"Your Home Sold Guaranteed or we'll buy it!"
This is a very powerful, effective and emotional phrase, but are Your Home SOLD Guarantees Legit? It touches at the heart of the greatest fears and goals of home sellers. When questioned, the majority of home sellers site as two of the most important things a listing agent can do for them:
1. Find a Buyer.
2. Get the BEST Price Possible.
There are thousands, perhaps tens of thousands, of these Guaranteed Sales advertisements made by real estate agents; they're seen on websites, social media, postcards, bus stops, on grocery carts and also on radio and TV channels. They are identical or nearly so to each other; each promising the same very comforting SOUNDING words
"We'll Sell Your House In a certain number of days, At A Price Acceptable To You Or We'll Buy It!"
The similarities don't end with the catchy sales pitch phrase either. Is there substance to these very comforting and secure sounding words or…
Are Home Sold Guaranteed Programs Just Gimmicks?
a trick or device intended to attract attention, publicity, or business.
synonyms: publicity device, stunt, contrivance, eye-catching novelty, scheme, trick, dodge, ploy, subterfuge; loss-leader; informal shtick
"a trick or device intended to attract attention, publicity, or business…TRICK!"
Why Do So Many Agents Offer Home Sale Guarantees?
Because they work: they attract attention and business.
Around the country at seminars, webinars, podcasts and online training classes, Real Estate Coaches, Gurus and their Followers teach and promote the power of the "Guaranteed Sales Program" — How to structure it so it will make the agent's phone ring and protect the "AGENT". And ring it does — in one such podcast an East Coast Realtor bragged that since they had begun offering the "Home Sale Guarantee" more than 10 years ago it has been responsible for more than 90% of all their listings and home seller leads, but that less than 5% of the home owners that hired them opt for the Sales Guarantee Program (more on this below) and only once in all that time has the agent actually backed up the guarantee by purchasing a seller's home. ONCE in 10 years! WHAT?? After 10 years and according to the agent well over a thousand sales only once did they have to buy a house and less than 5% that hired them even chose the Home Sale Guarantee, how can that be? As the saying goes, '"The Devil's in the details." (More on why below — in How Do Guaranteed Sales Program Work?).
There are many real estate agents in the Virginia, Maryland and D.C. region that advertise the Guaranteed Home Sale. If you live here you have probably seen or heard them on the radio, and seen them on various advertising spaces such as grocery stores, bus stops and even on TV. If you haven't seen or heard them yet you will soon. It's a very effective strategy — effective for the agents, that is.
Why Do Sales Guarantees Look And Sound Alike?
Mostly it's because they are copied templates; there are dozens, perhaps hundreds, of real estate coaches across the country — often selling very similar products and methods to their agent clients. Because the Guarantee Sales Programs are so successful at luring home owners, they are taught by many real estate coaches.
As widespread as the training for "We'll Sell Your Home Guaranteed or We'll Buy It" is and how effective it is getting listing agreements for agents, it's small wonder that they've become so ubiquitous in real estate.
Are Guaranteed Home Sales Programs Legit?
Are they worth anything to home owners, or are they just smoke and mirrors — "gimmicks, TRICKS" — used by clever agents to make their phones ring and boost their income but offering nothing of any value to the home sellers? You'll have to decide that for yourself.
How Do "We Guarantee To Sell Your House or We'll Buy It" Programs Work?
While there are a few variations and nuances, the pitch goes something like this:
"We guarantee to sell your house in 30 days, sold in 45 days, sold in 90 days or some other number of days" "at a price acceptable to you"
This particular portion of the pitch sounds so good, yet is complete double-talk; after all, if it wasn't acceptable, you wouldn't accept it, so any offer you agree to is by definition acceptable.
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What happens if the house doesn't sell in time?
The agent will buy it at a predetermined price (FAR BELOW ITS VALUE — see details below).
Or sometimes instead of buying it the guarantee will be:
We'll pay you X dollars at settlement (X being a fraction of the commission you will pay them at closing). In this variation of the guarantee the guarantee only happens if that agent eventually does sell the house for you. So, if you let the listing expire without having a sale, the guarantee is worth nothing to you at all.
The Devil's In The Details'
How Do Guaranteed Sales Programs Work?
