Monday, December 1, 2008

timeshare resale

Why Can't I Sell My Timeshares?

A short answer to this question is: there is no resale value for your timeshare because you've been sold an overpriced product. Because the sale of timeshares is unregulated in Singapore, timeshares have been sold at an absurd premium here compared to countries where timeshares are regulated.

LGM says it is prepared to buy your timeshare at about 80% of the price you paid for but you will have to buy their lifetime vacation travel club plan of $40,000 which means that you will have to fork out 50% or more cash depending on the value of your existing timeshare property. This hefty price tag represents $1,000 premium per year assuming you faithfully use this travel program for 40 years without fail.

It it a good deal? It depends on whether the travel company will honor their lifetime commitments to you. Looking at the way timeshares are performing as an equity product, I have serious doubts. You can bargain down resaler's price tag by reducing the lifetime (years covered) of the product but I doubt it will solve your core problem - which is reducing your travel costs over the long term.

As anyone who have joined a lifetime membership program like signing up for a slimming program or a car polishing service will tell you, it takes a lot of discipline to use the service intensively and the chances of the service lasting a lifetime is pretty slim. So a lifetime membership program is a loser's game at best. Companies that offer a lifetime membership count on buyers not using the service intensively throughout their lifetimes even if the company lasts a "lifetime".

There are other 'timeshare resale" companies offering such resale / terminating solutions for your timeshares. This is their code word for your timeshare being "unmarketable" i.e. your time share is "not registered" (or "fake") . They will also use their "whispering system" to determine your property's value. Friends who have seen this piece of paper from this whispering system were not impressed by it. Ironically, insiders says that there is no such thing as a "non-registered" timeshare. (You can confirm it with companies like LGM). To sell your timeshare to these re-sellers, you'll have to buy their product and top up more good money for a bad investment. There is no way you will be able to get cash back. And worst still, this new product is no better than the old one - even worst possibly.

For companies which offer an opportunity for cash back, - there is a catch - you will first have to buy their expensive product and than market it at a some timeshare auction site. This auction process may take a few months (according to them: 2-6 months) depending on the availability of buyers (sic).

You will have to assume that these companies will be around in the ensuing months while your new investment is being auctioned off. You'll also have to assume that there are buyers to this big ticket item. Insiders say you'll have to mark down your price to move the product as these resellers do not guarantee the sale of the product. Even if they guarantee, there is no guarantee they will keep their word.

You may be able to sell it if your price is right. It is all about how desperate you are in selling your second-hand product at a lower price. How much money will you eventually get back, if any at all? Your guess is as good as mine.

At the end of the presentation process, if you don't buy, they will usually subject you to an intimidation process. They will try to imply that you are, well not stupid, but there is obviously some wrong with you if you can't see a "good" deal because "many people" have benefited from such a scheme. You can't talk to these people and even if you do there is no guarantee that you will have a happy ending like them.

This process inevitably involves a time limit to take up the offer - which is usually means that you must sign up immediately. They say that their offer is not available tomorrow. This is nonsense. Of course, you can buy tomorrow. It is not like they have people lining up outside their office to buy their "fast selling" product.

CASE has given good advice to the public about timeshares and everyone should apply it when dealing with these companies: "If you are asked to buy something immediately.... leave immediately".

CASE other advice is to deal directly with the resort owners rather than middle men like these.

As mentioned in my earlier post, don't upgrade, don't invest more money unless you are prepared to take more risks with your hard earned money.

You should only average down on your investment if the company and industry is financially sound, has long term growth prospects and the ability to give consistently good customer value over the decades - and this usually applies to public listed companies in a regulated stock exchange.

Now that timeshares are difficult for these companies to sell, due to bad press, they are diversifying into vacation travel membership plans. I heard that some of these companies are also moving into landbanking (heaven forbid!). Landbanking is another unregulated business in Singapore, so you can expect a lot of companies will be getting into landbanking. Some are good companies, but many are likely to be fly-by-night companies out to sell you a scam. Read more about landbanking in Singapore by clicking here.

Business have been so tough for these timeshare resellers, they are now doing home visits / calls. I would not advise against this as it is difficult to terminate the meeting when they are at your home and you may be setting yourself up for junk mails and sales calls.

Be careful when dealing with such companies. Insiders say that timeshare reselling are not allowed in Singapore. I am unable to verify this claim but looking at the huge list of blacklisted timeshare resale companies, there is probably some element of truth in it.

How do you know whether you are dealing in an unreliable timeshare resale company? Look at their "profile":

How they approach you:

  • How did they get your name and phone number
  • What they promise on the phone versus what you get eventually. On the phone, they will tell you that you won't need to fork out a single cent. But during the presentation, they will ask you to pay a big sum of money by credit card.
  • The type of people who will interview you
  • Lengthy interview process to give the impression they are "serious" people. Its actual effect is to wear you down so you will be glad to fork out more money to remove your uncertainties about your ill-fated timeshares.
  • The threat of losing the opportunity to sell your timeshare if you don't sign up with them immediately - "We can only buy 20 timeshares, and we have reached our last quota today". This is nonsense. It is a high pressure tactic to make you commit cash before you are able to do due diligence. You can always come back if you have the cash. The question is whether they have ceased operations because of you-know-what.
  • The devaluation of your timeshare - they will claim that your timeshare is "not registered" without substantiating their claims.
  • Their highly secretive, non-transparent "whispering system" which provides no proof that you are getting a fair price of your timeshare
  • You will have to buy their product which costs more than your timeshare
  • There is no "cooling off" period as required by legislation
  • You can't show the contract to your lawyers
  • The contract is very sketchy of details of their commitments and pricing versus what they promise you verbally. The "contract" is loaded in their favor.
  • Gated-mentality - locked doors to keep out unwanted visitors
  • More staff than customers in the office. Most of them idle. You are shuttled from one person to another if you are a "difficult" customer.
  • And for Pete's sake don't sign on the dotted line because some ang mio tell you that this is the only way you can sell your timeshare. Particularly if the person is from the UK and has a fancy job description title. Chances are he is probably in it for possibly a cut in the action as a broker.

Check with the Consumer Association of Singapore (Case), Timeshare Association (Singapore) and international timeshare blacklist websites to see if the company you intend to deal with is not blacklisted or on their watch list.

By all means, do go to these timeshare resale presentations if you must - just simply for its therapeutic value ie. to vent your frustrations. But don't buy unless you know exactly what you are getting into. Believe, more times than not, you really don't know what is going on until well after the purchase. By which time, it is game over for you.

Questions to Ask if you want to attend a timeshare resale presentation:
Is your company registered with Registry of Companies?
Is your company a member of the Timeshare Association (Singapore)?
Are there any complaints against your company with CASE or MAS?

Then tell them: "Do you mind if I check these details with the 3 organizations concerned before signing up with you?"

If pushed for a commitment, say: "I don't have any money right now. Can I settle payment in one month's time?"

If they insist on an immediate commitment, threaten to make a complaint with CASE. Insist on collecting any gift they promised you for sitting through a 1-2 hour presentation.

Related Timeshare Articles:

Blacklisted Timeshare Companies

Timeshare Singapore (SG)

Hard Sell Tactics

Timeshare Resale | LGM | Maxmega

Timeshare Complaints

© - why can't I resell my timeshares?

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