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Home seller miffed after firm flips home
Imagine Jim Davis’ surprise when he learned his home was again being offered for sale even before the deal he’d signed in December had passed its completion date.
After Davis’ mother passed away last year, he and his brother inherited her Jesmond Avenue split-level house in desirable West Richmond.
They sold the property to a man who claimed he was going to build his dream home for his wife and child.
But last Friday, a phone call from a realtor alerted Davis to the fact that the buyer was actually trying to flip his property for a $100,000 profit, one of many such transactions currently underway in Richmond’s white-hot real estate market.
“I feel like I’ve been snookered,” Davis said from inside his mom’s home. “If they’d just been honest with me up front...”
Davis said he was fully aware that in the sales agreement, it’s clearly stated that the buyer had the right to effectively re-sell the home. But he would have appreciated it if the buyer had let him know he was going to act on that provision.
The company behind the deals, New Land Strategies Corp., 703-6081 No. 3 Rd., has upwards of 10 similar Richmond properties currently available.
The Review was recently contacted by two realtors who were concerned about the unusual practice, the likes of which hasn’t been seen in Richmond since the late 1980s.
New Land, and owner Ze Yu Wu, has spammed a list of the properties to local realtors: 9711 Stilmond Rd., 3460 Raymond Ave., 3531 Jesmond Ave., 8720 Kelmore Rd., 10740 Reynold Dr., 10100 Bamberton Dr., 9860 Berry Rd., 8360 Lunen Rd., 6391 Mara Cres. The Review was unable to reach Wu for comment.
In the case of one of the homes, owner John A. Taggart wouldn’t comment after being contacted by The Richmond Review. He said he is the chair of the local property assessment review panel for BC Assessment, and wouldn’t say whether he’s aware his home is currently on the market for $1.19 million.
Purchasing homes and assigning them to a third party during the standard three-month window before a house transaction completes, isn’t exactly a common practice.
And it isn’t illegal as long as the seller has been made aware, and that those details are contained in the contract of purchase and sale.
Tsur Somerville, of the Sauder School of Business at the University of B.C., said house values don’t traditionally change that much in a three-month span.
But Richmond’s real estate market is currently an exception. A 7,500-square-foot parcel of land in a desirable neighbourhood that once sold for $750,000 in October now commands in the neighbourhood of $1 million.
The reason: buyers from China are scooping up properties on which they can build $2 million mansions. The last three months of furious sales activity has driven up the benchmark and median selling price of local homes above $1 million for the first time.
Richmond realtor Tony Ling said he received the spam e-mail and trashed it immediately.
“I think that any professional real estate agent could see right through this,” he said.
Ling said that he prides himself in his hard-earned reputation built over many years, and associating himself with people who flip properties can seriously damage that.
“This guy appears to be trying to make a quick buck.”
UBC’s Somerville said that if a realtor is doing his or her job and properly monitoring the market for the seller, the seller should get market value for their home.
But at least some of the properties listed by New Land were private sales, where no realtor represented the seller, and only the buyer was represented by a professional.
This can seem attractive because the commission can be cut in half, saving the seller upwards of $10,000.
But in cases where the market changes swiftly, the seller can be left shortchanged, though in Davis’ case, he’s not upset about that.
If he’d been told up front that the buyer wanted to try to flip the property, he would have been fine with that and sold it to him anyway.
Somerville said that for some sellers, their home is more than just an asset, holding sentimental value.
“I think people do care about what the seller will do with a house that they’ve been living in for 30 years.”