Have you ever seen Real Estate advertising that says something to the effect “Your home sold in 90 days or we buy it” and wondered what's the catch? If you are an optimist you might find this to be an irresistably enticing offer.
Every now and then an advertisement for a guaranteed home sale program pops up and clients ask me what they are all about.
The guaranteed home sale program is in fact one of the biggest gimmicks in the real estate industry! A better name for the program would be: Your home sold for UNDER value guaranteed.
How Do Guaranteed Home Sale Programs Work?
According to most of these guaranteed home sale websites you will receive an up front guaranteed price in writing from these Realtor’s and if they receive an offer that is higher than their guaranteed price from a Buyer, you will get the higher offer. Sound good? Well, there is a catch. The catch is that the price they have guaranteed your home selling for is below market value.
There are usually two sets of consumers that will respond to this type of Real Estate marketing. Those that think the Realtor may be some sort of real estate magician, and a seller that is desparate to sell their home.
How many homes do these realtors end up purchasing? Likely very few, if any. Buyers know value when they see it and in most cases will jump at the chance to buy a home under market value. Aggressive pricing is the same reason why most foreclosure homes sell quicker than traditional homes.
What you should be looking for is a Realtor in your area with experience and knowledge of how to market homes.
Conflict of Interest
A good realtor is worth their weight in gold. The sellers agent should have one very specific goal in mind when representing you – get the most money for your home! Sellers interests need to come first and an integral part of the job is helping negotiate the best price and terms for their client. The agent owes the seller undivided loyalty, reasonable care, disclosure and obedience to lawful instruction.
There is an inherent conflict of interest when an agent is buying the home under the value of the property. What you should ask yourself is how you will feel if the real estate agent puts your home back on the market after purchasing it from you and sells it at a profit.
Remember, just about anybody can sell a home if it is listed way under value, including the home owner.
Pick a Top Producing Real Estate Agent Instead
Some excellent considerations for picking a top Realtor include:
- Their track record of success in both strong and weak home selling markets. You want someone who knows how to get the job done regardless of what is going on in the world around them.
- The agents ability to market well. Does the agent provide ample photography on the homes they are marketing? Make sure you do your due diligence and check! This is one of the most important considerations in real estate sales.
- How do they market homes? Does the Realtor take the time and effort to write exceptional descriptions of the properties they have been hired to sell or are they clearly just slapped together. You don’t need a wordsmith but should have someone who has as at least invested some time into describing your homes best features.
- How is the agents communications skills? Do they respond in a timely manner to emails, text or phone calls? This is something you should pay careful attention to BEFORE you hire them. If they aren’t doing an exceptional job beforehand, I guarantee they won’t after you hire them!
- What are the Realtor’s statistics? Some of the things you should check on are how many properties they list actually end up selling. Two other very important considerations are the average days on the market and list price to sale price ratio. Keep in mind however if the real estate agent finds enough suckers to list their homes under value, these numbers are going to be off the charts.
If you take home one point from this all, it should be that guaranteed home sale programs are not the way to get the most money for your home.
Be extra careful when choosing an agent that has this kind of marketing plan in place to lure home sellers into signing up with them. Some agents have set up their business to work on a volume basis. The whole purpose of the guaranteed home sale program (from the realtor perspective) is to get you to call to inquire more details. There are better choices!