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Talking Timeshare with Wes Kogelman and Mark Silverman
Transcription of Radio show
Mark: Wednesday, so it must be Talking Timeshare, at least that’s what the music tells me. I’m Mark Silverman. I’m your host. You’re listening to us on Radio Slot. Have to say it is a pleasure to be back in studio. Last week, as you know, I was on the road doing the program. Have some interesting insights from my travel that we’ll talk about later in today’s program and also in future programs. There are some guests that I’m booking as a result of that. That’ll be a little bit later on.
I should mention … and we’ll talk about this in the second hour, as well … I have talked much about the liquidation companies, the noted postcard companies. I mentioned last week that I’d had an interesting conversation with one of them and once again implored them to come on to the program, an invitation that the postcard companies in general have been declining for about a year now. Next week, that changes. One of the companies has agreed to come on the program and chat with me and take your calls. We’ll talk about that more later, as well.
If you’d like to get in the conversation, the number’s 415-735-7568. You can follow us online. The website’s TalkingTimeshare.com, and the email is Mark@TalkingTimeshare.com. Couldn’t be easier. Facebook, we’re Talking Timeshare. Great place to get program previews and summaries, and also to ask questions or bring up issues that you would like to see discussed on future programs.
Now that we have the housekeeping out of the way, I’m going to bring on my first guest today, somebody who’s been in the industry for a long time. I’ve interviewed him for my column in the past. He’s in an interesting space, one that we’ve talked about and some have been critical of in the past, the space he occupies. We’re going to talk about that, as well. Wes Kogelman from Buy A Timeshare, if I press this button. Wes, are you standing by?
Wesley Kogelman: Yes, Mark. How are you doing today?
Mark: Good, good. Thank you for joining us. Matter of fact, you’re fresh off an appearance where you were speaking about many of the things we’re going to talk about, aren’t you?
Wesley Kogelman: Absolutely. I’ve been talking about this subject three different conferences this year.
Mark: Give us a quick intro to BuyATimeshare.com.
Wesley Kogelman: BuyATimeshare.com’s actually been in business 14 years. We’re one of the originals in the for-sale-by-owner advertising space, helping individuals find a exit strategy out of a product they may not want. We really focus on advertising with creating networks for brokerage to help people actually sell these products and get rid of them. It’s completely focused on the buyer. Our domain name is BuyATimeshare.com. If you type in “buy timeshare,” “I want to buy a timeshare,” we come up on top of the search engines. We’re really driving that buyer traffic and allowing people to know that there’s products less expensive on the secondary market than directly at the resorts.
Mark: We’re going to talk about that. That’s obviously something we’re going to talk about quite a bit. I want to talk about … and I did allude to the fact that not necessarily your firm but the space your firm occupies is one that some have expressed concern over. Would that be an exaggeration, if I put it that way?
Wesley Kogelman: You’re being very polite, Mark.
Mark: Thank you. Thank you. Some of the issues have been voiced by … For instance, there’s a Licensed Timeshare Brokers Resale Association that only has brokers that don’t take any upfront fees at all. Of course, they might get a larger slice of a sale that takes place, but they only get paid if a sale is completed. Then, of course, you heard me allude to the postcard companies. We’ll talk about that more a little bit later on. You, as you pointed out, are in the for-sale-by-owner category. You are in business to help owners sell their timeshares.
Wesley Kogelman: What the big thing is about being critical in this space is what people need to understand first is nothing happens in this without a buyer. Our main business, our core business, is actually finding a buyer for these people’s timeshares. Nothing can happen until the buyer’s found. At that point, it’s up to the seller and the buyer to decide if they actually want to use a LTRBA-licensed real estate agent … which, they’re a great group … or a affiliate cash out a timeshare brokerage firm we send people to if they want to. They really have a choice, because a lot of the timeshares are different than typical real estate.
What we want to do is make sure that the transaction from finding the buyer, the transaction actually happens, because there are so many different caveats to the timeshare industry that people don’t really understand. You need the brokerage firms, you need the advertisers, and you need specialized title companies.
Mark: Okay. Let’s talk about … You’ve been in timeshare for at least the 14 years that you mentioned that Buy A Timeshare’s been around. Was it Buy A Timeshare then, or has it always been BuyATimeshare.com? Because that was pretty early days for internet still.
Wesley Kogelman: Yeah. We actually had vacation property resales back then, but we had all these other domain names that directed right to this. BuyATimeshare.com is part of that domain name. That’s when we really started focusing on the buyer, and that was years and years ago, probably nine years ago.
