Target 8: Owners received a cash offer for a 40-year right-to-sell contract

GRAND RAPIDS, Mich. (WOOD) — Like many of us, Victoria VanderVeen takes plenty of unwanted business calls, but this one was new.

“Are you thinking of selling your house?” the Grand Rapids owner quoted the caller as saying.

“I said, ‘Oh, no. I’m gonna be here until I’m dust,” VanderVeen said.

But the caller continued.

“We’ll give you $875 now if you can guarantee that when you go and sell your house, you’ll give it to us (to be listed),” VanderVeen recalled.

The agent on the other end worked for MV Realty, a Florida-based real estate company licensed in 33 states, including Michigan.

MV Realty told Target 8 that it began offering its homeowner benefits program in Michigan in mid-2021, signing its first contract in June of that year.

The company, founded in 2014 and based in Delray Beach, Florida, describes itself as a residential real estate brokerage.

LOCKING A 40-YEAR CONTRACT

VanderVeen was suspicious when the company offered to send a notary to her house so she could sign the contract.

That’s when the Grand Rapids owner called Target 8 to check out the company and the deal they were offering.

When a solicitor showed up at VanderVeen’s home on Burton Street SE, Target 8 was there to greet him.

He put the agent working with VanderVeen on speakerphone to walk the landlord through the 15-page contract.

“So most real estate companies use their marketing dollars for advertisements and advertisements,” said Kai Woods, the agent for MV Realty. “Instead of taking those marketing dollars and using them for ads and advertisements, we pay them directly to you as the owner. In return, we ask that if you ever decide to list the home in the future, we will be the real estate company that will work exclusively with you to list and sell your home.

It’s a 40-year contract, and even if you die, whoever inherits your home is also locked in with MV Realty.

When the house is sold, the company, which has six months to complete the sale, receives a 6% commission. If the house does not sell within six months, the owner can list it at the same price for 60 days.

If that also fails, the listing reverts exclusively to MV.

LAWYER, BBB URGES CAUTION BEFORE SIGNING

“It’s not illegal,” real estate attorney Karen Wonsetler told Target 8 in a Zoom call. “It’s a smart idea to tie up an owner for an exclusive listing.”

But Wonsetler urges owners to exercise extreme caution before signing.

“Especially with a notary present. This should set off some red flags that this is an important legal document that will stick with you for years, decades. Understand it before you sign it because there really isn’t an exit clause,” she said.

Indeed, if you decide to go back and find your own real estate agent, you will owe MV a termination indemnity equal to 3% of the estimated value of your house.

“You take a few hundred dollars now, for what can be thousands of dollars in expenses later for nothing more than the fact that you signed these documents. … (You) may want to negotiate a better listing deal at some point in the future. …You want to retain that contractual right to negotiate, negotiate, get the best deal, get the best real estate agent. You can sign with someone who 20 years from now has a horrible reputation or costs a lot more than if you had waited to sign a contract in the future,” Wonsetler explained, noting that the contract is on public record.

“This document is going to come, and (MV Realty) can come up with an outstretched hand and say, ‘Give us our commission.’ Whether (MV) worked a single minute or an hour to sell this property, the owner has declared that (MV) will be his agent and if not, the penalty is that the owner must pay an additional commission It’s thousands and thousands of dollars at stake.”

While Kai Woods, the agent who called VanderVeen, explained the contract in detail on the day of the notary’s visit, the Southeast Florida Better Business Bureau told News 8 that it had received 20 complaints of owners who said they did not understand what they were. signature.

If you search for MV Realty on the Florida BBB website, it says “this business profile is being updated”.

The BBB’s Cinthya Lavin told News 8 it was because the watchdog agency is currently investigating MV Realty after the company failed to respond to complaints.

“MV Realty used to always respond and resolve their complaints, but when we started noticing a trend (of non-response) we decided not to rate the company. … The pattern we identify with consumers is that the contracts weren’t clear and the contract has clauses that lock people into terms that they weren’t aware of,” Lavin explained.

THE CABINET ENCOURAGES CONTRACT REVIEW AND OFFERS A 3-DAY TERMINATION PERIOD

Feintuch Communications, the PR firm representing MV Realty, told Target 8 that the company “was not aware that it was under review by the BBB office in Southeast Florida or any other place for that matter”.

“MV Realty’s goal is zero complaints,” Henry Feintuch wrote in an email to Target 8. “To that end, MV Realty clarifies the terms of HBP agreements before landlords sign them. MV Realty urges all clients to have agreements reviewed by their attorney prior to signing and also offers a three-day termination period during which they are free to have agreements reviewed by an attorney and cancel for any reason. either if they wish.

Feintuch said MV had paid out more than $20 million through owner benefit programs to more than 25,000 owners by mid-2022.

At this point, Victoria VanderVeen will not be joining them.

She declined the company’s offer of $875.

“Too many red flags for me. I think $875 is pretty cheap for 40 years. I’m like, ’40 years?’ I’m going to die, and then my children will have to put up with this? I don’t think so,” she said.

A day after the notary’s visit, VanderVeen said MV called back and raised the offer to $1,200.

VanderVeen told Target 8 she was expecting $2,500.

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