What do you think.

[Zaky Waky]

trader_4 wrote in news: [e-mail]:

Yo Trader! Long time no see.

You still living in Newark?

[CRNG]

On Mon, 25 Aug 2014 08:58:02 -0500, Moe DeLoughan wrote in

Thanks for sharing your excellent research Moe. Off the top of my head, one other way they can rip you is if all the sales brokers in the program have a special program sales commission that is _higher_ than other brokers outside the program. Yet a program "member" would still be contractually obligated to use the higher cost program broker.

There are so many ways this can be a rip-off. I don't believe the program has been around for 10 years.

[micky]

I talked to my friend again.

He told me more. He had talked to the guy doing the hiriing for this, and showed him his work history, and the guy was very enthusuatic. "You're just the one we want. You're good with customers" etc.

The next day he looked them up with the BEtter Business Bureau, and they had an A rating. The highest is A+. So he called the company backm back and the same guy answered, and I guess he didn't know that until later, so he verified the address of the company. Then my friend told the guy on the phone that he had called the BBB and that they had an A rating.

And instead of saying, "Well I'm sure that puts your mind at rest, and you know we'll be a good company to work for" the guy said. "Don't you ever call this number again. We don't want you. You're bad for this company. You think too much." and then the guy hung up on him.

Wow, huh? As my friend says, "Nobody*** gives away money [so there must be a gimmick]

My friend talked to his sister too, and her theory was that every dollar they give out, the homeowner has to pay back when he sells his house, plus lots of interest. Of course until someone sees the contract, he doesn't know that. So I'm thinking, even an honest person who intends to hire the require real estate company is likely to forget about this deal in several years, or lose the phone number, so what do they do then. I thought maybe they follow the muliple listings checking if one of their houses is listed.

But as I started typing here, a better way came to mind. They put a lien on the house which has to be** paid before it can be sold. And part of the contract is the owner agreeing to the lien. Probably without using the word lien.

**What if someone tries to buy a house without checking for liens. I'm sure he can, can't he. He just buys the house subject to the same lien and the lienholder can foreclose on the lien anytime he wants, and force a sale, like they do with people delinquent on property taxes.

***Except John Bears Fertipton. I eventually learned that his name was John Beresford Tipton.

[nestork]

I don't think the realtor can put a lien on a property unless the property owner OWES the realtor money, and in this case, I don't believe that deal would create any indebtedness on the part of the home owner.

There is something else called a "caveat" that attaches to the property very much like a lien. A caveat is like a clause that get grandfathered in if there's any change in ownership of a property. For example, a father might sell an apartment block to his son with the caveat that the father may live in one of the apartments rent-free for the rest of his life. In that case, it doesn't matter if the son sells the building to anyone else, that third party has to honour that caveat and allow dad to live rent free in one of the apartments.

Similarily, if the son gets killed in a car accident, and ownership of the apartment block passes to the grandson, then the grandson has to honour that caveat by letting gramps live rent free in one apartment.

Caveats can be as bizarre as you can imagine and aren't set up primarily to extract money from the homeowner like liens are.

I expect that in your friend's case, the realtor is putting a caveat on people's property saying that they can't sell it unless that realtor handles the sale and gets the commission. And, that would be a valid caveat.

[trader_4]

You sure have a vivid imagination.

[trader_4]

In all this interviewing, did your buddy ever see any of the actual gift certificates? Ask what exactly they are? That's what's curiously missing. I didn't see one word on the website about what the certificates are, examples, etc. The whole thing is nutty, but if you knew that the "certificate" is for 10% off at Joe's hot dog cart, 30 miles from where you live, and similar worthless crap, that would explain why they aren't talking about it. And the certificates would seem to have to be something useless, along those lines. I can't see where the money stream would be coming from to shell out hundreds of dollars to each sign-up today, based on recovering money from realtors many years from now. That business model doesn't make sense.

[Pico Rico]

the website also doesn't give a copy of the contract. Sure, I'll sign up before seeing the contract.

[trader_4]

No contract and not even some examples of what the "gift certificates" are. Makes me want to sign up too. I'd also think they and possibly anyone peddling the streets for them, could run into trouble with realtor licensing issues. They are getting you to agree to sell your home through one of their brokers and I would think the position of regulators could be that requires the person doing the selling to be licensed.