One thing that happened in this space, everyone was aggressing attacking sellers, to the point where no one had a way out. The resorts don’t help them. Brokerage firms don’t have the means to advertise aggressively and take hold of this new technology, like search engine optimization, pay-per-click, which is paid advertisers on Google you’re very familiar with, and Yahoo and MSN. You need to capitalize on that space. That’s really what allows people to get their property seen, is by those means of advertising. We really pool the resources to spend the money on these new technologies.
Mark: Timeshare has been around for well over 30 years. The secondary market has never really fully blossomed in terms of sellers getting what they perceive as value for their timeshare. Would that be a fair assessment?
Wesley Kogelman: Oh, absolutely. That’s the major problem in the business. Back in the day, they may have been sold as investments, and they’re not a monetary investment. They’re an investment in lifestyle. The whole business, especially in the last 10 years, has completely changed. I’m really, really seeing a shift in the market right now that a lot of the legacy resorts, resorts that the owner base is over 65 years old, really see a reason why they want to create a resale channel, a legitimate one, by utilizing these new technologies.
Mark: You point out one of the initial problems with the resale industry. I agree with that. People left owning timeshare with an unrealistic expectation of what they might get at the other end of their timeshare experience, when they want to sell.
Wesley Kogelman: Absolutely. We say your timeshare’s only worth what someone’s willing to pay for it.
Mark: Right. To jump ahead a little bit, on the flipside of that equation is the impact that the postcard companies have had on the secondary market, which totally throws that realistic buyer, realistic seller equation out of kilter, because now the market is flooded with dollar deeds.
Wesley Kogelman: Absolutely. It does cause a real big problem. It causes a huge problem. The unfortunate thing is the customer is happy because they’re out of the timeshare. I look at this … and I know you’re going to have them on your show in upcoming weeks, that’s great, but … I look at it as being you’re not really helping the industry out, because you’re not getting a new type of buyer, which is a Gen X-er or a Gen Y-er, into the vacation ownership industry that could be a potential … You got to create the legacy for the vacation ownership industry. A lot of these postcard companies are just putting these deeds in Viking ships and then bankrupting the corporation, which doesn’t help anyone. You have to look at it as just [crosstalk 00:09:57] …
Mark: Right, it just dilutes the HOA. It puts a burden on the remaining members of the HOA.
Wesley Kogelman: I 100-percent agree with you. Everyone has to pay for that, because then the resort is going to have to foreclose on that property, get the inventory back, and they have the extra cost of the foreclosure fees. The big problem is it’s just an added expense. The current owners that are going with these postcard companies’ exit, yeah, they’re happy. The problem is they’re raising everyone else’s dues. I have to say that it’s because the resorts, from my opinion, the resorts created this whole market, because they didn’t handle the whole resale process the way they should have.
Mark: Right. They’ve had a vested interest in the developers and in developing new timeshare. The HOAs don’t necessarily have the marketing prowess or desire to sell what’s already been sold.
Wesley Kogelman: Right. At the same time, those sellers, they stopped going to the resort for answers because the resort doesn’t have it, or the HOA, or the management company for … Management companies are really the ones that would take care of this. They stopped going to them because they didn’t have solutions. Then they would go to the postcard company. In recent years, the by-owner advertising companies that are out there, doing the wrong thing. It gave the whole industry a bad reputation. [Crosstalk 00:11:26] …
Mark: What are some of the things that the for-sale-by-owner industry have been perpetrating that you countenance as bad?
Wesley Kogelman: Right. So much of the publicity out there on news articles is don’t pay that dreaded upfront fee. I’m a for-sale-by-owner guy, and I’ve been in the business a long time. I know if you buy a brand-new Marriott, 50 percent of that money you’re paying to the resort went toward marketing costs. Brokers are great. Hey, they do a great job. They have the correct contracts for timeshare, but they don’t have that money to advertise aggressively. The normal buyer or the person at the resort that’s doing some research on their smartphone, they’re not going to find that broker. They’re going to find someone like me. You know what I’m saying?
Mark: I do, but I want to go back. What are some of the things that the for-sale sector has been accused of that you think is creating a black eye?
Wesley Kogelman: I think the for-sale-by-owner sector created their own black eye for a lot of the practices many people were doing. Promising buyers, saying, “Hey, we have a buyer for 30,000 dollars. Just send us four grand for closing costs.” That’s a big one. I guess that’s still going on right now. It’s just promising sales in 30 days, and overextending themselves, and charging people all this money. Then they’re out of business. The Department of Agriculture and the attorney general has done a good job going after these people, but the real criminals pick up and move every month, so you’re never going to catch up to them.
Mark: You think Florida’s new law is going to have any impact on the abuses?
