Postcard companies: How the transfer takes place between original owner and new buyer

[shopgirl Senior Member Find all posts View Profile Close shopgirl]

I would appreciate it if those who tend to criticize my "rants" about postcard companies would take it easy on me this time. Please?

We currently have a week that has been stopped at Timeshare Transfer for 8 weeks, due to ROFR that PAHIO claims to have but really doesn't. They have a clause in their contracts that says the owner must contact them before selling. They do have ROFR written into their contracts starting July of 2005. Anyway, when the owner contacts PAHIO, they will offer an amount for the week. Then if you get more than that, they will let the sale go through. Keep in mind, this is not really ROFR. All you have to do as the seller is write a letter saying you want to sell it to whomever, and they let it go because legally they cannot stop the sale.

So I questioned a few knowledgeable people about the process that a Postcard Company must follow to get money from both ends. This is going to make some of you mad, but it is going be redundant information for most, so some are going to think, "no duh." But humor me anyway and don't get abrasive about it.

Example of a PAHIO sale:

1. Postcard Company gets $3,495 for a week from someone wanting out. The postcard company gets power of attorney to turn ownership over from seller to new buyer. Keep in mind that this week is still in the original owners' names (PAHIO would have paid this person something for their week)

2. Ad is listed on ebay.

3. Bidder pays for week, including closing costs and transfer fees.

4. Buyer pays, sending closing company full payment via cashier's check.

5. Estoppel is sent from Timeshare Transfer to resort. The deal is stopped at this point.

6. Postcard Company is notified that PAHIO will buy back the week.

7. Postcard company, since they have power of attorney, takes the cash.

End result:

Owner does not get the money. PAHIO is not protecting the owners at all.

Postcard company gets paid twice.

Developer gets to resell a week they already sold once before.

If there is no ROFR exercised, there are two closings that take place simultaneously. The timeshare is transferred from the original owners that paid $3,495 to the individual seller or the postcard company (one of ours had Thomas Ochoa on the deed and another had the postcard company, Vacation Solutions). Then the deed is turned over to the new owner, with the seller on the deed now listed as the postcard company or employee of the postcard company.

There is half of a closing that does happen with the ROFR. The postcard company gets a closing from the owners to their own names. How did that happen without it being stopped. The power of attorney is the key to that. The postcard company must have power of attorney, because if they don't have it, the owners could change their minds, when they find out how much itheir weeks actually sold for. Keeping the owners in the dark about the value is important.

I have great disdain toward the postcard companies. They make their money no matter what, but the original owners pay. How could an owner not benefit anything when ROFR is in place? It is a terrible system that allows this. I have to give credit to the geniuses who figured out how to make money on others' misfortune, but I would not want to face the consequences of their wickedness. I believe that the truth will out. There has to be an end to the postcard companies.

If anyone has any other details to add, I would love to better understand this system.

[shopgirl Senior Member Find all posts View Profile Close shopgirl]

What can we do to stop postcard companies?

If you own at a resort that has a good HOA, you can help stop the postcard companies. You can write a letter or call a board member and ask for a paragraph to be inserted into every newsletter from the resort.

We are doing this at Twin Rivers. A letter has already been drafted and approved by the other board members, explaining to owners that they may deed back their weeks by paying one year of maintenance fees in advance. I have already contacted our other Colorado resort's board of directors and asked them to do the same. I have another resort to contact as well.

If we all act, we can stop these guys, but we must all work together and do it quickly.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

What can we do to stop postcard companies?

Even in the last few years, when the house market is booming, there are a lot of courses that teach you how to become rich buying real estate. And most of them will teach you a lot of ways, one of them is to find people in distress and try to squeeze the equity out. It becomes more now that most market is slow.

So to hope the post card company can be stopped IMHO is hard.

I look at this as just another way to get rid of timeshare.

IMHO, I would believe you present the possible choices let people know, and it will be their choices. And for this particular method, it would be good if people know when dealing with a company like that how to make sure they achive what their initial goal - that is, to get rid of their TS.

In my community, we have to pay the garbage company although I can simply drive to a garbage dump ground operated by the city government. I can certainly sell some of my stuff I put into recycle or garbage bin to eBay, charity, drive to the dump group, or just use the pay service. I don't see anything wrong.

Samething as TS.

When I put TS into my trust, I also put a document tell my trustee, list each possible route and what I will do and what my perfered way. Give to a postcard company is in that list, although it is the bottom of my choices.

