Over the years a lot of people have asked me whether I offer a home sale guarantee if they choose to list their home for sale with me. I’m sure you’ve seen the ads on tv with agents claiming that if your house doesn’t sell they will buy it. Sounds like a great deal, right? But what exactly is that asterisk referring to and what does it mean for the seller?
I’m a firm believer in the old saying that if something is too good to be true, it probably is. In the case of a home sale guarantee this adage appears to ring true. Here’s why:
- The list price will often be 5-10% lower than the actual fair market value of the home
- As part of the guarantee agreement the seller may be forced to do consistent price reductions throughout the listing period
- The seller may be forced to pay for expensive upgrades make the house more saleable which they may not see a return on
- In some cases the seller might be forced to pay for staging that they may not see a return on
- If the house doesn’t sell during the listing period, the agreed upon sale price with the agent is significantly less than the original list price
In general, sellers attracted to agents that offer a home sale guarantee rarely proceed after reading the fine print – there are often so many terms and conditions it just doesn’t make sense. While the premise is to provide the seller with peace of mind that they will not have to carry two properties, in actuality they are increasing their risk by leaving money on the table and giving complete control over to the agent.
Now I’m not saying this type of strategy never works, I just don’t believe that it is necessary. So if you’re looking for an agent who can sell your home without any gimmicks I might just be the agent for you.