Wesley Kogelman: I think ARDA’s new law, for us, we actually took that law and embraced it and use it everywhere, all over the world. If you called me from Australia and you wanted to sign up, yeah, you will pay an advertising fee. We do put that to use immediately, where you can see your ad, you can see … We actually SEO individual people’s ads. We use that advertising dollar, and we’re all over the place.
I think the legitimate companies, like myself, use that law and embrace these laws to make your practice better, make your customer service better, make the whole thing … protect your consumers, data protect everything. That’s what we’ve done. We’ve developed systems around this. If someone pays us, they pay themselves. None of my people touch credit cards. We’re so compliant. I’ve used this as a real propulsion to make us a heck of a lot better. I’m all about the ARDA laws, what they’ve done.
Mark: As a for-sale-by-owner … and none of your people are licensed real estate brokers. Is that safe to say? Or, do you have any …
Wesley Kogelman: For Buy A Timeshare, they are not. Correct.
Mark: Okay. That means they cannot consult, for instance, on price for a seller, can they?
Wesley Kogelman: No, absolutely not. That’s one of the things that owners really want to hear, and owners really push my reps. I’m actively involved in my training process, especially with all this. Owners will push reps to try to tell them, without doing any research. We have a set of three questions that … You can’t [inaudible 00:15:03] anyone on a high price, because if I told someone their property is worth 30 grand, that’s really bad. That’s what a lot of people were doing. If I told them that it’s worth two grand, that’s still pricing their property. Either way, you can’t do.
We have a series of questions that we actually straight-out say to owners that, “Hey,” … this is the tagline exactly … “you have to understand we’re a for-sale-by-owner advertising company. It’s illegal for us to price your property or give you a time of sale.” That’s after we ask three questions. “How much would you like to get?”, right away. If the person tells us, that’s what we advertise it for. Then, “How much would you like to get? How much did you pay? Are you looking to get what you paid for it?” If they say, “That’d be great,” move on. If they keep pushing the rep, which most people do, we simply say, “We’re for-sale-by-owner advertising,” to make sure that they know we’re not a broker, “and it’s illegal for us to price a property and give you a time of sale.”
Mark: Wes, let’s go back. Let’s almost role play this for a minute, because you and I both know, unless it’s a Four Seasons, a Marriott, a Hyatt or something, one of the top premiere brands, most of the timeshare on the secondary market probably has a value in the, let’s say to be generous, 1,000- to 4,000-dollar range. I think that would be fair and generous, wouldn’t you?
Wesley Kogelman: Fair and generous, but then you have those, like you just said, the Marriotts, Hyatts, Hiltons, Wyndhams, that do really well.
Mark: Let’s not talk about those. Let’s talk about your Chevys of timeshare. Let’s talk about your just basic, okay location, non-name-brand, decent timeshare, decent location, but nothing out of the ordinary.
Wesley Kogelman: Yep.
Mark: They bought it new 12 years ago for 15,000 dollars. It was real estate. In their mind, it could be worth 30,000 dollars or at least that 15,000 dollars, in their mind. You and I both know it’s worth three grand. What is the conversation like when they call up and they say, “Yeah, I’d like to get 25,000 dollars, but I’d probably take 15 at this point.”
Wesley Kogelman: “Then what would you like to get?” That’s exactly how it goes. “How much would you like to place your property on the market for?”
Mark: “I’d like to sell it for 25,000 dollars, but that would be asking, so I’m willing to negotiate from that. I’d like to put it up for 25,000.”
Wesley Kogelman: I put it up for 25,000. You’ll get offers. Obviously, people are going to put in less. You can always reduce your price at any time.
Mark: What would my listing fee be, then?
Wesley Kogelman: Six hundred bucks. Advertising fee. We don’t list properties. We advertise them.
Mark: The advertising, okay.
Wesley Kogelman: There’s a correlation. Yeah, we are an advertising company [inaudible 00:18:05]. If you wanted to put it for a million, we’d advertise it for a million. If you want to put it for a dollar, we’d put it for a dollar. It’s what you want to put it for, Mark.
Mark: At that point, the conversation we just had, and of course you adhering to the law, you and I both know that 600 dollars is never going to amount to an offer anywhere close to what I’m hoping for. How long will my listing be up?
Wesley Kogelman: Until it’s sold, if you’re active. If you haven’t called us and you haven’t reduced your price within 12 months, it’ll come down. It’ll stay active if you continue to lower your price and work and do things to your online account, because we have a free online account where you can see traffic to your property and all this stuff. You can lower your price. You can add a resort description, reviews, and all this. If you have zero activity, then it’ll come down after 12 months.
