Why Are Timeshares Scams? The Top Four Reasons
On the surface, the offer made by a timeshare company sounds pretty good. You get to invest in an appealing property or set of properties where you’ll be able to make countless memories with friends and family members for years to come. After looking at some great pictures, or even touring the facility for yourself, it will be hard to think of anything bad to say about the offer in front of you.
It’s especially tempting when you compare the cost of buying a timeshare to the cost of buying your own vacation property in the same area. Where you might not be able to afford a vacation house or condo, you can do the math and see that the timeshare will fit into your budget. What’s not to love?
The shiny exterior of timeshares is what causes so many people to sign on the dotted line, ignoring the dark interior that leads many people to determine that timeshares are a scam. Let’s take a closer look in this article to uncover what it is that should cause you to run in the other direction when anyone talks to you about an “exciting” timeshare opportunity.
#1 – The Hard Sell
As a starting point, we can look at the tactics that are used by timeshare industry professionals in an attempt to sell you on their timeshare product. These tactics are notorious for being some of the more aggressive – and potentially misleading – in the consumer sales world. Anyone who has sat through one of these “presentations” can speak to just how hard the salesperson is going to work to get you to sign on the dotted line.
While every industry employs sales professionals to close deals, you should stop and think about why they are having to work so hard to convince people to make a purchase. Why use so many tricky tactics? Why offer so many freebies along the way? If the product could stand up to its price in terms of being offered at fair market value, it wouldn’t seem like any of those steps would be necessary.
It might be most helpful to contrast this situation to the experience of buying a traditional home. If you are in the market to buy a house, you’ll likely work with a real estate agent to search properties in your target area – and the seller’s side will also be represented by an agent. To be sure, these agents have a vested financial interest in closing a deal. Yet they aren’t going to be using the aggressive tactics that timeshare industry professionals so often employ.
Instead, the agents in a potential home sale are just going to present the information to their client, answer any questions they may have, and help them find the right property (or accept the right offer, in the case of the seller). No hard selling tactics are needed because the value of the investment is obvious. The buyer will own a hard asset, and while that asset will go up and down in value over time, there is a tangible nature to the purchase that makes it more transparent.
With a timeshare, things are more ambiguous. There are points, maintenance fees, blackout dates, and on and on. What you own isn’t entirely clear, and it’s quite likely that the true market value of your purchase will never amount to what you paid for it – even on the same day that you write the check.
#2 – A Non-Investment
The nature of investing in anything is that the value of your investment can go up or down. This is true of traditional real estate, as we discussed above, and it’s true of the stock market, collectibles, and everything else. Investing is risky, even if the degree of risk that you take on depends on the nature of the investment.
It’s hard to say that timeshares are a bad investment, however, because they really aren’t an investment at all. With a true investment, there exists some possibility that what you purchased will be worth more than the purchase price when you go to sell it in the future. In the case of a timeshare, that just isn’t going to happen. Not only will you fail to make any money on this purchase, but it’s likely that you won’t even be able to sell it at all.
Countless people would be happy to give away their timeshare to anyone who would pay the closing costs and annual maintenance fees. If there was any potential investment value in a timeshare, you wouldn’t have a whole niche market of companies that exist solely to help people get out of their timeshares.
#3 – The Waters are Murky
So far, things aren’t looking great for timeshares as we dive into how they play out in the real world. Most people who purchase a timeshare are pressured into making that purchase, and once they do, it becomes clear that the hard-earned money they spent isn’t going to lead to any kind of positive investment down the line. As we continue to answer the question of why are timeshares scams, we now turn our attention to the confusing, murky pricing structure that they use.
If you make the decision to take part in a timeshare presentation, you might expect that you’ll be presented with a price relatively shortly into that presentation. After all, they are trying to sell you something – so shouldn’t the price of that thing be provided upfront? It should be, but it isn’t.
Instead, you’ll get nothing but fluff during the early stages of the presentation. You’ll be shown plenty of attractive pictures, maybe even tour the property, and perhaps be given a couple of hand-picked case studies highlighting families that have loved their timeshare experience. Nowhere in there will you find details about the actual cost of this purchase.
Then, when that point finally does come into the picture, the first price that you are shown will likely be more than they expect you to pay. This “start-high” strategy is meant to soften you up for offers that are going to come later. If you initially say no in your mind when you see the first price, the actual price that they hope you will pay by the end of the presentation will start to seem like a great deal (even though it isn’t).
The asking price for a timeshare can be so fluid because there really isn’t any firm underlying value. The “value” of the timeshare is only what they can get you or another buyer to pay for it – and a big percentage of the purchase price is going to go to the salesperson in the form of a commission.
In addition to an upfront purchase price that is never quite set in stone, you’ll also be committing to taking on the maintenance fee that is likely to continue climbing year after year. Even if you think that fee is reasonable enough at the moment, you can’t count on it staying there – it’s going to go up, and your experience as a timeshare owner is only going to get more expensive moving forward.
Finally, the ongoing costs associated with owning a timeshare don’t stop at maintenance fees. Special assessment fees can come into the picture as well, which may be levied when something like a natural disaster occurs and the property needs to be repaired or renovated. As an owner, you’ll be legally on the hook for these fees, even if you rarely – or never – use the timeshare.
#4 – Promises That Fall Flat
Perhaps the most frustrating thing of all for timeshare owners is simply that they often don’t feel like they wind up getting what they were promised. This feels particularly painful because timeshare industry professionals work hard to forge personal relationships at the start with their leads, so they can gain trust and hopefully make a sale. In the end, they often wind up betraying that trust by offering confusing or misleading promises that misrepresent the experience of becoming an owner.
They will paint a picture of you and your family spending relaxing vacations in glorious conditions, enjoying the nicest rooms in the building. But is that how it will play out in real life? Probably not – remember, countless other people have received this same sales pitch, and been given these same notions. How many of the luxury corner suites could possibly even be available? Does your specific ownership level entitle you to access to those types of rooms?
Even if you don’t care about getting to stay in the luxury rooms, you might struggle to find availability at all in the summer months when the weather is nice and everyone wants to travel. Those shiny timeshare sales brochures would look a lot different if the pictures weren’t taken on a warm, sunny day. You might look on a site like Expedia during the summer to see units available at the property you want to visit, yet you could be told nothing is open when you try to book through the timeshare.
So many people are disappointed with their experience as a timeshare owner because reality usually falls way short of expectations. Those expectations were set sky-high in the initial sales pitch, which is why people agree to spend their money in the first place. As the months and years pass, and small issues turn into big ones, the façade comes crashing down and many owners start to see this experience for what it really is – a letdown and a waste from start to finish.
Get Out Now
Why are timeshares scams? The article above has laid out plenty of arguments, and there are likely other reasons that you might have in mind. If you already own a timeshare, there is a good chance you’d love to get out of it. To make that dream a reality, get in touch with us today to get the ball rolling. You can submit our contact form, engage with our live chat, or just pick up the phone and give us a call. Let’s work on getting you out of your timeshare as soon as possible so you can move on with your life.
