Wow — the things you learn when you start digging for info. Because of my aunt’s dissatisfaction with her timeshare, I wanted to know more. That led me to TUG — Timeshare Users Group. Got off the phone at almost midnight Wednesday night, after an incredibly informative hour and a half talking with Brian Rogers, who runs the site. His father William started it about 15 years ago, wanting to connect with other people to share their experiences, good and bad, about timeshares. Brian took over from his dad two and a half years ago.
His dad originally bought a “new” timeshare in Hilton Head and while he’s perfectly happy with what he bought, he realizes he could have gotten the same thing and saved a bundle. Brian learned from his dad and buys “used.”
Brian tells me TUG has about 30,000 registered users, with about 200,000 browsing the site. A respectable number, but only a fraction of the four million timeshare owners. But it’s quite an eye-opener to browse the site and talk with Brian.
“Everyone who comes to the site is looking for help, probably half are looking to sell,” Brian says. Why is that? They find out they can’t use it the way they’d like; it costs more than they expected (“Those maintenance fees never go down, they always go up,” he tells me); they get home from paradise, reality hits and they’re freaked (“Oh my God, what have I just done?!”). They start searching the Internet and find that what they just spent $10,000, $20,000, $50,000 for is listed on TUG or Ebay for $5,000, $1,000, even $500!
Talk about being dashed with cold water. As I wrote in yesterday’s post, there is virtually no after-market for timeshares, yet the market is saturated with people wanting to sell. But why, I ask Brian? If you can get the exact same thing for THOUSANDS of dollars less, why don’t people buy in the aftermarket?
“When you buy a new car,” he says, “you know it loses 15-20 percent of its value the minute you drive it off the lot. We all accept that.” Timeshares, he says, lose 40 percent of value immediately, and usually more. If you check the classified ads on TUG, they’re being sold for pennies on the dollar. Yet people are leery of buying a “used” timeshare — even more afraid than they are of buying a used car.
“People know they could buy the same car used and save money,” Brian tells me, “but they’d rather buy new because they figure they’ll get better quality. But a room doesn’t fall apart,” he says. “And with resale, you usually get the exact same benefit as someone who bought new.” But still, people are afraid. Or unaware.
I asked if people think the ads on TUG are a scam. “Some see the price disparity and just don’t believe it can be true,” Brian says. “They think, ‘How on earth can it be that good if it’s 60 percent, 70 percent less than the developer’s asking price?’”
Developers and sales agent are getting savvy in the way they handle resales, Brian tells me. In some cases, they make sure those who’ve bought for less don’t get the same “VIP” benefits and perks that come from paying full price — they don’t get bonus weeks or “Gold Cards” or the use of the pool and sauna, things like that. If that’s important to you, retail is the way to go. But I particularly enjoyed the response of TUG member “Tombo,” to poster “Jasenj1”, who was thinking of rescinding his $10,000 timeshare purchase after seeing the exact same thing offered at resale on the Internet for $500: “IF YOU BUY A $500 WEEK ON E-BAY, YOUR FAMILY CAN ENJOY THE EXACT SAME VACATIONS AT THE EXACT SAME RESORT WHILE KEEPING $9500 IN THE BANK.” (emphasis Tombo’s)
So (wth apologies to “Bud28dy” who’s not happy that I used my family as an anecdotal story) I asked Brian about my Aunt Liz. What happens if she or someone in a similar situation just walks away from their timeshare? Calls the company, says they want out, they’re through, take it back, they’re not paying anymore?
“In most states, a timeshare is real property,” Brian says. “Unlike a house, they can’t come and take the property away if you stop paying, but it’s like if you stop paying on a credit card. They probably will send credit agencies after you.” Though Brian says TUG doesn’t condone walking away from your timeshare (you did, after all, enter into a legal agreement), he says he’s heard of some older people who are willing to risk it. He’s heard of some brave (or foolish?) 80-somethings saying, "Sue me! What do I need credit for?"
I think Aunt Liz is planning to be around long enough that her credit score matters. We certainly hope so!
Next week: Lots more timeshare information –- TUG is a fountain of wisdom! We’ll also welcome some guest bloggers — let’s call it Real Estate and the City. Nightline’s young staffers say they’ve got the job to die for, but will they ever be able to get on New York’s property ladder?