(Winnipeg) The Manitoba Securities Commission (MSC) Real Estate Division is issuing a warning to Manitobans about house-flippers using aggressive tactics against vulnerable citizens.
The MSC has received several complaints from Winnipeg residents contacted by individuals wanting to buy their home. In most instances, the homeowners being contacted are known or believed to be in financial distress.
“These house-flippers are actively seeking out vulnerable citizens and using their financial problems as a bargaining chip,” says Jason Roy, Senior Investigator with the MSC. “We want Manitobans to be aware. This could be a family member, friend or neighbour being coerced to sell their home for much less than its worth.”
In these cases, the ‘flipper’ identifies a potential target, and typically leaves a handwritten note explaining they have ‘someone’ interested in buying their home. They then make a below-market-value offer, hoping to take advantage of the homeowner’s difficult financial situation. They also discourage the homeowner from contacting a real estate agent. The homeowner may then be asked to sign a contract allowing so-called engineers or architects access to the property before the sale is finalized. In fact, these are not engineers, architects or tradespeople, but potential investors in the property, there to assess whether they can profit on the ‘flip.’
These aggressive and misleading tactics can create additional hardships for those who may already be experiencing financial distress, and in some instances, the flippers may be acting in violation of the Real Estate Brokers Act.
“It’s extremely important to take time to understand the real estate transaction you are getting into, before it is too late,” says Keith Schinkel, Registrar of the Real Estate Division. “Before selling your home, you should take steps to ensure your personal interests are protected. This can include getting independent advice from someone not tied to the transaction.”
MSC’s Real Estate Division suggests homeowners follow some basic advice:
1. Check to see if the person who is transacting on your behalf is registered to do so by visiting: https://rols.mb.ca/aspx/pubinquiry.aspx
- Before selling your home, consider independent professional advice from a real estate agent, lawyer, etc. To find out the fair market value of your home, contact a real estate appraiser.
- Never sign blank documents that could later be filled with falsified information.
- Never sign documents without fully reading them and understanding what they mean. Seek independent legal advice if you’re unsure.
- If experiencing financial hardships, seek advice from financial professionals that you initiate contact with (eg. a credit counsellor, a bank or credit union professional etc.)
Members of the public are advised to contact MSC if they are concerned about any irregularities or unusual details in a real estate transaction or proposal.
The public can also visit mbrealestate.ca for more information on real estate purchasing and selling. (Source: Manitoba Securities Commission)
The Manitoba Securities Commission is a division of the Manitoba Financial Services Agency, a Special Operating Agency of the Government of Manitoba that protects investors and promotes fair and efficient capital markets throughout the province.