GRAND RAPIDS, Mich. (WOOD) — Like many of us, Victoria VanderVeen fields plenty of unwanted sales calls, but this one was new.
“Are you planning on selling your home?” the Grand Rapids homeowner quoted the caller as saying.
“I said, ‘Oh, no. I’m going to be here till I’m dust,'” said VanderVeen.
But the caller kept going.
“We’ll give you $875 now if you can guarantee that when you do go to sell your house, you will give it to us (to list),” VanderVeen remembered the caller saying.
The agent on the other end of the phone worked for MV Realty, a Florida-based real estate company that’s licensed in 33 states, including Michigan.
MV Realty told Target 8 it started offering its Homeowner Benefit Program in Michigan in mid-2021, inking its first contract in June of that year.
The company, founded in 2014 and headquartered in Delray Beach, Florida, describes itself as a residential real estate brokerage.
LOCKING IN 40-YEAR CONTRACT
VanderVeen was suspicious when the firm offered to dispatch a notary to her home so she could sign the contract.
That’s when the Grand Rapids homeowner called Target 8 to check on the company and the deal it was offering.
When a notary 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 speaker phone to walk the homeowner through the 15-page contract.
“So most realty companies, they use their marketing dollars for commercials and ads,” said Kai Woods, the agent with MV Realty. “Instead of us taking those marketing dollars and using them for commercials and ads, we pay them directly to you as the homeowner. In return, we ask that if you ever decide to list the home in the future, we will be the realty company to work with you exclusively in order to get your home listed and sold.”
It’s a 40-year contract, and even if you die, whomever inherits your home is also locked in with MV Realty.
Upon the home’s sale, the company, which has six months to make the sale, receives 6% commission if no other broker is involved. If the home doesn’t sell in six months, the owner can list it at the same price for 60 days.
If that fails too, the listing goes back to MV exclusively.
ATTORNEY, BBB URGE CAUTION BEFORE SIGNING
“It’s not illegal,” real estate attorney Karen Wonsetler told Target 8 in a Zoom call. “It’s a clever idea to tie down an owner for an exclusive listing.”
But Wonsetler urges homeowners to exercise extreme caution before signing.
“Especially with a notary present. That should set off some red flags that this is an important legal document that’s going to be with you for years, decades. Understand it before you sign it because there’s not really an ‘out’ clause,” she said.
Indeed, if you decide to back out and find your own realtor, you’ll owe MV a termination fee equal to 3% of your home’s estimated value.
“You take a few hundred dollars in now, for what may be thousands of dollars in expenses later for nothing other than the fact that you signed that paperwork. … (You) may want to negotiate a better listing agreement at some point in the future. … You want to hold on to that contractual right to negotiate, to bargain, to get the best deal, to get the best realtor. You may be signing on with someone who, 20 years from now, has a horrible reputation or is far more expensive than if you would have waited to enter into a contract in the future,” explained Wonsetler, noting the contract is publicly recorded.
“This document is going to come up, and (MV Realty) can come, hand outstretched, and say, ‘Give us our commission.’ Whether (MV) worked a single minute or an hour on selling this property, the owner said (MV) would be their agent, and, if it’s not, the penalty is the homeowner has to pay an additional commission. This is thousands and thousands of dollars at play.”
While Kai Woods, the agent who called VanderVeen, was thorough in her explanation of the contract the day of the notary visit, the Better Business Bureau of Southeast Florida told News 8 it’s received 20 complaints from homeowners who said they did not understand what they were signing.
If you search MV Realty on the Florida BBB’s website, it says, “this business profile is being updated.”
Cinthya Lavin of the BBB told News 8 that’s because the watchdog agency is currently investigating MV Realty after the firm failed to respond to complaints.
“MV Realty previously would always answer and resolve their complaints, but when we started noticing a pattern (of non-response), we decided to put a no rating on the company. … The pattern that we’re identifying from the consumers is that the contracts were not clear, and the contract has clauses that are locking people into terms that they were not aware of,” explained Lavin.
FIRM ENCOURAGES CONTRACT REVIEW, OFFERS 3-DAY RESCISSION PERIOD
Feintuch Communications, the public relations firm representing MV Realty, told Target 8 the company “was not aware that it’s under review by the BBB’s SE Florida office or any other location for that matter.”
“MV Realty’s goal is zero complaints,” wrote Henry Feintuch in an email to Target 8. “To this end, MV Realty makes the conditions of the HBP agreements clear before homeowners sign them. MV Realty welcomes all clients to have the agreements reviewed by their attorney in advance of signing and also provides a three-day rescission period during which they are free to have the agreements reviewed by counsel and canceled for any reason if they so choose.”
Feintuch said MV has paid more than $20 million through the Homeowner Benefits Programs to over 25,000 homeowners as of mid-year 2022.
At this point, Victoria VanderVeen will not be joining them.
She declined the firm’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 be dead, and then my kids 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 upped the offer to $1,200.
VanderVeen told Target 8 she’s holding out for $2,500.