They typically require predetermined price drops at predetermined intervals or when a particular event or events occur or fail to occur. Examples include:
- So many days without an offer to purchase triggers a price reduction.
- So many days without a showing of the house triggers a price reduction.
- So many showings without an offer triggers a price reduction.
- The price reductions are most typically designed to take the price of the house to or almost to the "We'll Buy It Price Point"
How much will they pay for your house?
Agents aren't going to pay FMV (fair market value) for your house when they buy it. In fact, the business model for the sales price they will pay mimics that of House Flippers. This helps to guarantee the AGENTS offering these guarantees will be buying the house cheap… really cheap. How cheap? They follow the same pricing model used by the WE BUY HOUSES folks. If you live in or around Northern Virginia or virtually any other part of the country you've likely seen the corrugated plastic signs on streets everywhere. Or maybe you've seen the growing number of companies that advertise on TV. You've probably heard the familiar refrains of some of the jingles like "WE BUY YOUR HOUSE IN 7 DAYS. Whether on TV or just on hand-written signs, these are all real estate wholesalers or house flippers. What they don't bring up in their clever ads is that their business models depend on buying or stealing houses cheap, Very Cheap. How cheap ? How about 70 cents on the dollar of the ARV (After Repair Value see below) minus the costs of the repairs…is that cheap enough for you?
If for whatever reason you are truly eager or desperate enough to call any of the WE BUY HOUSES ads please don't. Even if you don't call us, call an experienced and knowledgeable realtor who will be able to get your house sold as fast as the WE BUY HOUSES crowd and you will have much more money in your pocket. If it's really urgent you may have to sell it for less than full market value but.. Not 70 to 80 cents on the dollar less!
FIND OUT THE REAL FAIR MARKET VALUE OF YOUR HOUSE
WITH A COMPREHENSIVE EVALUATION CLICK BUTTON
What does ARV mean in real estate?
ARV or After Repair Value looks not at what a property is currently worth in its present condition FMV, but instead is an estimate of what the property will be worth once it has been repaired, remodeled or otherwise brought up-to-date for maximum sales price.
Do Guaranteed Home Sale Programs Cost More?
Yes. Frequently the real estate agents that offer these programs charge a premium above their normal commission for a seller to be eligible to participate. This premium frequently more than DOUBLES the commission the agent would typically receive for selling a house and is paid whether or not the agent actually buys the home from the sellers or another person buys it. This is often cited as one of the reasons home owners elect to pass on these programs, but they still often list their properties with the agent that presented the Guaranteed Sale option. This is exactly what most of the agents that offer sales guarantees are hoping. All they want is for you to call them to list your home.
Do "If We Can't Sell It We'll Buy It" Promises Create A Conflict Of Interest?
When you hire a real estate professional there is an expectation that the Realtor is supposed to put the Sellers' best interest FIRST and seek Buyer(s) that will pay the highest price possible with the most favorable terms possible for you their clients, among other contractual and legal requirements including: loyalty, reasonable care, disclosure and obedience to lawful instruction.
The price you will receive if the "We'll Buy It" section of these Guaranteed Sales deals will be at best 70 cents or so on the dollar of your house's actual market value. Does this sound like the action you deserve from the agent that you hired to get you the most money possible for your house?
Why Don't You Offer A Guaranteed Sale?
I like to create a positive atmosphere — one where our clients can feel safe in the knowledge that we have their backs and will do everything in our power to make their real estate goals a reality.
Using Tricks, Gimmicks, Smoke and Mirrors or saying something that seems too good to be true just to get the phone to ring Doesn't seem to be the right tone or environment to begin a positive business relationship.
Instead, I focus on providing home seller clients throughout the Northern Virginia Metro area with the most advanced tactical marketing methods available anywhere — methods designed to bring you the BEST price and terms for your home — NOT a Guaranteed Sale at a Rock-Bottom price.
Our marketing is so effective that in the past year ALL of our home sellers received multiple competing contracts within just days or a few weeks and all SOLD above their list prices.
"Home Sold Guarantees — Are They Legit"
is brought to you courtesy of Dave Martin Realty Group, your Northern Virginia residential real estate experts. If you're considering selling or buying a house in the Northern Virginia metro area, we'd love an opportunity to earn your business, provide you an outstanding experience, and demonstrate to you that:
"Help From The Best Agent Makes All The Difference."