[Moe DeLoughan]

If you signed up, they can still haul you into court for failing to honor the contract even though they failed to honor it as well. That's the point: that you are creating a potential legal headache for yourself if these guys decide to pursue their legal claim against you. Five years on, and it's your word against theirs that they failed to uphold their end of it. In the meantime, they've got your signature on the agreement.

They aren't going to sue you to

It's not $300 for them. It's 7% of the sale price of your home. *That* is what they're angling for, and that's what they're offering cheapass gift cards for in hopes of securing. For a $200K home, they're looking at a potential sales commission of $14K. You think they'd walk away from that? I don't.

It's like saying some guy shows up to buy your car, you make a contract, he agrees to pay you by Sat, he leaves and

And clearly, if you had an agreement, he can file suit and haul your ass into court. Then, and only then, can it be legally determined whether the contract is still valid.

That's the point: by agreeing to this, you open yourself up to the risk of a future lawsuit, and the accompanying expense and aggravation, even if you prevail in the end. Is that risk worth a few hundred bucks in gift cards? Not for me, it isn't.

[trader_4]

ou please, you have no obligation to them.

If they do what you suggested, which is have you sign the contract, then fail to pay you a cent, no gift cards at all, do you really, really think they are going to haul you into court? It would be like the example I gave you, of a guy agreeing to buy your car for $3000 next Saturday, then you never see him again. He *could* take you to court. I could file a frivolous court action against you or anyone else, regardless of what one signed or didn't sign. The point is, the company isn't going to take you to court for a case where they didn't pay you a cent and have no case.

They would have to prove that they provided you with the gift certificates. No proof, no case. Also factor in that if this is their business practice, to not give people the gift cards at all, it would seem extremely unlikely that they aren't going to be put out of business, put in jail, before I happen to sell my house.

It's clearly not 7%. Around these parts the total commission is 6%. That is typically split between two firms. If one firm is the one that is part of this deal, then that *realty firm* would get 3%, if they actually sell t he house. The third party company, what they get, is anyone's guess, but i t's clearly not

7% of the value of the house.

For a $200K home, they're looking

Per the above, the firm we're talking about isn't getting 7% of the sales p rice. They might not get anything for the actual sale at all, for all we know. The arrangement could be that they get some small amount from the realty firms up front and nothing on the back end. And regardless, if they didn't provide any compensation, which is the scenario you proposed, yes I think they'd walk away. Is a company from CA going to sue me in NJ to try to collect a bogus claim, when they have no case? Isn't going to happe n. And suppose they have 3 realty firms here, one of which would have gotten the deal, if the contract had been in force. Are they going to collectivel y sue me, all 3? Seems extremely unlikely, particularly when I tell them I was never paid and the company in CA has no proof of paying me. Plus if the y are cheating people by not giving them the cards, the realty firms are going to know it, end the relationships, etc. Legitimate realty firms don't want to be associated with fraud.

So, following that theory, better crawl under the bed and hide. The guy who made the contract to buy your car defaults, never shows up again, and you're not going to sell the car to somebody else, because he might sue you one day?

I think there is plenty wrong with the arrangement. But I don't see living in fear that they could sue you after they defaulted by not paying you being a realistic scenario.

[Moe DeLoughan]

Yes, because it is so inexpensive to file a suit compared to the potential payoff of forcing you to abide by the contract you signed.

Remember: if they didn't give you the gift cards, it is only your word that they didn't. Once you list your house, they can pursue legal action, at which point the burden of proving they didn't honor their end of it is your problem. They have very little to lose and lots to gain by filing suit...including making it clear to other local homeowners that they cannot shirk their agreement.

It

No, it's not, because these folks have you sign an agreement. That gives them a legal document showing you agreed to abide by its conditions. What have you got? Just your claim that they didn't provide the goodies as promised.

He *could*

There are two key points: 1. You signed a contract. 2. Your defense is that they didn't follow through on their end. And that's all it is: a _defense_. Unless you want to initiate the legal action yourself, by filing suit to void the contract on the grounds they failed to hold up their end of it. In either case, you are bound by the agreement you entered into unless/until you get a judgement that one party or the other failed to perform, and thus voided the contract. In either case, it means time, expense, and aggro. The contract doesn't just magically vanish because one side *claims* the other side welshed. That's what the courts are for.