Mark: Does BuyATimeshare.com act in any way as a middleman, fielding offers? In other words, if somebody offers 500 dollars? Or, is that just done … do they click on my thing, and it comes right to me without you guys in the middle?
Wesley Kogelman: Yeah, exactly, Mark. That’s exactly what we do. What happens is every person gets a ad. It has pictures of the resort and everything. There’s an “ask question, make an offer” icon on your individual ad. At that point, unlike other companies out there that I’ve always disagreed with … They would funnel that to a brokerage firm so they could possibly negotiate a commission. Immediately, it’s all processed through our technology. We’re big on technology here. It automatically goes to the owner.
In fact, we protect not only the seller data but the buyer data from phishing scams, like the Nigerian scams that happen. They have to actually log on to an online account and accept, decline, or counteroffer, so we keep a track of what’s going on in our system. If anyone’s trying to phish for money in scams, we block them immediately. We have CAPTCHA software, so robots can’t do it. We’ve really done our very best utilizing technology to protect not only the buyer but also the seller. More importantly, the seller.
Mark: You’ve mentioned a couple of the technology aspects of this that I find interesting and I’m going to want to talk more about. If I were at a presentation, I know I would be whipping out my smartphone to see what kind of pricing I could get for the same inventory. How do you think the developers are going to respond to that?
Wesley Kogelman: They definitely don’t like it. I’ll tell them that. The resale market is a product of their unwillingness to handle the resale problem. The only reason I exist as a for-sale-by-owner is because I found a better mousetrap on the resale. They haven’t even put a mousetrap in place yet. These postcard companies that are doing them, they’re making the customer happy. That’s a byproduct of them not handling business.
Mark: Starwood and Marriott tried a number of years ago to put in a strong second resale program that died very, very quickly.
Wesley Kogelman: Right. They are really good at selling product at that resort. They have awesome salespeople, probably the best in any sort of industry whatsoever, but this is a different thing. We’re dealing with major technologies, search engine optimization, advertising. We’re going after the people that want to buy, instead of trying to force something down their throat. The people that want to buy that are sitting at the table at a resort, they go to us, research, they find out an owner’s asking six grand. The resort’s trying to pitch them 45. They make an offer right on the website while they’re at the resort presentation.
That does happen, but the resort’s benefitting, because A, you’re getting someone out of the product that’s not happy, and B, you’re getting a new type of buyer in a Gen X-er or a Gen Y-er that’s going to pay the assessments and the dues and everything. They’re going to pay. They want the product. That’s why they bought it. They want to buy it. It wasn’t forced down their throat.
If you look at the new data, the American Resort Development Association, the AIF data, people are really happy buying resales. More people are going resale, to by-owner companies like us. They feel comfortable with the [inaudible 00:22:30] companies that are out there. They enjoy the product, they want the product, and they pay the dues. They almost trust the resale companies now, the buyers, more than the developers. This is some interesting data that just came out.
Mark: What do you think the developers should do to respond to this? How would you fix things, if you were inclined to?
Wesley Kogelman: I don’t think the developer is going to do anything. I think the attack is to really go after the management companies and HOAs, and create a certified reseller program that may look like that management company or HOA. We use our technologies and what we know in marketing efforts to do that for them and create it for them, and really protect their owners so they don’t go off to these frivolous companies that are only out there to make the quick buck.
Mark: Rather than that driving you out of business, you would like to be part of the solution.
Wesley Kogelman: Absolutely. That’s the only way we can all work together. I keep the integrity of that business model separate from my own business. This is what I’m trying to do right now with HOAs and management companies, especially management companies. They’re actually really willing to listen. I don’t want to take the credit and say, “Hey, it’s Buy A Timeshare running the technology.” Who cares? I have the technology. I don’t care if it looks like a management company. The thing is, you want to protect your owners and give them a option. I’ve developed the system to do that, so why don’t we work together? I’ll provide the marketing. You funnel it to your own brokerage firm or your resale firm. A lot of the times, they do have resale brokerage at the resort, but the problem is they don’t execute. A lot of
Mark: Wes, let me take a break right here. We’re talking to Wes Kogelman, founder and CEO of BuyATimeshare.com. You’re listening to Talking Timeshare here on Radio Slot. Back after these messages, and we’ll talk a little bit more about the secondary market and the developers.
Mark: Welcome back to Talking Timeshare. I’m your host, Mark Silverman. Got a full program today. We are chatting this hour with Wes Kogelman, founder and CEO of BuyATimeshare.com. Wes, let’s talk about the developers for a minute. The secondary market, a lot of people obviously are going to agree that the pricing is so much more aggressive on the secondary market. If the developers don’t have the motive to create new timeshare, where’s that going to come from, ultimately?
