April 11, 2015 • By Dennis Beaver
Our recent article on timeshares resulted in dozens of emails and phone calls, two which stand out. One was from Hanford readers Trish and Roy, on vacation at a resort in Mexico, signed up for a “90 minute presentation.”
“Fortunately the Sentinel has your column on its website, and just like at home, it’s the first thing we read every Saturday even when we’re out of town. Your article was meant for us, because we have trouble saying no! And so, we promised each other that we would not cave in to high pressure sales tactics, and there were plenty! Even though we got lots of mean looks from the sales people, we escaped without signing a thing. Thanks so much!”
The other was an interesting chat with Orlando Florida-based, Lisa Ann Schreier, a former timeshare sales manager who, happily for anyone about to buy a timeshare, discovered that she was much better at educating the public about timeshares than selling them.
She is the founder and director of Timeshare Insights (Timeshareinsights.com) which, in our opinion, provides must-read information both for owners and prospective buyers, and shared with us the little known sales tactics, plus ways of saving thousands of dollars which you’ll never hear in a sales presentation.
“For some families,” Schreier maintains, “timeshares are worthwhile, especially if purchased on the secondary market at a discount. And, I caution anyone, especially older people who have difficulty in saying No, to stay far away from sales presentations.”
“Make the older couple feel guilty”
“Using guilt, she points out, “making the couple feel guilty if they do not buy, is an effective high pressure technique when used on older people. As couples in their 60s might easily have a child the age of the salesperson, they often let their guard down, falling victim to guilt, hearing such things as:
- Don’t you want to buy this wonderful vacation property and leave it to your children?
- Don’t your children and grandchildren deserve better than a cheap hotel?
- If you don’t buy today I am on the verge of being fired!
- I can’t believe that I wasted three hours of my time!
“If you hear anything like this, my recommendation is to get up and leave the room, because you are dealing with someone preying on your emotions.”
You do not have to buy from the developer
Schreier knows lots of happy owners, “And the happiest saved themselves thousands of dollars by not buying during that so-called ‘90 Minute Presentation,’ instead, used the legitimate secondary market.
“Dennis, chances are that you have readers who purchased a $20,000 timeshare–the average price from developers–completely unaware that as much as 60% of that price went to pay for commissions and marketing expenses, an enormously high overhead, unique to this industry.
“That very same property on the resale market could have been obtained for $3,000 to $5,000, from owners who are now looking to get out of their timeshare for one reason or another. Their loss could easily be your gain.”
Don’t believe the money-saving hype – Questions you must ask
Most presentation begin by asking how many nights you might spend in a hotel and at what rate. Then, the salesperson shows an inflation-factoring chart, projecting how much more that same room will cost 5, 10 or 15 years down the road — all of it a reason to “lock-in” a good price now.
“But that is usually based on fuzzy math!” Schreier underscores. “Hotel rates have not risen nearly as much as they tell you. Look at all of the websites which offer discounted hotel rooms. So the idea of buying a timeshare merely to save money becomes far less attractive.
“The reality is that you should not look at a timeshare as a money-saving opportunity, as it is often going to be far more costly than staying at a hotel. But there may be other advantages.
“Always remember that when you buy a timeshare you now own an interest in real property, and that means taxes and maintenance, from hundreds to thousands of dollars a year even if you don’t actually use the property, and it never ends unless you are able to unload it.
“You need to learn as much about the property as possible, what percent of units have been sold, the delinquency rate, the future of the resort. The reason is that if it has a high delinquency rate, then your share of maintenance and fees will be much more.
Finally, the former timeshare sales manager agrees with Los Angeles-based Bryan Hull, Contracts Law Professor at Loyola Law School, who tells You and the Law:
“Don’t fall for illusory promises in their contracts — meaning no promise at all. Buyer Beware!”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.