If I want to get rid of my TS, I can sell it, I can donate it, I can try to talk to the resort see if they want to take it back, I can give it, or I can hire profession to do it, or I can pay someone to try all the combinations. Each one has advantage and disadvantage.


To sell, I think Tug's advice "How to sell" is one of the best. I don't have problem try to sell on eBay myself although I never sell anything on eBay. I believe if I just list few good closing companies will do. However, there is no guarantee how much I will get or even if it will get take. So you may need to expect to pay some money during the process.

Talk to resort, either they take it or they did not. And the policy may change because the HOA has new leader or bad/good experience.

Donate may have some tax benefit, and tug's advice is very clear but it does take time to ask each one.

To have someone professional enough, and authorize them to try all these possibility for you is another way. There are a lot of good quality people in this forum and in the Yahoo Fairfield timeshare group. But you should have to mentally prepared you may still need to pay them. And this approach will guarantee you will loss money in most cases to start with. I don't know if my trustee will be comfortable to do that, but they have my bless if they want to do that. Either way, the best way to protect is to make sure you give these professional bless to try enough route, but pay them a fee you think is reasonable enough only when the TS is totally removed. And that does not mean you will pay to a closing company on the table because there a quite a few closing companies that work hand in hand with some bad company. This is the last approach I will take. You should have a reputable escow company, and pay them only when the recorded deed is presented if they sell it, and have HOA's letter accpt the TS if they give to HOA, and have charity's receipt if they give to charity.

I read Spence's experience. Sounds to me, majority people go in there are prepared to get rid of their TS. I believe it is not like people taking a TS presentation tour when they did not prepare to buy a TS. However, I do see the way they handle stuff that actually does not get rid of the TS until they get rid of it. So to me they are a up-front company.

The problem with up-front company is you don't have any protection. And the way they try to handle the process, I don't believe they are trying within the law. I believe they are trying to work around the law. So if you are dealing with someone who intentionally try to avoid the law to start with, you are put yourselves in great risk to loss with no protection.

Could there have someone that very honest and try their best to make it work? Sure, I have no problem to believe there may have. But unfortuantely, in this society, that along does not give you any protection. My trustee does have my full bless if they can get their own lawyer review the transaction documents and agree the whole responsibility will be removed the min they pay the upfront fee and both side sign the documement.

p.s. I have bought from them, and I know I have bought from agent that sell week for HOA. And I suspect I may have bought from agent that sell the week for them. Do I feel upset? No. However, I found if I deal with them directly, although I will pay much less, they usually much slow and the 2 times I deal with them they all come with some issue(s). On the other hand, if I deal with agent, I found it usuallly more informed, and less issues, and if there is an issue comes up, they are more quick to fix it.

Jya-Ning

[shopgirl Senior Member Find all posts View Profile Close shopgirl]

Jya-Ning, I love your analogy! Timeshare that is unwanted is like garbage to some, but I am a recycler!

So many people are comparing a dealing with a timeshare salesman as being the same as a dealing with a company like Timeshare Relief. The differences are drastic.

How pessimistic is it to say, "Timeshares are not even worth $1.00 on ebay, are incredibly difficult to even give away, your heirs will not want it and will resent you for leaving the mess for them to clean up?"

I would rather sit at a timeshare presentation and feel good about my past purchases, any day of the week. I love it when the salesperson says that we will never get into their resorts again, that we traded in just once and will never be back. I see those resorts all the time for exchange, so I know they are talking a big story. They are salespeople, out to make the big bucks, and lies are just a part of the game.

Hawaii retail prices are probably about twice what the actual real estate value of the property would be, if you bought the units outright. A two-bedroom at Wyndham Bali Hai is about $34K, which gets you 308,000 points. A condo on Hawaii that has the same amenities and luxury would be over $1 million. The real estate value is whole lot better than the $3,495 the owners pay to get rid of a timeshare. The timeshare salesperson is a lot closer to the truth of the value than the Timeshare Relief salespeople are.

We need alternatives for owners to rid themselves of truly unwanted timeshares. We need a database of these unwanted timeshares and a way to market them that is cost effective and easy to find.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Last week while on vacation, I bumped into someone who wanted to get rid of their timeshare. He had already been scammed by an upfront fee con, so I warned him about the postcard creeps. I also suggested he sell it or do a deed change to add his children to the deed, thus avoiding any gift certificate costs. The week in question had some value and though it was a week in an overbuilt location it was one of the higher demand weeks.
We really can't stop the postcard companies. They are keeping their activities on a legal or near legal basis, so all we can do is inform of better alternatives. I suspect these companies are playing pretty close to being illegal and hopefully someday they will cross the line and end up in trouble.

