What Are Guaranteed Home Sale Programs?
Guaranteed sales – there are not many things more cheesy in real estate.
You may have seen the advertising from a local real estate agent that says, “your home sold guaranteed.”
Are you wondering how a guaranteed home sale works?
Now and then, one of my clients will see an advertisement for guaranteed sales and ask me what they are all about.
Guaranteed home sale programs were initially started many years ago by ERA Real Estate. Since then, many other agents and companies have copied various forms of the program.
The guaranteed home sale program is, in fact, one of the biggest gimmicks in the real estate industry!
It should be named “I will sell your home under value guaranteed.”
Guaranteed sales are one of many shady real estate agent tactics a small percentage decide to employ. It is the dark side of real estate.
Wikipedia defines a gimmick as a unique or quirky feature that makes something stand out. The unique feature, however, is typically thought to be of little relevance or use.
Real Estate agents who use this marketing tactic are doing just that – trying to stand out from the crowd.
Have you ever seen Real Estate advertising that says something to the effect, “if we don’t sell your home, we will buy it,” and wondered what the heck that was all about?
You are probably shaking your head up and down right now because it sounds like a pretty enticing offer.
Your Home Sold Guaranteed Explained
If you look around the internet, there are plenty of sites out there that offer guaranteed sale programs. Some Realtor guaranteed sales even go as far as spelling out the time frame they will sell your home.
“We will guarantee your home is sold in 30 days, 45 days, or 90 days,” they proclaim loudly. The premise behind these pitches is some guarantee that the Realtor will sell the home or do X for the client.
This is another marketing gimmick that, in some respects, is no different than value range pricing. The difference is that the list price is under the current market value of the property more times than not. In some cases, WAY under!
I have to hand it to the Real Estate agents that use this gimmick as part of their marketing plan because there are quite a few home sellers who believe something special is going on.
Guaranteed Sales Agents Are Not Superhuman
Some consumers believe these guys are not your average Real Estate agents but Realtor superheroes! I can picture it now when they arrive on the scene, all dressed in sharp suits, ready to sign up the next home seller, only to head off to a local phone booth for a quick change of clothing.
Well, maybe not a phone booth anymore, as they are much harder to find.
There is no doubt that plenty of homes can sell in under 30, 45, or 62 days (pick a number), no matter what kind of market we are in if they are priced at or below the present market value.
I know this is the case because I sell quite a few Massachusetts homes every year that go under contract in an expeditious time frame, and these are homes that are not underpriced!
Not too long ago, while selling a home in Framingham, MA, one of my clients mentioned they had interviewed an agent promoting the sale in X number of days guaranteed sale. The client understood the average time to sell a home in the Framingham real estate market.
It was clear to them the home would sell instantly because the Realtor wanted to price the home almost ten percent under the value. The client was savvy and could see right through the agent’s gamesmanship.
I listed the home, which sold in a reasonable amount of time (about 40 days) and significantly over what this agent was trying to get them to list for!
How Do Guaranteed Home Sale Programs Work?
According to most of these guaranteed home sale websites, you will receive an upfront guaranteed price in writing from the Realtor, and if they receive an offer that is higher than their guaranteed price from a Buyer, you will get the higher offer, not them.
WOW… well, isn’t that SPECIAL.
They say they are not passive agents and do more than just put a sign in the yard and wait for a buyer. YIPPEE! There is nothing magical about this. You can bet your bottom dollar that the number they will guarantee is nowhere near what you expect a buyer to pay for your home.
Yet they sign up many clients this way, so I have to give them some kudos and a good old fashion pat on the back.
Usually, two sets of consumers will respond to this type of Real Estate marketing. Those that think the Realtor may have been born on Krypton and a seller that is DESPERATE to sell their home.
If you need to sell your home at all costs, why not go with someone who guarantees they will buy it?
It would be interesting to know just how many homes they purchase. My guess is not many!
Buyers know a value when they see it and, in most cases, will jump at the chance to buy a home under market value.
Aggressive pricing is why most bank-owned homes sell more quickly than traditional homes.
Pricing a house correctly is the #1 factor for any property selling.
If you want to sell a house fast, you underprice it.
Guaranteed Sales Advertising Snags Uneducated Sellers
Some real estate agents find desperate sellers using television, radio, billboard ads, or other forms of marketing to get their message across.
It is hard to believe so many people fall for this sold-in X number of days crap.
It would be best to look for a Realtor in your area who knows how to market homes online well. Not some foolish sales pitch like I will sell your home guaranteed in some fictitious time.
This is not that important when the home is priced under market value because all you need is the multiple listing service (MLS) to get the job done.
A seller willing to price their home under market value is the kind of client any Realtor would love to have because it’s a guaranteed sale. No guaranteed home sale program is needed!
This is not the route you want to take when selling your home for market value.
Sold in X number of days, guaranteed sale programs are a marketing gimmick designed to get the phone to ring and get the Realtor more business. It is just a form of emotional selling.
When selecting a Real Estate agent, make sure you do your homework!
