According to the old saying, “there is no free lunch.” This is one of the key takeaways from “Rumpelstiltskin,” a classic Brothers Grimm fairy tale.
If it’s been a while since you last read the 19th century German fairy tale, here’s a quick recap: A miller boasts to the king about his daughter’s ability to turn straw into gold. The king summons the miller’s child and locks her up in a tower room with straw and a spinning machine. He threatens to have her executed if the straw isn’t turned into gold by the morning. The miller’s daughter attempts to spin the straw into gold but, just as she is about to give up, an imp-like man enters the room and offers to help her. In return, she must give him her first child.
The tale ends happily for the miller’s daughter, who goes on to marry the king. She also becomes queen. However, she discovers that there is always a price.
Let’s now put this in housing terms. Imagine that you are a homeowner looking for extra cash. Just like “Rumpelstiltskin”, there is a catch. You must sign an agreement that the firm has the right listing your home if you decide to sell it within the next 40-years.
“The way business is done today is that someone will sign a listing arrangement and it is valid for a certain amount of months — it might have four, it might have six, it just depends upon the market,” Ken Trepeta (executive director of the Real Estate Services Providers Council) stated. “If the home does not sell, you can renew it or move with someone else. This is not a lifetime commitment like the one in a fairytale.
MV Realty under fire
Some companies are turning to cash incentives and right-to-list agreements to attract new business as they look to modernize the way we buy and rent homes. MV Realty’s Homeowner Benefit Program is the most prominent example of this approach.
Based in Florida, MV Realty’s founder and chief sales officer Amanda Zachman is best known for her role as a contestant in reality TV series “Big Brother.” MV Realty’s unique business model was inspired by David Schiff, the founder and founder of Innovatus, who came up with the idea to package revenue from real estate agent commissions and sell it to investors. MV Realty filed a complaint against ICP in 2018.
The complaint claims that MV Realty’s attorneys first discussed the idea with Tony Mitchell, CEO of MV Realty, and Jonathan Neuman, co-owner of the brokerage. This idea would be the basis of MV Realty’s HBP (MV doesn’t package or sell its revenue to investors), despite the fact that a deal was never reached with Schiff.
Several lawsuits have been filed over whether MV Realty should be allowed continue its operations. Also, why the deal with Schiff was cancelled and ICP’s involvement in the matter. MV Realty proved that the idea wasn’t originally Schiff’s, and had been patented in 2008. This allowed the firm to continue its HBP. After a joint stipulation, the parties to the litigation with ICP reached a settlement in December 2022.
But MV Realty’s legal problems didn’t end there. Attorneys General in Florida and Massachusetts are currently suing MV Realty. These lawsuits claim that MV Realty misleads homeowners through its so called Homeowner Benefit Program.
According to the Massachusetts suit, “MV Realty conceals in marketing and sales material terms that it can foreclose on the house, including that it acts as a non-agent facilitator’ and that if the heirs don’t assume the agreement following a homeowner’s passing, MV Realty may foreclose.”
The complaint states that a non-agent facilitator is a type transaction broker that has no obligation to loyalty to the seller, does not have to seek the highest market price, and has no obligation of confidentiality to seller.
In exchange for a cash payment the homeowner agrees to MV Realty listing their home for the next 40-years. If a homeowner decides that they want to sell their home within the next 40-years, MV Realty will be entitled to list the house for a 3% commission. This commission is separate from the commission earned through the buy side agent. If the homeowner violates the agreement or terminates the agreement too early, MV Realty will charge 6% of the home’s appraised value.
Trepeta stated that in ten years, commissions could be much lower. “You never know what the market will look like in the future, so you might be stuck paying a high commission to them.” You might have to pay 6% to the buyer’s agent to make it fair, while everyone else is paying 4.5%.
MV Realty claims that it has enrolled more than 35,000 homeowners in 33 states since August 2020 and paid homeowners close to $40 Million.
MV Realty claims that the HBA is a memorandum, not a lien, that the firm files on the property “to serve public notice of homeowner’s obligations under HBP agreement.”
