At least 43 Davidson County residents are among the 35,000 nationwide who have had MV Realty file a memorandum of agreement on their respective properties. These memoranda are part of the “homeowner benefits agreements” that have the states of Pennsylvania, Massachusetts, Florida and Ohio filing lawsuits questioning the legality of the practice.
In executing the MOA, the homeowner receives cash in exchange for this memorandum that is a 40-year – yes, 40 year – listing agreement. The cash the homeowner receives could be as little as $300 or as much as $5,000, dependent on the value of the home. It is not a loan.
Additionally, the MV Realty MOA is not a lien unless the owner defaults, but it is an agreement that runs with the land whenever the transaction closes as long as it closes in the next 40 years. If the owner hires another broker, the MV Realty commission would be paid first.
With the advent of the lawsuits, MV Realty has ceased the promotion of its homeowner benefits agreements until such time as it can work with regulators and legislators in making the program more compliant.
In any case, a 40-year listing is bordering on the outrageous, and many of these homeowners are strapped for cash and receive robocalls that are followed by a staff of some 500 licensed agents. Even with the 40-year listing, the owner is not under obligation to sell the property and only must pay the 6% when they sell.
A listing agreement of one year or less should allow the listing broker an ample amount of time to market and have the property under contract. At that point, the listing agent begins to navigate the seller through the appraisals, inspections and title work.
It would be challenging to see if whoever the listing agent is in 35 years has the experience to usher the seller through the process.
A home equity line of credit (HELOC) would be available to many of the owners in need of cash, although the MV Realty program does not include a credit report. In the case of those offering to buy homes for cash, the buyers of those houses eventually must sell, and for a profit.
In some instances, the current cash offer might be needed immediately and would benefit the owner greatly, more so than cash in 90 days. Or, the owner might lack the financial wherewithal or resources make the necessary improvements required to sell for more money. Every family has different challenges.
However, none of these are charitable organizations, so let the homeowner beware.
Sale of the Week
Those who drive on the Harding Place, not to be confused with Harding Road or Harding Pike, have noticed several contemporary homes under construction, several being 10 or more, with more on the way.
Located in Green Hills, but in close proximity to Belle Meade, the new homes are reaching their completion date and have begun to close.
Located at 3914 Harding Place is a 6,294-square-foot house that sold last week for $3,995,420. Built by Richland Building Parter and listed by Chris Harwell of Tarkington and Harwell Company, LLC, the property sold at $635 per square foot.
Sharon Kinser, who also is with Tarkington and Harwell, had the home co-listed with Harwell, and Tony Crabtree of Exit Realty Bob Lamb and Associates represented the buyer.
Richland Building Partners spared no expense in filling this six-bedroom, six-bathroom and two-half bathroom home with high-end, high-tech amenities.
Harwell and Kinser noted that the bold modern build features a signature pivot door that “opens to a wall of windows and floating stairs with glass railing and an out-of-sight prep kitchen.” Here “out-of-sight” refers to the visibly rather than the 1960s term meaning phenomenal, even though this property is that.
Harwell and Kinser described the primary suite as having a “spa-like, state-of-the-art primary bath and dual walk-in closets.” There is an additional ensuite on the first level. There also is a gated front entrance, and each floor includes a walkout deck overlooking the gunite pool and hot tub.
The house next door to this property, another Richland/Tarkenton similar in quality and design, has gone under contract and will be closing soon, as they are closing them as fast as they can build them.
Richard Courtney is a licensed real estate broker with Fridrich and Clark Realty and can be reached at [email protected].