[falmouth3 Senior Member Find all posts View Profile Close falmouth3]

You can't stop some people from throwing away their money

My in-laws bought a timeshare from the developer and realized they weren't going to use it. So what did they do? They went out and bought another that they never used!

Around the time they realized that they didn't want them, I bought a donated one on eBay. I also found TUG around that time. I did some research on charities that they could donate to. I sent them an email with advice and a ton of links. They decided they would rather get some money for it so they paid an upfront fee.

I was never sure exactly what they owned, but apparently both properties were Fairfield, but whether they owned the week or points wasn't clear. I told them that points were going for 1-3 cents each on eBay. They didn't like that either so they decided to go to yet another "seminar" and they gave one of the timeshares (plus cash, I think) to a vacation club. They are so pleased that they did so well in finding this club that they put all of their childrens' names on it too so the kids could "inherit" this great deal.

At least they "gave" or "sold" the remaining TS to my bil who has already used it for an exchange and is thrilled. I'm glad someone figured something out here.

Sue

[falmouth3 Senior Member Find all posts View Profile Close falmouth3]

Example of a PAHIO sale:

1. Postcard Company gets $3,495 for a week from someone wanting out. The postcard company gets power of attorney to turn ownership over from seller to new buyer. Keep in mind that this week is still in the original owners' names (PAHIO would have paid this person something for their week)

2. Ad is listed on ebay.

3. Bidder pays for week, including closing costs and transfer fees.

4. Buyer pays, sending closing company full payment via cashier's check.

5. Estoppel is sent from Timeshare Transfer to resort. The deal is stopped at this point.

6. Postcard Company is notified that PAHIO will buy back the week.

7. Postcard company, since they have power of attorney, takes the cash.

End result:

Owner does not get the money. PAHIO is not protecting the owners at all.

So I take it that these enticing weeks at PAHIO resorts, currently listed on eBAY for $299 - $399 will never close?

Sue

[shopgirl Senior Member Find all posts View Profile Close shopgirl]

Well, sure they will close. The postcard company will close it to themselves, they have power of attorney, then they will take the cash directly from PAHIO.

[somerville Senior Member Find all posts View Profile Close somerville]

If you have paid for the timeshare and have a signed agreement, you may have a claim against the postcard company and Pahio, if Pahio does not have a ROFR. Pahio can be liable for encouraging the seller to breach its contract with you. Of course this assumes that it is worthwhile to pursue legal action on a timeshare sale, which we all know generally is not the case. However, you could file a complaint with Pahio's regulator in HI, and with the real estate commission in HI and the state the postcard company is located. In my opinion, the postcard company is acting like a broker for the owner when it is selling based upon a power of attorney (POA).

I am surprised how naive the people who deal with postcard companies are. After paying the company and giving them a POA, they still own the property until and are liable for all fees it is disposed of by the postcard company.

I purchased a unit from one of these companies a few months ago. It was a deeded interest in an orphaned points system. The underlying unit was a prime summer beach week. The deed got transferred to me fairly quickly, but I have been having problems getting the points membership transferred by the closing company. The owners who signed the POA are still on the hook. If not resolved by the time club fees are billed, the owners will find themselves owing the club fees, but no longer having a deed to the property.

[falmouth3 Senior Member Find all posts View Profile Close falmouth3]

Well, sure they will close. The postcard company will close it to themselves, they have power of attorney, then they will take the cash directly from PAHIO.

What happens to the eBay purchaser's money?

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

In my opinion, the postcard company is acting like a broker for the owner when it is selling based upon a power of attorney (POA).

I believe this is the untested achilles heel of the post card companies. I believe that they are acting illegally and against state real estate laws by using power of attorney to bypass brokerage laws. What people don't know is that it is quite easy to submit a complaint into many state real estate commissions for unlicensed activity. If they get enough complaints, they will investigate.

The post card companies have really ramped up their activity. It won't be long before hundreds of people start complaining about the way they do business.

That and the open market place will serve to curb their activities over time.

[shopgirl Senior Member Find all posts View Profile Close shopgirl]

What happens to the eBay purchaser's money?

The escrow/ closing company should refund the money back to the bidder in full.