“Licensees hold a position of trust in our communities and with this agreement, Colorado consumers will be protected from future harm,” Marcia Waters, the director of DORA’s Division of Real Estate, said in a press release. “All members of the public should be informed of the importance and long-standing ramifications of executing any documents which encumber or purport to encumber their property before signing such a document.”
The agreements allowed homeowners to receive up to $5,000 in cash in exchange for granting MV Realty exclusive rights to sell their property for the next 40 years. These agreements, known as “right-to-list” contracts, also enabled the company to place a lien on the homeowner’s property for 3% of its sale price.
For a median-priced home in Colorado, which was around $594,000 in August, this could mean MV Realty would recoup nearly $18,000, even if the homeowner only received a small cash advance.
The Division of Real Estate’s investigation reviewed seven specific claims but estimates that more than 900 Colorado homeowners could be affected by MV Realty’s agreements. Attorneys general from 12 states, including California, Florida, Illinois, and Ohio, have filed lawsuits against the company, alleging that it misled consumers.
Despite the backlash, MV Realty has defended its business model, calling the agreements “innovative.”