No, all they need to provide is the contract that you signed, agreeing to the terms. Then they tell the judge hey, we did our end - but this person welshed. At that point, you have to defend yourself by somehow proving you did *not* get the gift cards. Sure, you could've sent letters, hired lawyer to notify them, etc. But that gets back to my original point: any homeowner who signs up for this is potentially setting themselves up for a lot of expense and aggro in return for very little. It's just not worth it.

[trader_4]

Show us how inexpensive it is for an out of state company to sue me here in my state, especially when they have no case they can win. Are they going to hire a lawyer, send their employees across the country, over some pittance? And as I pointed out, the company running this program has no big 7% pay day. What, if anything they get on the sale of the house years later, who knows. *Maybe* they get $500, maybe they get nothing because they got their couple hundred bucks up front, but they sure aren't getting 6 or 7% which would typically be split among two brokerage firms, assuming the house actually sells.

They would certainly realize that if they file suit against someone and the defense is that the contract is invalid because they never paid the person a dime, then they are going to have to *prove* in court they did provide you with the gift certificates.

Once you list your house, they can pursue legal

If they are screwing people, as you suggest, by not sending them the gift certificates, do you really think they are going to go to court to expose themselves? That they would even be in business 5 years from now at all, as opposed to being out of business or in jail?

Who says I didn't get the car buyer to sign a simple agreement I wrote on a piece of paper to buy the car? Now when the guy disappears, I can't sell the car forever because I have to fear him returning to sue me? Also note that a verbal contract for a car is every bit as enforceable as a written one, it just becomes harder to prove exactly what was agreed to.

That

My defense, on the extremely rare chance that someone who defrauds me is going to take me to court, is simple. I was never sent the gift certificates. For proof, I have a couple letters, emails, whatever that I sent the company asking where they were. I have their responses, if any, too. I have the testimony of my spouse. Now they would have to prove that they really did provide them to me.

Fine. Better keep that car that the guy didn't buy, for fear that he will show up, with a similar bogus case one day.

In either case,

The time, expense and aggravation is why an out of state company that defrauds someone isn't going to take them to court to begin with and certainly not over some paltry sum.

Is that how it works in your world? A case comes to court, the defense is that you were never paid, and court isn't going to look to the other side to prove that you were paid? It could be a simple case of a contractor saying he wasn't paid. The court is immediately going to look to the other side to prove that he was, because if indeed he was paid, the company should have easy means of proving it. You usually can't prove a negative.

Sure, you could've sent

The letters should be more than sufficient. "Where are my gift cards/" I agree it's a dopey deal. But I don't agree that living in fear of being sued if they default is one of them.

[micky]

Aren't you in Canada? I looked for this and found a good hit from New South Wales. I'm trying to figure out if I know what this would be called in the US, and I can't think of anything, but I asked somewhere else.

[Stormin Mormon]

A short nap in the afternoon is a good idea.

[nestork]

Micky: Yes, I live in Canada.

Try Googling "legal caveat" or "property caveat".

This web site:

explains what property caveats are.

Essentially, just in the same way that a lien against a house means that the house can't be sold without the lien holder being paid first out of the proceeds of the sale, a caveat informs the Land Titles Office that someone else has some form of interest in the house (or other property), and that it can't be sold without permission from a court.

So, if someone who took one of those $300 gift certificates ever wanted to sell their house, they'd have to get the Court's permission, and that Court would undoubtedly rule that the house can't be sold without the realtor's permission or, according to the agreement, without the realtor acting as the real estate agent in the sale.

It's a shrewd sales tactic by the realtor, and one that's not going to earn him any word of mouth advertising, but animosity instead. I don't think very many home owners would fall for his offer. I know I wouldn't. So, I expect it would be a very low paying job for your friend. $300 is simply not enough for any reasonable person to gamble with something as important as their house.

PS: Both Canada and the USA (and Australia and New Zealand), as former British colonies, inherited the same "Common Law" system from Britain, so there should be the same kind of thing as a caveat in the USA, and it's probably called something very similar. In France, and in former French colonies, including the Province of Quebec in Canada, the law is based on the French "Civil Code". And both the British Common Law and the French Civil Code evolved from the Law as written down by Gaius before the fall of the Roman Empire, so both legal systems evolved from the Roman legal system. In Muslim countries, they practice a completely different kind of legal system called Sharia Law.