Wesley Kogelman: I think ultimately they move on and build another project. That’s the whole problem. If you have some of these legacy resorts, the owner base is 65, 70, their kids have been going to the same place, the children don’t even want the liability because the resort hasn’t changed in a long time. You really need a new type of owner to come in and pay assessments and build HOAs so you can renovate that resort.
It is tough. Certain resorts are sold out on their best possible weeks, and they have salespeople that can’t even sell their best season weeks. If they work with a company like mine, they would actually be able to see those people, their current owner base, that would want to sell, that they could actually use that inventory to sell at the resort, which would make sense, because then you’re getting a new owner and you’re getting new people spending money. That’s what needs to happen.
Mark: As a listing company, how much of a consultative role can you play in the transaction, helping somebody select region, size of unit, even developer?
Wesley Kogelman: You definitely have to change your business model a little bit. That’s what we’re looking to do. We’re seeking people that are really wanting to find a solution and work to customize a business model that works for that management company, that HOA, that developer. Through our technology, their strength, utilizing their core competencies and our core competencies, to work together.
Mark: Putting everybody’s motives into the best possible light, if I go to a presentation and I’m speaking to someone with a real estate license representing the developer … because ultimately, at any timeshare sales presentation, you’re going to be in front of a licensed real estate person at some point, whether it’s a [liner 00:30:29], closer type setup, the closer’s going to have the license, right?
Wesley Kogelman: Correct.
Mark: Okay. He can consult, rather than just give information. Ideally, they would be helping me to choose the right size unit for me. For instance, I’ll admit, 20 years ago when I bought my first timeshare, I did buy on the secondary market. I thought I was pretty smart. There were four people in my family, and we weren’t going to be growing our family. I got a one-bedroom that sleeps six. It’s done okay for me, but I’ve regretted that one aspect. A two-bedroom would have traded even better than my one-bedroom. If I had somebody really … Since I’ve never gone to my home resort, exchanging was very important to me. If I had a professional consultant rather than an order taker, I might have ended up with a two-bedroom for maybe a couple of dollars more.
Wesley Kogelman: What my personal opinion is that the resort salespeople really don’t take on that consulting role. Their job is to sell a product to the person that that person will buy. You went out and bought a product that you thought you wanted. Okay, so you bought it. The resort salesperson wants to get you into the most expensive product and make you spend as much money as possible. The resort salesperson would probably put you in a, if they were available, a five-bedroom, five-bathroom.
Mark: You know, that’s easy and almost a little cynical to say, but I have to say … It’s been a while that I’ve been on the other side of the round table, but what I was pretty surprised at at the end of the day, that every buyer that left there was basically getting the same price for the comparable inventory. In other words, it’s not like selling a car. If I would pay 2,000 dollars over sticker, you might be able to get that same car for 100 dollars over sticker. At the timeshare sales, at least that I’ve been involved in, they might be getting a different season or they might be getting … Their two-bedroom in the same season was selling for the same price across the board.
Wesley Kogelman: Right. I understand what you’re saying. At the same time, if you’re dealing with a licensed real estate agent … With some of our for-sale-by-owner people, we find the buyer. Ultimately, to close a deal, most owners aren’t very comfortable negotiating themselves, the paperwork, the right title company, if you can’t necessarily use the title company that you closed on your house. They look for questions. That’s when we send them to a licensed real estate agent. Those agents will be the ones that find out how many people will be traveling and all this, and try to get them in the right possible product.
With that being said, I think on the resale market, the brokerage takes a consultive role in that. Like you said earlier in the program, these people are at the resort using their smartphone, doing research before they buy what that resort developer salesperson is trying to get them in the product, to see comparative prices. We really can piggyback on each other and help the whole vacation ownership industry, if it’s done properly.
Mark: Many of the developers, in attempt to hold onto their market share, have withheld certain perks from the secondary market. Marriott Rewards, for instance, you can’t get if you’re buying from another owner.
Wesley Kogelman: Yeah, or like VIP membership at Wyndham. These people with these huge point packages will come to us to get more points. They’re already a VIP member, so they get more points buying, say, 500,000 points, on the resale market at a discounted rate. They’re already a VIP member, so it doesn’t matter.
Mark: Right, they still have the same privileges.
Wesley Kogelman: Exactly.
Mark: Speaking of points, what are you seeing in terms of trends for buyers? Are they gravitating towards points more than weeks, or locations? What do you see?
Wesley Kogelman: Definitely locations. Point systems are popular because every time they go to the resort, the resort’s trying to up-sell them on a point system. People are inquiring. They may have not had the great experiences like you have had with trading their initial timeshare. They think that there’s a perceived value in going to a point system where they may be able to trade and utilize it in a better fashion. Most point systems, like if you’re talking about Marriott, you’re going to be able to use that Marriott Vacation Club at all their Marriott locations. They’ve created their own exchange, which is nice. It’s a good product. They take care of business.
