Is a Guaranteed Home Sale Just a Gimmick?

Like any other business, real estate agents leverage various marketing tactics to attract potential clients. One such tactic is guaranteeing a home sale within a specific time frame, but is it a viable solution or just a gimmick?

It’s essential to understand that guaranteed home sale programs are not a magic bullet solution. 

The guarantee is often tethered to specific terms and conditions, which narrowly define the circumstances under which the guarantee applies. 

For example, before listing the property, the agent may require the homeowner to make significant repairs or renovations to facilitate the timeframe for the sale.

In this article, we’ll explore guaranteed home sale programs in more detail, explain how they work, and provide tips for homeowners to protect themselves.

What Are “Your Home Sold Guaranteed” Programs?

The “Your Home Sold Guaranteed” offer is a marketing strategy some real estate agents use to attract potential clients. Essentially, the program promises to sell your home within a specific timeframe, typically 30 to 90 days. The agent may even agree to purchase the home if it fails to sell within the allotted timeframe.

The idea is to offer a sense of security to homeowners who are looking to sell their property. It can be an attractive option for those who are under pressure to sell quickly, such as those who have already purchased another property or are facing financial difficulties.

However, it’s important to note that not all “Your Home Sold Guaranteed” programs are the same. Each program may have different terms and conditions, such as the price range of the home, the required repairs or renovations, and the specific timeframe for sale.

Also, what seems like a great deal does not guarantee a successful sale. The program’s success depends on various factors, such as the condition of the property, the local housing market, and the marketing strategies used by the agent.

Always be wary of gimmicks and dubious promises. Some agents may use these marketing ploys to attract clients but may not have the resources or ability to deliver on their promises. 

Like many sales tactics, real estate agents use it because it still works.

As a homeowner, it’s essential to perform research, ask questions, and choose a Realtor® you trust.

Example of The Guarantee Contract Terms

As seen in the example of contract terms below, they are structured in favor of the real estate agency. They can ask you to make “necessary improvements,” which may not be clearly defined, and the seller must reduce the price relatively quickly to generate offers. Once an offer is made, any offer at all, the listing agent is off the hook.

The Offer: We guarantee to sell your home in 45 days or we’ll sell it for free.

The Terms:

  • Seller agrees to stage the property if requested.
  • Seller agrees to make necessary improvements if requested.
  • Seller agrees to reduce the listing price if there are 10 showings without an offer.
  • Seller agrees to reduce the listing price if 2 weeks pass without 10 showings.
  • Seller understands that receiving an offer, even if unacceptable to the seller, fulfills the obligation to sell your home within 45 days.

This example does not specify the amount the listing price must be reduced, but some contracts will state something like 5 percent every 30 days.

Some agents also agree to purchase the home when the contract expires, but that could be as low as 70% of the market value.

Abracadabra, Your House Is Sold!

Real Estate Agents Are Not Magicians

When selling a home, some clients may have unrealistic expectations about the abilities of real estate agents. They may assume that the agent they choose has a secret ingredient to sell a home faster than other agents

However, it’s essential to understand that real estate agents are ordinary people with the same capabilities and limitations as everyone else. While some agents may have more experience or a better reputation, there is no magic formula for selling a home.

With that in mind, a good real estate agent can help expedite the selling process by leveraging their experience, hard work, and marketing skills. They can provide valuable insights into the local market, help to price the home accurately and develop a compelling marketing strategy to attract potential buyers.

Ultimately, the success of the sale depends on a variety of factors, some of which are outside of the agent’s control. For example, the condition of the home, the current state of the housing market, and other economic conditions can all impact the sale. 

Therefore, while it’s essential to choose a reputable and experienced real estate agent to help with the sale, it’s equally important to have realistic expectations and recognize that screaming success is not always guaranteed.

How Do The Programs Work?

Most guaranteed house sale agents provide you with a written guarantee of a specific selling price within a certain time frame. The agent receives no commission if they don’t achieve the guaranteed price. 