“While the memorandum does not constitute a lien, some jurisdictions may consider it a lien or a mortgage.” A spokesperson for the firm said in an email that the firm cannot control the way the various counties and states categorize the filing.
If the homeowner wants to refinance their mortgage, they will need to first contact MV Realty to temporarily suspend their memorandum.
The American Land Title Association CEO Diane Tomb stated that the trade association is concerned about the enforcement and duration of these agreements as well as consumer understanding of their implications.
“Additionally, the recording of these agreements in property records could create a long-term obstacle to the transfer or financing real estate or hamper estate administration. Tomb sent an email stating that Non-Title Recorded Agreements for Personal Services and the recording of such agreements can undermine homeowners’ property rights.
The trade organization also stated that it supports state laws and regulations to prevent the enforcement of NTRAPS.
The National Association of Realtors expressed concern about MV Realty’s right to list.
“Consumers should ensure they are fully informed about any listing agreement and should consult with a professional advisor regarding any obligations and potential risks,” the trade association wrote in an email.
MV Realty caught the attention of three Democratic U.S. Senators, Sherrod brown of Ohio, Tina Smith of Minnesota, and Ron Wyden from Oregon.

These agreements can be recorded in property records and could create a long-term obstacle to the transfer or financing real estate. It also can hamper estate administration. Non-Title Recorded Agreements for Personal Services, (NTRAPS), and the recording of such agreements can undermine homeowner’s property rights.
Diane Tomb, CEO American Land Title Association
The senators sent a letter in December to the Federal Trade Commission (CFPB) and the Consumer Financial Protection Bureau. They wrote: “MV Realty and companies like it take tens and thousands of dollars from homeowners in return for a minimal upfront fee. These agreements are advertised as a “loan option” and are used by companies to bypass the legal restrictions on lending. However, they charge borrowers exorbitant rates. Unfortunately, exclusive listing companies are now a problem across the country, affecting consumers from all states.
Senators have asked the FTC to investigate whether MV Realty is in violation of federal laws.
A spokesperson for MV Realty wrote an email in response to the criticisms and lawsuits that the firm is currently facing. “New and innovative business models like the HBA can transform established industries and sometimes draw questions from critics, or outright hostility from people whose business model is under threat. It is false to suggest that MV Realty engaged in unfair or deceptive activities.
MV Realty stated that it was committed to working with regulators and policymakers. HousingWire told it that it is confident that the discussions will “reinforce how MV Realty’s business transactions are ethical and legal and that our team operates in complete compliance with state laws.”
Trepeta said, “I am not sure if there are any illegalities regarding the HBA.” This is not a common business practice. However, unless people are actively misled, it doesn’t seem to be a violation of the law. It just feels bad when you think about it.
The firm is facing allegations and complaints regarding deceptive business practices. It is also being accused of targeting low-income and minority households.
Forbes first reported data from the Reinvestment Fund that 69% of MV Realty HBAs signed Philadelphia are from Black homeowners. They make up 37% of all Philadelphia homeowners.
“MV only contacts people who have “opted in” to receive information. This opt-in is usually obtained through digital marketing campaigns,” MV Realty responded to the claim in its “Fact versus Fiction” document. “MV doesn’t have any data about ethnicity and typically learns an individual’s age when they indicate they want to complete a transaction. MV does NOT consider an individual’s race or ethnicity when deciding whether to enter into an HBA agreement with a homeowner.

I’m not sure if the HBA is illegal. Although it is not a common business practice in the United States, it isn’t illegal unless people are intentionally misled. It just feels bad when you think about it.
Ken Trepeta is the executive director of Real Estate Services Providers Council
Right to make a list
MV Realty is not the only company currently in legal trouble. However, it is not the only one using right-to-list arrangements.
HomeOptions and SellWhenever are two other companies that generate home listing business by paying cash to homeowners and negotiating right to list agreements.
Both firms have brokerage licenses like MV Realty. However, unlike MV Realty they don’t have in-house agents who sell and list the properties of their enrolled clients. They partner with boutique brokerages, teams, and agents in the area they operate.