Mark: Do you find points to be as flexible as the industry would have you believe?
Wesley Kogelman: I don’t find anything as flexible as the industry would have us believe, but if you’re knowledge and you utilize the points in the way, and you actually do your research, you can use them in the right way. One of the point systems that is great out where you are is WorldMark. You can transfer within owners. There’s times we’re helping people out, we’ll pay their maintenance fee, take their points, sell them to a broker, the broker will rent them out. Inter-owner transfers can happen. You’re really getting different people into the resort. It really seems to be one of the better point systems that’s flexible for the owner with the consumer at mind, not necessarily, “Hey, I want to monopolize my point system.” It’s really about being consumer-centric.
Mark: When you’re using points for an exchange outside of your family of resorts, are points points and points? In other words, now it doesn’t matter whether my points come from Wyndham or Marriott, or Indiana or Hawaii, because if I’m putting in 10,000 points, even if it’s four weeks’ worth of my timeshare versus one week at a studio in a Four Seasons, isn’t it now just 10,000 points in the exchange system that trades for 10,000 points of value?
Wesley Kogelman: You would think that, wouldn’t you?
Mark: That’s why I’m asking.
Wesley Kogelman: I don’t believe it actually works that way. I think if you’re trying to get a Hawaii week in Kaanapali, and you have a great Florida ton of points, you’re still going to have a tough time. I don’t think it works as clean as it’s supposed to.
Mark: Why would that be, do you think?
Wesley Kogelman: The way they set it up. You’re asking me questions here that I believe that … The resort’s idea is to monopolize. They’ve been everything from legislation to point systems to stall this resale process that I’m in, to get rid of it. They’ve done everything possible to look at the developer and protect the developer without necessarily protecting the consumer.
If you listen to the complaints some of our people have on the phone, our customers, it’s all across the board. We’re dealing with people that are not happy with the resort, not happy with the exchange value, they got up-sold a point system, they still can’t exchange, and they just want out of this thing. Or, you have the people that really do the research and know how to utilize it and plan ahead to get the exchange they want. A lot of people want to exchange, “Oh, I want to go on vacation in a month.” You can’t do that. You have to plan ahead, I say, six months, to get what you want.
Mark: Okay. What are you seeing in terms of … Because you do rentals, also. Do you see any trends in the rental market that we would find interesting?
Wesley Kogelman: Yeah. The rental market’s an interesting market, where the owner base can always change their confirmation number. The only way to make rental of a timeshare really, really work perfectly is lining up, making sure … what we call … it’s clean and pressed. The exchange companies get a certificate right from the resort that holds the week, so the owner no longer has the ability to change confirmation numbers, because they can scam. You have rental agreements and all that.
Most of our offers, we get … not on a number basis but on a percent of offers … we get a lot of rental offers. We’re very transparent. We’re a for-sale-by-owner company, so we don’t sell properties. We find buyers. We do work in connection with title companies, brokerage firms, all over, that we actually want to make sure that we get proof that the property transferred, for our customer service.
When we get that proof from a property we’re marketing, what we’ll do is we’ll scan that item in, show exactly what it sold for, and put market as “seller found a buyer,” which is a “for sold” sign, and the exact amount it sold for. That’s on the top of our website under “recently sold properties.” We also publicize every live offer, rental or buyer offer, on our website, so you can actually see those. That’s live. That’s not manipulated. That’s exactly what’s happening to date. You’d make an offer, and you’d see it up there.
Mark: What’s the transaction cost to do a rental? If I wanted to rent my week out through you, what would I be looking at?
Wesley Kogelman: It’s for-sale-by-owner, so whatever the owner is asking.
Mark: No, but there’s a fee you charge for rental.
Wesley Kogelman: Oh, it’s typically 299.
Mark: 299, and that gets me a similar marketing package that you talk about when you’re listing?
Wesley Kogelman: When you’re advertising, correct.
Mark: Okay. All right. Again, it’s a weekly rental rate that I establish.
Wesley Kogelman: Correct.
Mark: All right. If I find a renter, the dollar amount, there’s nothing else that you take out except that 300 dollars that I paid upfront?
