Ontario woman says using ‘cash for houses’ company was costly mistake

I normally wouldn’t post a news report verbatim however with the limitations on sharing news I felt this was a better method to get the word out.  

We are increasingly seeing these kinds of quick fix ideas proliferating.  Unfortunately over the years the real estate industry has from time to time been the focus of negative publicity due to bad actors.  In any industry you will find them I think.  However in our industry we have checks and balances, Broker oversight, Errors and Omissions Insurance, RECO and provincial and federal legislation to control the industry.  Will this prevent bad actors?  Not necessarily however there is client protections in place to mitigate risk.  By far our industry is populated with caring and principled people.  We truly look out for the client’s best interest, I certainly do.  The below story is yet another cautionary tale that tells us “If it seems too good to be true it generally is”

Unlicensed real estate entrepreneurs have no professional responsibilities — unlike Realtors

Laurie Thompson admits she needed to sell her townhouse in Smithville, Ont., fast.

The pandemic had done a number on her finances — the bar where she worked had shut down, twice — and rising interest rates meant her monthly mortgage payments of $2,000 were going to almost double last January. Thompson was facing foreclosure.

“I was desperate,” she told Go Public. 

Thompson had seen street signs and posters in her neighbourhood — companies offering to pay quick cash for houses. She’d even received what appeared to be a hand-written flyer in the mail, advertising a hassle-free cash sale — no renovating, open houses, or Realtor commissions. 

She hit the internet and found a company with positive reviews and attractive promises called Honest Home Buyers Incorporated (HHBI), based in nearby Hamilton.

“The website said, ‘Cash in your hand [quickly],'” said Thompson. 

The website promised other advantages, too  — “more cash” in a seller’s pocket, a quick closing date, no Realtor fees and it claimed homeowners sometimes get a cheque “the very same day!”

The Honest Home Buyers website promises quick ‘cash in your hands’ — but doesn’t clarify that the cash sellers get up front is just a deposit, not the full sale price of the home. (honesthomebuyers.ca)

Thompson knew this option meant she wouldn’t be offered top dollar, but figured it was worth getting the house sold, quickly. 

“You’re not going to get fair value from a company that’s paying you in 72 hours,” she said. “But … I didn’t want it to sit on the market for three to four months.”

When HHBI owner Mike Chow arrived at Thompson’s townhouse for a walkthrough last January, she told him her employment had been sporadic, the mortgage lender wanted her debt paid off immediately and that she was struggling emotionally — a few months earlier, her partner had unexpectedly died from a heart attack.

Chow produced a contract and offered $575,000. Thompson says she peered over his shoulder as he read through it speedily and encouraged her to sign on the spot. 

The whole transaction took about half an hour. Thompson says it likely cost her tens of thousands of dollars in profit, if not more.

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