Sounds great, right? However, they value your house lower than fair market value to attract a cavalcade of buyers. Naturally, your home will sell quickly for full price.

There are usually two groups of people that respond to real estate advertisements. Sellers who believe the Realtor has a unique edge over other agents and sellers who are desperate to sell. 

How about choosing a company that promises to purchase your house quickly, without commissions or repairs? Professional house flippers are clever opportunists who, given a chance, will acquire a property below its market value.

The most important aspect of selling a home is setting the right price. Undervaluing a home is a proven strategy for getting it sold quickly.

Emotional Selling vs. Rational Selling

Guaranteed sale programs are emotional selling tactics. Desperate times call for desperate measures, and some pressure-packed sellers will see an answer to their problems.  

A listing agent’s sole duty is to maximize the price of your house. However, the handcuffs of limited time can constrain that duty. A guaranteed sale ploy comes from an agent who’s volunteering to wear those handcuffs.

Rationally, a marketing gimmick designed to benefit the real estate agent may not benefit you as a home seller. You would be better off choosing a Realtor® who can incorporate your goals into a coherent marketing plan. 

A related marketing angle targets sellers that are trying to buy another home. A guaranteed sale means you won’t have to worry about finding the right property before your existing home sells. This problem is virtually eliminated by making the sale of your existing home contingent on you finding your next home.

If you need to sell quickly, most Realtors® can help you achieve that without artificial constraints.

Guaranteed To Sell Your Home At a Discount 

Anyone can sell a house for less than it’s worth. Correct pricing is the most important factor in selling anything on the planet. Simply underprice a home if you want to sell it fast.

Ironically, it can be easier to get full value for a home by underpricing it instead of overpricing it. 

A low-priced home can attract multiple offers. Any competent Realtor would then call for  “highest and best” offers or send out counter offers to all buyers – which typically results in an offer at or near market value.

The caveats are timing and demand. Underpricing a home in a hot market will likely attract multiple offers in a short amount of time, after which a “bidding war” could ensue.  

In a slower market, a low-priced home may receive a full-price offer within a few days but there may not be additional offers for a week or two later. Then you must decide whether to wait for higher offers or accept a price below market value. It’s a fast sale but not a competitive one.

Real Estate Investors Do The Same Thing

Real estate agents don’t have a monopoly on the “guaranteed sale” concept. There’s an entire ecosystem built around buying houses quickly at a guaranteed price. Of course, the price is a moving target.

Real estate investors all over the country offer to buy homes quickly, for all cash, without commissions, closing costs, or repairs. But there’s a catch, and that catch is a below-market price.

Here’s a list of various investors that buy homes quickly:

These companies will buy your home quickly at a discount, which you can compare with local cash buyers. Soon, some of these companies may no longer be around as the real estate market softens.

For top dollar on a quick, no-hassle sale of your Bakersfield home, check out our Easy Wonk program.

Make Life Easier – Pick The Right Realtor®

As explained, any real estate agent can guarantee a home sale below market value along with a list of stipulations. The best advice is to bypass the gimmicks and find an experienced and reputable Realtor®. 

Here are some questions to ask a prospective Realtor®:

  • What’s your experience in the real estate industry?
  • How long have you been a Realtor®?
  • Do you specialize in representing sellers or buyers?
  • How many transactions have you completed in the past year?
  • What additional resources do you have to help me buy or sell a home?
  • What are the current market conditions in the local real estate market?
  • What challenges might I face when buying or selling a home?

Going Forward

Guaranteed home sale programs are simply a way for real estate agents to generate seller leads.

The guarantee doesn’t mean much since the house will either be listed below market value or the price will soon be dropped enough to generate offers. Other constraints placed on the seller ensure that the contract terms are easily fulfilled, so the agent takes very little risk.

Like with most issues in real estate, a top Realtor® can help offer clear and rational solutions.

Property Wonk can help you find an excellent Bakersfield Realtor® or connect you with pre-approved cash buyers to buy a home quickly at a competitive price.

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