Wesley Kogelman: Because you’d be the one having the conversation with the owner. We have rental agreements we can send you to make sure, but the big thing is you’d be negotiating with the owner through our system so we can keep track of the conversations. My whole goal is to be as transparent in this industry as possible. We want to keep track of the accepted, decline, counteroffer, what’s happening, making sure that the offer is getting to the owner and they know to log in to their account to accept, decline, or counteroffer, protecting them, making sure that they’re not going to get scammed by another … There was a phishing scam that acted like the person was one of the big title companies out there. We were actually reporting it back to their lawyers and everything so they could catch them. Our major focus is really protecting our owner base and the vacation ownership customer.
Mark: Wes, in your opinion, what is the ramification for an owner … say, like you said, they’re Boomers or whatever, or they’re in their 70s and their kids don’t want it, their grandkids don’t want it … What if they just walk away from it? What’s the ramification?
Wesley Kogelman: The resorts have been known, not all of them, but if you walk away from it, you don’t pay your dues, it’s like walking away from a credit card debt. They’re going to report it to your credit, and ultimately it’ll get foreclosed on, which costs the resorts money to start the foreclosure process, anywhere from, I’ve seen 900 on average to 3,700 dollars, that it costs the resorts in legal fees to foreclose on it. Ultimately, those fees have to be tacked on somewhere, so it goes to the owner.
Mark: I have a woman, though, for instance, who emailed me. She’s 88. She had said to me in email that she’s not long for this marble here. Her kids don’t want it. She’s not buying a house. She’s not buying a car. So what if they put a blemish on her credit report?
Wesley Kogelman: Right. I agree. She’s smart.
Mark: No, she’s worried. I’ve been trying to tell her. She’s worried, but there’s not a real downside to it.
Wesley Kogelman: No, there really isn’t. The good resorts right now, legacy or not, are having hardship programs where they’ll take some of the deeds back. That’s so it doesn’t go on these Viking ships that you were talking about, the postcard companies. That new Florida law is actually creating an obligation. If you’re a brokerage firm or involved in this process, and that supposable buyer and that property gets transferred to someone that’s not going to pay maintenance fees, it can be up to a 10,000-dollar fine. I think even Colorado … I may be mixing up the laws … it’s a criminal offense, and you can get a felony for it. If I transferred a property into a company or a shell company that’s not going to pay maintenance fees, they’re really locking … That’s, again, to protect the developer, I think, but it’s not fixing the problem.
Mark: One of the things, Wes, that intrigues me about the guest coming up next week is when I was speaking to the representative that has persuaded them to come on, and we were talking about some of the practices of the postcard companies and other companies in her sector, she brought up, she was the very first one to bring up the Viking ships, which surprised me coming from her, and saying they don’t do that. I’m intrigued to find out what they do.
Wesley Kogelman: Yeah. I don’t know what company you’re talking about, but some of them do them right. They’ll get rid of them on eBay, or there is a lot of weird stuff that goes on. To be honest, I’m not in that business. I’m actually trying to give people a viable way of getting out of these the right way, even if they’re at the development and they buy from me instead of the developer on the sales process. That’s okay. We’re creating a product they want, and at least we’re creating a solution. I haven’t gone to the exit. I don’t have a problem with what they’re doing, because the resort hasn’t taken care of the problem. You know what I’m saying?
The customer’s happy. All these customers that exit and their property goes on a Viking ship, they’re all happy. I don’t have anything to say about that. However they run the practices, they’re doing them on eBay or whatever, then initially you’re talking about the zero-dollar timeshare, so it brings down the complete market in value of any timeshare.
Mark: Right. Right, right. From your seat on the sideline, have you heard of many reports where the postcard companies take the 4, take the 5,000 dollars and don’t even put it on the Viking ship? Two years later, the owner finds they still have that deed, and it’s still in their name, and they’re still being done for fees, for management fees?
Wesley Kogelman: On the exit programs, relief, I have not really heard that, but I have heard it out of tradings, in Mexico, especially. I think they’ve cleaned it up as of late. For the exit companies, there’s a couple big ones out there that I can’t argue with them. I think they’re creative. They found solutions for these customers. I don’t have anything bad to say about them. I’m not the developer. I’m not eating the cost. The customers are happy. I don’t know. It’s not good for the industry as a whole, but they created a solution, and they’re creative in finding ways to do things. I don’t know what to say. I don’t really have thoughts on that. As long as they execute and the customer’s happy, I don’t know the answers to that.
Mark: Wes, when we come back, we will look at some of your thoughts and ideas on how to fix this whole thing. We are talking to Wes Kogelman, CEO of BuyATimeshare.com. You’re listening to Talking Timeshare here on RadioSlot.com. Back after these messages.
Mark: Welcome back. You are listening to Talking Timeshare. I’m Mark Silverman. Best program on Radio Slot at this moment. We are chatting with Wes Kogelman of BuyATimeshare.com. Wes, in a true fair market, who would you see as the players and resources available to someone buying and selling timeshare, and what roles would they play?
