IS IT FOR REAL OR JUST ANOTHER REAL ESTATE GIMMICK?
Have you ever seen a post card, internet ad, a billboard, or heard a radio commercial that resembles this:
We Will Sell Your Home in ___ Days – GUARANTEED Or We Will Buy It
Or, maybe it looked/sounded something like this:
YOUR HOME SOLD GUARANTEED or I’LL BUY IT MYSELF AT AN ACCEPTABLE PRICE
This method of getting listings is extremely popular with some agents around the country. It was made popular by a very well known motivational speaker and business coach. I personally know several real estate agents who employ this method of advertising/marketing. Some agents swear by it, while others feel it is dishonest and gimmicky. OK, so I want to take a minute or two to discuss these Realtor gimmicks and tricks which are used. Some of these tricks and schemes seem “too good to be true.” I want to state, up front, that our firm does NOT engage in any of these gimmicks. Be careful when you see something you think may be too good to be true, because it probably is. Read the fine print.
TOO GOOD TO BE TRUE? – The PRICE they buy it for, isn’t what you think
First off, the “guaranteed sale” will not be at the price you expect. The Realtor who markets this type of plan is backed by investors who will purchase your home at a wholesale discounted price. Meaning that you may get $.60 to $.70 on the dollar. For easy math, let’s say that you think your home is worth $200,000 and that’s where you want it listed. The Realtor will “guarantee” to buy your house for $120,000 to $140,000. That puts a different spin on it, doesn’t it? I mean, isn’t the phrase “acceptable price” extremely ambiguous. Acceptable to whom? The truth is that the “acceptable price” will be determined by the real estate agent, and it will be a price that is WAY below market value. If you do not agree to the “acceptable price” then you do not qualify for the guaranteed program. Now, if you are a seller, would you be comfortable with this? I would not.
You must agree ahead of time to LARGE price reductions
Second, in order to “qualify” for the programs, you must agree ahead of time to large price reductions every few weeks, whether or not you want to. If you do not follow the price reductions set out in the “guaranteed sale contract,” the contract becomes null and void and the Realtor is no longer required to purchase your home. So, if you’ve listed your house at $200,000, your first price reduction should come somewhere after the first week or two on the market. Generally the price reductions are as high as 15-25% over the “Guarantee” period. You get the idea about the price reductions…they just continue until the home is sold. And, of course, any home will sell if you reduce it to tens of thousands of dollars below market value. There isn’t anything special in this method.
YOUR home doesn’t “qualify” for our program for some reason
But this isn’t all. In most cases, there are MORE stipulations to the guaranteed program that must be met in order to qualify. For instance, in most cases, you must agree to purchase your next home with this particular agent, or you must purchase a home listed by the agent guaranteeing your home sale, and your home can only be in certain price ranges. Most sellers don’t even qualify for the program. Wow!
They don’t EVER buy homes. (and not because they are all selling)
Seriously. They don’t ever buy homes. Many of the so called “guru” real estate trainers around the country who recommend this marketing method even brag about this. They tell agents how to structure their guarantee so that no right minded person would even want to take the “guarantee.”
So then, why do Realtors use a “bait and switch” tactic like this?
Because it gets them into your door and in front of you. 99.9% of sellers do not end up doing these “guaranteed sales programs” once everything is explained to them in full. However, these Realtors have found a way to get into your house for a one on one, personal chat. They will put on the hard sell and most people do not like a hard sell tactic. It’s simply a gimmick to try and get you to call them and get your business.
Again, we do NOT condone these types of practices and we do NOT run this type of business.
If you are willing to sell at THEIR “Guaranteed Sold” Price, I WILL buy your home. Yes. I’m a real estate agent, but I’m also a real estate investor, and own many investment properties. If you just want get your home sold fast, and are willing to sell at a discount, I WILL buy your home. But, I’m not going to use it to “Guarantee” your home is sold in ___ days, just so you will call me. I don’t operate like that.
Remember, this is probably the biggest transaction you will have in your life. Trust is a vital part of an agents value. We believe in honest, hard work to earn your business…not gimmicks or questionable practices. If you’ve considered calling on a “Guarantee” like this, be aware.
Hopefully this article has helped you understand the nature of these programs. Why in the world would you want to work with a residential real estate firm who is trying to pull the wool over your eyes from the start? I know that I wouldn’t…not only in real estate, but in any business or personal relationship for that matter.
Our grandparents were right: Say what you mean, and mean what you say.