the maintenance fees.
"When I purchased the property, I was told that fees would decrease as new buyers came in. Well, that has not happened. It has increased every year. My fees are close to $1,400 this year, due in mid-January, which is virtually impossible to do right after the holidays.
"Due to these facts, I have not used my time share once since purchasing. When your fees are late, they cancel any reservation you may have without your knowledge or consent, and rent out your condo and keep 75 percent or more of the profit.
"My condo is a three-bedroom, ocean view (in Aruba). When I researched rental fees for this type of condo, they usually rent in high season from $600 to $1,300 a night. I received one check last year for $475. You do the math.
"I will never buy another time share."
J.P. Lane Hurlbert, Modesto
"After viewing the very impressive presentation from Shell Vacations, I was asked by my vacation consultant what my dream vacation would be.
"I shared that my bride was born in Fiji and came to California when she was 12. She had longed to return to her South Pacific paradise and her hometown of Levuka. ... It was my dream to make her wish come true and to introduce our children to their culture. ...
"They secured a large two-bedroom condo on the beach of beautiful Denaru near Nadi ... through Resort Condominium International in 30 minutes, and I put a down payment for my first time share. ...
"Our trip to Fiji was incredible and unforgettable. That one trip nearly paid for the time share alone."
Bill Hansen, Sonora
"We purchased our first time share in 1986 in Williamsburg, Va. ... We have been very pleased, overall, with the experience of 20-plus years of using our unit. ...
"Our family objective was to use the trading power of our unit to visit different locations every year. ... We used our unit to trade for locations all over the East Coast. ...
"(We) have also gone on two cruises (to Alaska and Hawaii) for which we got substantial discounts on the cost of the cruises by trading one week of our time share time. ...
"Potential purchasers should realize time shares are not a good investment for resale. You will most likely never get even your original purchase price back if you go on the resale market. They also need to learn about trading power -- location, size of unit and time of year they purchase -- if they plan on using the unit primarily for trading."
Bill Mensing, Modesto
"We've owned in Kauai for about 12 years. The maintenance fees are much higher than expected. We pay about $1,700 per year. ...
"It's very hard to master the trading-for-other resorts feature. ... Many owners give up on the trading feature, may not even use their home resort some years, and generally do not make good financial use of their investment. ...
"A good thing about the time shares is that they do sort of force you into considering taking a nice vacation once a year, and that can lead to nice times spent there with family or friends."
Beverly Ford, Modesto
"I'll never get involved in another one. ... I bought at The Ridge Tahoe (for about $13,000) in the early 1980s with my late husband. ... We used to use it ... but the maintenance fees got up to $700 a year, which was too much for me. ...
"The Ridge bought it back from me for about $2,000 ... but others told me it was worth $8,000 or more."
Steven Whitney, Ceres
"My wife and I have been to several presentations, mostly in Hawaii. The typical limitations were all present: high-pressure buy-now tactics, set ownership/use dates, no exchanges, use it or lose it, unknown annual fees, unknown closing and fees, unclear title policies and unclear exit strategies.
"Then came Hilton Grand Vacations Club. The first thing that impressed us was the lack of high-pressure sales tactics. ...
"The biggest plus for us was the open use policy. We basically bought points equal to a one-bedroom, one week, annual use. We can use the points at any one of 23 (Hilton) properties. ... We can also exchange our points with an international time share operation. ...
"We are very happy with our plan and recommend it to others. We purchased in Las Vegas, but use our time in Hawaii."
TIPS FOR BUYERS
The U.S. Federal Trade Commission offers this advice to those considering the purchase of a vacation time share:
Calculate cost -- To determine the cost for a time share or vacation plan, include mortgage payments, expenses such as travel costs, annual maintenance fees, taxes, closing costs, broker commissions and finance charges.
Expect fee increases -- Maintenance fees can rise at rates that equal or exceed inflation, so ask whether your plan has a fee cap. You must pay fees and taxes, regardless of whether you use the unit.
Comparison shop -- Compare the cost of renting similar accommodations with similar amenities in the same location for the same time period. Evaluate the location and quality of the resort, as well as the availability of units.
Visit facilities -- Talk to current owners about their experiences.
Research records -- Check for complaints about the resort developer and management company with the state attorney general, nearest Better Business Bureau and area consumer protection officials.
Review budget -- Ask for a copy of the current maintenance budget for the property. Investigate the policies on management, repair and replacement furnishings, and timetables for promised services.
Read contract -- Understand the obligations and benefits of the purchase. Is everything the salesperson promises written into the contract? If not, walk away from the sale.
Avoid impulse buys -- Don't act on impulse or under pressure. Purchase incentives might be offered while you are touring or staying at a resort. While these bonuses might present a good value, the timing of a purchase is your decision. You have the right to get all promises and representations in writing, as well as an offer statement and other relevant documents.
Take a break -- Study the paperwork outside of the presentation environment and, if possible, ask someone who is knowledgeable about contracts and real estate to review it before you make a decision.
Get contact information -- Get the name and phone number of someone at the company who can answer your questions -- before, during and after the sales presentation, and after your purchase.
Confirm cancellation rights -- Ask about your ability to cancel the contract, sometimes referred to as a "right of rescission." Many states -- and maybe your contract -- give you a right of rescission, but the amount of time you have to cancel might vary. State law or your contract also might specify a "cooling-off period" -- that is, how long you have to cancel the deal once you've signed the papers. If a right of rescission or a cooling-off period aren't required by law, ask that they be included in your contract.
Cancel in writing -- If, for some reason, you decide to cancel the purchase -- either through your contract or state law -- cancel it in writing. Send your letter by certified mail, return receipt requested, so you can document what the seller received. Keep copies of your letter and any enclosures. You should receive a prompt refund of any monies you paid, as provided by law.
Beware of defaults -- Use an escrow account if you're buying an undeveloped property, and get a written commitment from the seller that the facilities will be finished as promised. That's one way to help protect your contract rights if the developer defaults.
Check the wording -- Make sure your contract includes clauses concerning "nondisturbance" and "nonperformance." A nondisturbance clause ensures you'll be able to use your unit or interval if the developer or management firm goes bankrupt or defaults. A nonperformance clause lets you keep your rights, even if your contract is bought by a third party. You might want to contact an attorney who can provide you with more information about these provisions.
Be cautious abroad -- Be wary of offers to buy time shares or vacation plans in foreign countries. If you sign a contract outside the United States for a time share or vacation plan in another country, you will not be protected by U.S. laws.
For more consumer protection tips about time shares, visit the Federal Trade Commission's Web site: www.ftc.gov.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.