After attracting the ire of attorneys general in four states and receiving a warning from the Federal Communications Commission (FCC), right to list agreement firm MV Realty said it is pausing the signing of new Homeowner Benefit Agreements.
“MV Realty has voluntarily temporarily suspended entering into new customers contracts as we work to address the concerns raised by regulators and legislators. The Company remains confident that the Homeowner Benefit Program fully complies with the law and benefits consumers who receive a cash incentive to select MV Realty as their listing agent,” a MV Realty spokesperson wrote in an email.
The firm would not specify how long it plans to pause onboarding for new Homeowner Benefit Agreement clients.
“It is not surprising that MV would halt the program given the direct regulatory and legal scrutiny they are receiving. This often occurs in such situations,” Ken Trepeta, the executive director of the Real Estate Services Providers Council, wrote in an email. “I would suspect the program would remain halted until the regulatory and legal cases play out.”
Under MV Realty’s Homeowner Benefit Agreement, in exchange for a cash payment of $500 to $5,000, depending on the home’s value as determined by MV Realty, the homeowner signs over the right to list their home for the next 40 years to the firm. This means that if a homeowner decides to sell their house sometime in the next 40 years, MV Realty is entitled to list the home for a 3% commission, which is separate from the commission earned by the buy side agent.
If the homeowner breaks the agreement or decides to terminate the agreement early, the homeowner must pay MV Realty 3% of the property’s value at the time the agreement is signed.
The firm is currently facing lawsuits in Massachusetts, Pennsylvania, Florida and Ohio. The lawsuits allege that MV Realty misleads and confuses homeowners through its so-called Homeowner Benefit Program.
“MV Realty conceals in its marketing and sales processes material terms including its ability to foreclose on the home, that the company only acts as a ‘non-agent facilitator,’ and that if the heirs won’t assume the agreement after a homeowner’s death, MV Realty can foreclose,” according to the Massachusetts suit.
“A non-agent facilitator is a type of transaction broker that owes no duty of loyalty to the seller, has no obligation to seek the highest price the market will bear, and owes no duty of confidentiality to the seller,” the complaint reads.
In late January, the FCC called out MV Realty for what it called “an apparent homeowner-focused robocall scam campaign.”
MV Realty currently operates in 33 states and has more than 500 licensed agents. Since starting the program in August 2020, MV Realty says it has enrolled over 35,000 homeowners and has paid homeowners close to $40 million.