[trader_4]

You have a very vivid imagination. Can you show us one case where the company doing the gift certificates has done this, ie put what amounts to a lien on someone's property?

It's not shrewd, it's pretty stupid. But whatever it is, you acknowledge it would earn the realtor animosity. So, how many local realtors do you think are going to do it then? It's particularly absurd because when the homeowner finds out that they've put a caveat on his property, then the realtor is likely in a hostile position vis-a-vis the home owner. Think many realtors want that? Years before the sale process has even started?

All I see in it for a realty firm is a lot of trouble. Which is probably why there isn't one participating firm showing up when I entered my zipcode.

[nestork]

Trader:

What we have here is a realtor who is prepared to make money in his business any way he can.

I believe he has given up on the notion of making his money by providing fast, friendly and efficient service to his clients and relying on word-of-mouth advertising to build his client base.

He's at the point where he'll screw his clients to get the sales commissions on their homes. And those gift certificates are his screw driver.

[trader_4]

You do realize that the company offering the gift certificates is not even a realty company, don't you? Maybe there are no realty firms at all. As I said, I put in my zipcode and not one firm came up for suburban NJ. They do claim that Century 21, ReMAx, Coldwell Banker on their website. You think realty firms that are part of those franchises are out to screw customers? I don't. In reality any participating firm is probably paying this company some small fee for each referal. Who knows what the gift certificates actually are or what they cost. They probably don't cost much and aren't worth much, or the company would be saying what they are on the website. And while you're supposed to sell your house with one of their realtors, I bet if you don't they aren't coming after you, because it's not worth the trouble and bad image. First problem any actual local realty firm would have is which realty firm exactly is going to come after me? Suppose there are 3 in the area that are part of the program. Then what? Who's going to sue me? All 3 get together? No firm individually can claim that they should have gotten the deal, unless there happens to be just one.

There are a lot of reasons to not do this. I just don't see living in fear that they are going to lean your house from day one being one of them. As soon as folks found out that a lien was being placed on their property, all hell would rain down on this company.

[Pico Rico]

I believe they are licensed brokers, perhaps not actively engaged in the real estate game other than their "scam".

Maybe there are no realty firms at all.

it would be the "scamming" company that would come after you, and they very well may. To collect a fee, and to keep others in line.

nop, the "scamming company" would come after you.

no kidding!

I just don't see living in fear

If they don't record the contract against your house, they are fools. Exactly WHEN they get hell rained down on them remains to be seen.

[trader_4]

What makes you think they are licensed? I didn't see anything on the website that says they are. If they are, I would think that would be a big thing they would mention to add credibility. Seems like that would be a real pain to do across the whole country. Also, if they are brokers and need to be licensed as such, then what about the folks they are hiring, like Micky's friend? Micky's friend, who's doing the selling isn't licensed. I doubt they are licensed, what I see is a broker referral service. How that is treated would probably vary among different state regulators and laws.

I agree that if you agreed to the deal, received the givt certificates, then didn't use one of their referal brokers, then the company has a legitimate claim against you. But it's not for some astronomical amount. What their damages would be is whatever referal fee they would have gotten from one of the realtors for the referral. No reason to believe that's much. I would guess it might be $500, $1000 tops. What do you think any realty firm would pay for a referal? So, yes, they could sue you for that, whether they would when you're located somewhere across the country, I tend to doubt that.

The biggest flaws I see in all this are:

1 - No mention of what exactly the gift certificates are. That no clear examples are even given is a red flag. They could turn out to be something with little value to you. Also those certificates are not handed out upfront, apparently you get some each year for four or five years.

2 - You don't know what realty firms they would have participating say

5 years from, when you do want to sell your house. If I knew that a couple of the respected local firms would be the choice, then I would consider the deal. That you don't know what the situation will be years down the road is a big problem.

I agree it's actually the company that would have the case, for their referal fee. I doubt they are going to come after you in court, when they don't even have a presence in your state. And if they did, they don't have some $10K lawsuit, it's probably not worth pursuing.

It's not even clear to me that they have anything that could be recorded here in NJ. Why don't you just go ask them the question and then you'll know.

Also, if you're worried about lawsuits so much, you might want to stop throwing around the term "scamming company". So far, I see reasons why I wouldn't participate. I've listed them. But nothing that I've seen so far rises anywhere near the level of a scam.