“Guaranteed Home Sale Programs” EXPOSED 101

"Guaranteed Home Sale Programs" EXPOSED 101 9

Guaranteed Home Sale Programs

Today we’re going to be talking about Guaranteed Home Sale Programs. Because if your market is anything like my market here in Twin Cities, you’ve seen real estate agents that advertise that they will buy your home if it doesn’t sell. Or they’ll buy your home in 45 days if it doesn’t sell.

Or they will sell it for free. Sounds like a good deal, sounds like it’s almost too good to be true…So let’s dive right into today’s topic.

So Guaranteed Home Sale programs have been around for many years. I want to say that ERA Real estate originally came up with the idea or maybe Craig Proctor coaching came up with it but many agents now use it or use a version of it. And it goes something like this… An agent will say that they can sell your home in 60 days or they will buy it themselves.

Sounds great, right, who wouldn’t want that? Well not so fast, the agent is going to recommend the price. And sure agents recommend prices all the time, but in this scenario, the agent usually recommends a price that’s about 5% lower than the market value. So on a $500k house, that’s $475k. On a $300k house, that’s $285k, so it’s a significant discount.

Staging the property is of course necessary, that will be paid by the seller, usually a few thousand dollars.

And the agent is going to recommend you do all the upgrades to the house that maybe you weren’t going to do before. Oh and there will be an automatic price decrease after the first two weeks if there are still no contracts. And there are usually countless other mandatory clauses that are not originally disclosed.

It turns out that a vast majority, nearly 100% of the leads generated by guaranteed-sale offers don’t end up moving forward with the Guaranteed program due to their terms and conditions.

But that being said, what does happen? Well, these types of shady promotions, generate a lot of interest. Lots of sellers are intrigued by an offer such as an agent waiving their entire commission or a guarantee.

The seller may not move forward with the Guaranteed Sale, but what does happen? Well, the real estate agent ends up talking to a lot of motivated sellers on the phone, you know where I’m going with this.

If the agent is halfway decent or if the agent has a team that fields the incoming calls, as you may imagine, lots of appointments are set and that agent will probably end up doing a lot of business from the Guarantee, but the guarantee is set up with so many terms and conditions that the goal is to never use the Guarantee and to pivot the seller to a standard listing agreement.

The strategy is just a gimmick. It’s just marketing, that’s all it is. It’s just sketchy, shady, used car-salesman marketing. Some people say it’s bait-and-switch.

I wouldn’t go that far. With any sale or discount, no matter what you’re buying, there are restrictions. So it’s not bait-and-switch. Because there’s always going to be Terms and Conditions but any savvy consumer would never want to sell under these conditions.

It’s kind of like an infomercial where you have all these guarantees that flash up on the TV screen that you’re attracted to and then at the very bottom of the screen, you have the text in fine print that lays out the details.

I think the guarantee should be called – “I will sell your home for under market value, guaranteed”. Because if it does get to the point where the guarantee is triggered, what happened was the seller originally listed the home for 95% of the home’s value.

"Guaranteed Home Sale Programs" EXPOSED 101 10

The price was dropped maybe by 10% while it was listed. If it still doesn’t sell the agent will buy it without paying the real estate commissions so now we’re at about 75% of the home’s value. Do you really want to sell your home for 75% of the value?

Is that what you want, to sell your home for 75% of the actual value? You’re better off just selling it on your own without any agents. So when you come across these advertisements, it’s just marketing.

The reality is that 99.9% of the time, no agent will buy your home and no agent will sell your home for free.

It’s not an appealing alternative. It’s kind of like the CarMax of home selling. You can drive down to CarMax and get a couple thousand dollars for your used car but you’re probably better off taking another alternative. Just like with these Guaranteed Programs, You’re better off just going with an experienced agent who advertises on value, not gimmicks. The gimmick is to get the agent into your house and to sell you on their standard listing agreement.

It just depends on the type of agent you want to work with. Do you want an agent that advertises their value or advertises a Guarantee that will net you considerably less than a standard agreement. There’s a lot of agents that use this strategy, but the whole goal, the point of the strategy is to get you on the phone to sell you on a regular, normal listing structure.

So that is the behind-the-scenes on the Your Home Sold Guaranteed advertising, why it works, why no agent is out there selling homes for free an what really happens, the truth, not a gimmick, but the truth behind the marketing.


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