Wesley Kogelman: I think any company that’s going to advertise aggressively and do what they say is one of the solutions. I think you mentioned the LTRBA, which is Licensed Real Estate Brokers Association. That’s a great group of brokers. I actually talk to a lot of them all the time. They were against the advertising upfront fee thing for a while, and maybe they still are, but there’s more bad people than good people. Finding a buyer is key, and that’s why we work with these guys, because we have good buyers and sometimes we have good inventory that they can find for their current buyers.
Then you have to go through a legitimate title company to actually move these. There’s a three-prong approach. Not only that. The fourth prong of this is the resorts try to stop these resale transactions by holding estoppels, not getting estoppels in time, slowing down the closing process. Sometimes a buyer backs out because it’s been six months. In order to really do this right, you need to be able to use all these four prongs in the right way and funnel the business so the transaction is executed.
Really, we need the developer or the management company to work on moving the product through the resale channels and making sure the closing happens in time. It amazes me that you can go to a developer, buy a timeshare right then and there, it’s closed, done, tried and true, but yet if you buy it on the resale market, it takes six months. Doesn’t make sense.
Mark: Do you think they should adopt something like the car manufacturers, where you have a network of new and used car dealerships usually on the same land?
Wesley Kogelman: One of the things I’m looking to do is work with the management companies, the HOAs, and really try to figure out a way they can execute the transaction as fast as possible, transfer the deed as fast as possible, pull the estoppels quick so it’s all right there. Maybe even as soon as a person advertises their property, the estoppel request … and there’s an expiration date on it … is there, so the transaction can happen seamlessly. That’s what I’m working on.
Mark: Have you talked to developers at all about setting up a secondary market, working with them to set up a secondary market?
Wesley Kogelman: This year, I’ve got a great team behind me, and we’ve got a great direction going, a great PR guy. Yeah, we’ve actually been working on this, and we’ve had some … handling it differently than other people have handled it and utilizing our core competencies with their core competencies to really try to make this a seamless transaction. For some reason, more than other years, they’ve been open to some of our ideas. In fact, in the next week, I have two proposals going out to two good groups.
Mark: If you were referencing, by the way … You were just able to recruit Steve Luba into your team.
Wesley Kogelman: Absolutely. He’s amazing. He’s an incredible writer, a really great guy, and one of the best PR people in the business. More good news about vacation ownership needs to be put out there. Unfortunately, sometimes we only see the bad. Even from the resorts, we need to talk about some of the good stuff, because there are a lot of happy owners. Some of the AIF studies and ARDA show that 85 percent of all ownerships are happy, but the other 15 percent are louder.
Steve does a great job of putting a positive spin on this and putting us out in the forefront, because we are really trying to get as many buyers across our website as possible. We want those people that want to buy. They know what they want. Let’s get them into a great product for less expensive that they’re going to use and enjoy. Then their families, their kids, will know they enjoy the product and buy into the product, instead of the 88-year-old, “Oh, this has been a pain. I keep paying. I can’t get out of it.” Their kid doesn’t want that, because they’ve seen the trouble their 88-year-old mother has gone through. They don’t want the product.
Mark: Wes, just out of curiosity, did you get any sense in the 14 years of the general media’s coverage of timeshare? Do you see any changes, any trends in that?
Wesley Kogelman: Yes. In the past four years, there’s been a really negative trend, all over the place. It’s all been negative.
Mark: Does that coincide with the economic downturn?
Wesley Kogelman: That did coincide, absolutely. It absolutely did, and it coincided with the companies that aren’t doing the right thing the for-sale-by-owner company, they’re charging advertising fee and not advertising, not doing anything. You can’t even find them on the internet. Or, telling people they have buyers.
Right now, those guys are gone, and the ones that aren’t will be soon, because of the new legislation. They can’t maneuver around the legislation and embrace it because of their technologies. They haven’t spent the money in developing technologies and being compliant. Those are my two biggest focus areas in this company, and then it’s all marketing and putting a positive spin on things. The last three years, you got the downturn of the economy, absolutely. There’s been negative, but I’m seeing that spin a little bit better.
Mark: Wes, I want to thank you for joining us today. I really do.
Wesley Kogelman: Thank you, Mark. I appreciate having me on.
Mark: I have a hunch we will be visiting again before too long.
Wesley Kogelman: All right. Sounds great.
Mark: All right. You’re listening to Talking Timeshare here on Radio Slot. I’m Mark Silverman. My guest this hour has been Wes Kogelman of BuyATimeshare.com. We will talk a little bit more about that and other issues in hour number two. Come on back after the break