Guaranteed Sales Can Be a Conflict of Interest
When you hire a real estate agent to sell your home, more than likely, you will be paying a pretty hefty amount of money to do so. It only makes sense that you should get your money’s worth.
A seller’s agent should have one goal when representing you – get the most money for your home! The agent should be putting the seller’s interest first and negotiating for their client’s best price and terms.
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 buys the home under the property’s value. You should ask yourself 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 that anybody can sell a home if it is listed under the market value. You would be better off finding out your home’s market value and then selling it for sale by the owner.
Take the 5 or 6 percent commission you would be paying the Realtor and discount the price by that amount. Guess what will happen if your home is priced five to six percent under the value?
There will be people pounding down your door to purchase it!
Others Besides Real Estate Agents Can Do guaranteed Sales
A guaranteed house sale can be offered by more than just real estate agents. Real Estate investors also offer guaranteed home sales. The concept is the same.
They will offer to buy your home for much less than it’s worth. Besides getting your home under contract, you’ll be guaranteed to be selling way under value.
The other popular guaranteed sales programs come from a few different types of investors.
We Buy Ugly Houses
One of the most well-known real estate investment companies that offer guaranteed sales is We Buy Ugly Houses. The upside of using their services is getting a cash offer and a fast closing. You will also not have to pay a real estate commission.
The downside is you will be selling your home at 30-50% lower than the current market value. If your home is in rough shape, We Buy Ugly Houses is the perfect candidate to buy it.
iBuyer Companies
iBuyers are also real estate investors. The difference between iBuyers and traditional real estate flippers is that they only purchase homes in good condition. With iBuyers, you will also pay a real estate commission and guaranteed offer fees.
Look at the resource to see all the iBuying companies that offer guaranteed sales.
Guaranteed Offer Fees
Some companies that offer your home sold guaranteed will charge offer fees. You will need to check with each company to see their fee policy.
Guaranteed Offer Reviews
As you might expect, it is a mixed bag for guaranteed offer reviews. Some companies have favorable ratings, while others feel they have been duped.
It is critical to perform thorough due diligence before working with these guaranteed house sale programs.
Pick a Top Producing Real Estate Agent Instead of Guaranteed Sales
Some excellent considerations for picking a top Realtor include:
Track Record of Success
The agent’s track record of success in both solid and weak home-selling markets.
You want someone who knows how to get the job done regardless of what is happening in the world around them.
The Real Estate Agents Marketing Plan
The agent’s ability to market well is critical. Does the agent provide exceptional photography on the homes they are marketing? Make sure you do your due diligence and check!
This is one of the most critical considerations in real estate sales.
What does their marketing material look like? Some agents will try to get away with as little as possible.
A good agent will provide a nice color brochure showing your home’s best attributes, not a black-and-white multiple listing sheet. That is called zero effort.
An exceptional agent will go above and beyond by providing outside-the-box real estate marketing to help sell a home.
Real Estate Listing Descriptions Are Essential
How is their real estate add copy? Does the Realtor take the time and effort to write exceptional property descriptions, or are they slapped together?
You don’t need a wordsmith but should have someone who has at least invested some time into describing your home’s best features.
Does The Real Estate Agent Communicate Well?
How are the agent’s communications skills? Do they respond promptly to emails, texts, 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 Home Sale Statistics?
What is the Realtor’s track record of success? Some of the things you should check on are how many properties they list end up selling. Two other crucial considerations are the average days on the market and the list price-to-sale price ratio.
You should find someone better than the average in the community you’re selling.
If the real estate agent finds enough suckers to list their homes undervalue, these numbers will be off the charts.
Final Thoughts on Guaranteed Sales
By now, I hope you understand that guaranteed home sale programs are not the way to get the most money for your home. You should be extra careful when choosing an agent with guaranteed sales to lure home sellers into signing up with them.
Are all agents who have some guaranteed sale programs, terrible Realtors? No, probably not, but as a consumer, you need to decide if you want to work with someone like a pitchman on some late-night infomercial!
Don’t be surprised if the agent has set up their business to work on a volume basis. After all, setting up the guaranteed home sale program will get you to call to find out what it’s all about.
With enough people calling, the first thing they will try to do is spin you off to one of their minions. There are better choices!
You could look at how to fire a real estate agent after signing on with a guaranteed sale program.
Hopefully, you now have a better handle on guaranteed home sale programs.
Please reach out if you plan to sell your home in Metrowest, Massachusetts, and want a fair assessment of your house.
Additional Real Estate Gimmicks to Avoid
- Avoid pocket listings – when you want to sell your home for the most money possible, avoid a real estate agent who wants your home to become a pocket listing. The only person who benefits from this situation is the real estate agent.
- Do open houses sell homes, or are they a waste of time for an owner? Massachusetts Real Estate Exposure explains why open houses are not necessary to sell a house.
Use these additional resources to become more informed about guarantee programs and other gimmicks.
About the Author: The above Real Estate information on guaranteed sales: a real estate gimmick to avoid, was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 37+ Years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