When homeowners sign up for the “Loyalty Program”, they can choose an agent from SellWhenever’s Network to help them sell their home.
“SellWhenever has partnerships with brokers in multiple states. Our collaborations are focused on the same goal: improving homeownership experience for both our homeowners and our clients. “Our brokerage partners work with SellWhenever to offer the Loyalty Benefit Program for homeowners who have had a positive experience with them,” a spokesperson for SellWhenever wrote in an email.
Monument Realty, Connect Realty and NestFinders are some of SellWhenever’s partners. The firm charges a referral fee to agents who are partners with SellWhenever. This is a percentage of the closing transaction’s commission.
According to the firm’s website, SellWhenever boasts thousands of loyal members. If a homeowner is dissatisfied with the program and wants to end their contract, they will need to pay a termination fee of approximately 1.5% of their property’s fair market value (as determined independently by an independent third party).
SellWhenever doesn’t disclose the length of their Loyalty Benefit Program contract. The firm also didn’t respond to questions about the contract’s time span.
Similar to SellWhenever HomeOptions has an affiliate network of real estate agents. However, homeowners who sign up with HomeOptions to sell their home don’t have to use a HomeOptions agent if they don’t want to. HomeOptions will require the homeowner to sign a temporary agreement with them if they want to bring in an agent. The agreement stipulates that the listing agent must share a portion of their commission with HomeOptions. Agents who are not part the firm’s network are not penalized.
“The best agent for a customer is not always necessarily the one that does the most deals.” Kevin Li, founder and CEO of the firm, suggested that it might be someone who specializes only in condos or town homes and not single-family homes. “I will not be able to hire all of the right agents internally. So why not let the customers choose another agent and find the best fit for them.”
Li also mentioned that HomeOptions often discovers future partner agents through the homeowners who bring their agents to their transaction.
HomeOptions will allow homeowners more flexibility in choosing their listing agent. Homeowners will be able to choose the length of their contract from 5, 10, 15, or 20 years. The firm currently offers only 20-year contracts.
Li stated that it was based on consumer feedback. People said, “I am thinking of selling my home within five years, but I don’t want to sign up 20-year contracts.” He did however note that the homeowner’s payout will increase the longer the contract.
Agents who close a sale for HomeOptions earn a referral fee. This is similar to the SellWhenever model. According to the firm, the amount an agent pays will depend on the size of the transaction.
Li said that it was important that HomeOptions agents only pay for transactions that are closed.
Li stated that HomeOptions was founded by her experience as an agent referral agency. She realized that $26 billion was being spent annually on advertising to less then 1% homeowners. This meant that only those who were looking to buy or sell a house within the next six month period. “So, I looked at the money and found that most of it was going towards lead generation sites and advertising platforms such as Google or Facebook. However, agents weren’t seeing a lot of return on their investment.

It is not always the best agent for a customer that does the most deals. Perhaps it is someone who specializes only in condos or town homes and not single family homes. I won’t be able to employ all the right agents within my company, so let the customer choose another agent and find the best fit.
Kevin Li, founder and CEO of HomeOptions
Li stated that agents who work with HomeOptions will be recommended for home sellers who don’t have an agent.
Robert Gluskin is the team leader at the Nevada-based Braswell Gluskin Group. He began partnering with HomeOptions in February. He is happy with the HomeOptions leads that he has received, even though most of his business is still organic through social media or referrals from clients in the past.
“I currently have 17 listings, and two are from HomeOptions. But I could see it growing eventually to about 40%,” Gluskin stated. “With HomeOptions clients they never bring up HomeOptions but I feel more trust with them when I go in. I don’t treat them differently just because they are HomeOptions clients. I believe it has to do with how they match homeowners with agents on their backend.
While the three firms all use right to list agreements in a common way, their methods differ. Trepeta believes these differences are crucial to understanding why MV Realty is facing lawsuits.
Trepeta stated that it was impossible to predict the outcome of the negotiations. “They might end up negotiating that they need better disclosures, or the states may decide that this is not a reasonable practise and pass laws that restrict these practices.”