2023-07-18 17:16:32
Royanne McNair, 69, stands for a photo outside her home on Saturday, July 15, 2023, in North Las Vegas. An Ohio native, McNair, who sold the house through RE/MAX following problems with HomeVestors, plans to move back to the Toledo area at the end of the month. (Churchill Round/Special to ProPublica) The home of Royanne McNair is shown on Saturday, July 15, 2023, in North Las Vegas. McNair, an Ohio native, who sold the house through RE/MAX following problems with HomeVestors, plans to move back to the Toledo area later this month. (Ronda Churchill / Special to ProPublica) Royanne McNair, 69, sits for a photo inside her home on Saturday, July 15, 2023, in North Las Vegas. An Ohio native, McNair, who sold the house through RE/MAX following problems with HomeVestors, plans to move back to the Toledo area at the end of the month. (Ronda Churchill / Special to ProPublica) Royanne McNair, 69, stands for a photo outside her home on Saturday, July 15, 2023, in North Las Vegas. An Ohio native, McNair, who sold the home through RE/MAX following problems with HomeVestors, plans to move back to the Toledo area later this month. (Ronda Churchill/Special to ProPublica)
In the year since her husband’s death, Royanne McNair has felt increasingly alone in North Las Vegas. With most of her children and her grandchildren in the Midwest, she decided to sell the house that she and her husband had already paid for and move back to Ohio.
Her goal was to be there on July 29, the anniversary of her husband’s death.
Eager to find a buyer for her well-maintained four-bedroom stucco home, she called a local HomeVestors of America franchise.
“I received a letter in the mail. That’s why I called them,” says McNair, 69, referring to the company known for its slogan “’We Buy Ugly Houses”. “I just thought it would be easier for me to sell that way, not realizing how much money I was going to lose.”
A representative from the franchise, Black Rock Real Estate, came to his house and offered him $270,000 on the spot. She signed a contract that same followingnoon.
But when McNair called one of his sons with the news, he was concerned. A quick internet search showed him that he might get a lot more for his house. So three days following signing the contract, he contacted the company and said that he wanted to cancel it.
Black Rock’s representative responded by offering to raise the asking price by $14,000, something McNair considered and even verbally agreed to, before calling back and asking to be let out of the deal. McNair did not hear from the company once more.
An investigation by ProPublica this year found that HomeVestors franchisees sometimes deploy aggressive tactics to force homeowners into sales contracts even when they no longer want to sell their homes, including filing lawsuits and filing documents in the property title. In response to ProPublica’s findings, HomeVestors prohibited its franchisees from lateralizing titles by recording documents to make sale to anyone else nearly impossible and advised that filing lawsuits to enforce a sales contract should only be done in rare circumstances.
Black Rock Real Estate – created in 2012 by Carl Bassett, a former appraiser – is one of the most successful franchises of the 1,150 HomeVestors. In 2021, it generated the company’s third-highest sales volume and won the “Franchise of the Year” award. Bassett, who has been recognized as one of the company’s “best seamers,” also helps recruit and train new franchise owners.
McNair, believing he was out of his contract with Black Rock, put his house up for sale with a realtor and within days received nearly 20 offers. He accepted one for $372,500, more than $100,000 above Black Rock’s offer.
McNair was excited. The new deal closed on July 14. A search for lawsuits, liens, and other obligations once morest the title that would prohibit the sale turned up positive. She was due to arrive in Ohio at the end of the month.
Then an envelope turned up at the office that handled the escrow process for the sale. Inside was a copy of the Black Rock contract that McNair believed was cancelled. His arrival immediately halted the sale.
‘A very dirty tactic’
In Nevada, and in more than half of the states in the United States, escrow offices, not attorneys, handle the process between signing a home sales contract and closing the deal. Escrow agents are neutral third parties that facilitate real estate transactions by making sure no one claims the property and by holding onto the funds while the transaction is executed. The trustee had an obligation to halt the process until the competing contract to purchase the McNair house was resolved.
McNair was forced to hire a lawyer.
The escrow officer informed McNair’s real estate agent, Ryan Grauberger, that the FedEx envelope had arrived with no name or return address, something Grauberger said he had not seen in 24 years in business. Neither had the escrow agent, he said.
“It’s a very dirty tactic,” Grauberger said.
After ProPublica contacted Bassett regarding McNair’s experience with Black Rock, he called her and promised to release her from the contract. She also offered to pay his legal fees.
“He was very apologetic,” McNair said.
One of the reasons HomeVestors management gave for prohibiting its franchisees from altering sellers’ titles and excessively filing lawsuits is that such practices create a public records trail that reporters and prosecutors can trace.
In McNair’s case, there was no public record to show who had sent the Black Rock contract to its depository. However, in a brief phone conversation with ProPublica, Bassett acknowledged that his office had done so. He did so because the trustee had refused to discuss the deal, saying Black Rock was not a party to the sale, he said.
“We believed that we still had a contract with Ms. McNair,” Bassett said. “It had nothing to do with blocking the sale or trying to undermine it.”
Bassett said he never received the text or email McNair sent formally requesting to cancel the contract. She said that Black Rock’s title company had contacted her multiple times trying to close the sale. (Bassett said she learned of her desire to get out of her agreement when a ProPublica reporter emailed her.
“When we had the chance, we did the right thing,” he said, chalking it up to a “misunderstanding.”
McNair provided ProPublica with copies of the text message and email he sent to Black Rock to cancel the contract. He had unknowingly misspelled the recipient’s name in the email. The text was sent to the office phone number, which Bassett says does not receive text messages.
Problems in the details
Asked regarding this transaction, a spokesperson for the HomeVestors corporate office said: “Our priority was to ensure that the seller’s concerns were addressed and that the seller was satisfied with the outcome of this process. We believe that the franchisee has achieved this by canceling the contract previously signed by the house. All other aspects of the transaction will be reviewed by HomeVestors.”
Steve Silva, a real estate lawyer in Nevada since 2013, said he has also never heard of a contract appearing anonymously during escrow. The typical way to claim a property is a lawsuit demanding that the seller honor the contract, he said. That’s the kind of action HomeVestors has told its franchisees to take only on rare occasions.
“Especially in light of the directive not to use the old tactic, it might be that he was looking for a new way to try to find some pressure to push through his deal,” Silva said.
Simply mailing a contract to a depository might be a “risky move”, he added. Depending on the enforceability of the contract, such a tactic might expose a person to claims for interfering in a business agreement or slanderous title by making a false claim to the property, he said.
In the McNair case, Grauberger said Black Rock initiated an escrow process but never paid the $1,000 deposit required by the contract. “In my opinion, it’s a dead contract,” he said.
Bassett declined to comment why his company never made the deposit.
On July 14, McNair closed on the sale of his home arranged by his realtor and plans to move to Ohio at the end of the month. “I’m excited,” she said.
Bassett followed through on his offer to pay McNair’s legal fees.
“I got a check for $600 on my desk,” he said.
But he also made another request. He told McNair that the Black Rock representative — a father of five — who made him sign the contract might lose his job if ProPublica ran a story regarding it. He asked McNair if he might record a statement and take a picture of him. She said he wanted to publish her own story to “retract” what ProPublica reports. (Bassett said this is an inaccurate description of her conversation with McNair, but she declined to detail what she told him.)
“I won’t,” McNair said. “I don’t want to bother with HomeVestors once more.”
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