If it sounds too good to be true then it probably is!
In my opinion the program is simply a lead generating tool that earns Realtors business. They use “Guaranteed Sale” on their marketing to attract leads but when the consumer finds out the “Terms and Conditions” there is not a chance they will use the program but they often end up listing with the Realtor anyways.
Why do I say this: I looked into a Real Estate Website development company and here is what I found. This company creates web sites for Realtors and below are a couple of clips from their site.
Here is another clip selling this to Realtors.
This quote I found on an agents website. “Many homeowners are not initially pleased with the guaranteed price of their home because it does not reflect the true value of the property”
I was able to get my hands on a couple of agreements from different Brokerage’s and here are just some Terms and Conditions you might see. It is important to know there are other agreements out there that may be substantially different – this is just one example.
- How is Price determined? They complete a Comparative Market Analysis and then deduct the Realtor commission and then deduct up to 10%. In other words a house with a market value of $400,000 the Guaranteed Sales Price would be less than $350,000
- As a Realtor I know that if you put any property on the market for even 5% under true market value it will most likely be sold in a day and most often with competing offers.
- No One Ended Guarantees – It is a requirement that the seller purchase another property of equal or greater purchase price.
- If you cancel the contract then you must still pay full real estate commissions.
- The contract will be conditional to a home inspection at Sellers cost and seller shall be responsible for fixing all defects identified. If not completed the brokerage can terminate the entire agreement
Just my opinion it’s no wonder consumers would not sign an agreement like this.
Here is what the Real Estate Council of Alberta has to say about Guaranteed sales programs.
In summary, If it sounds too good to be true then it probably is! The Brokerages offering this Guarantee want nothing to do with buying your home – it is simply a lead generating tactic.
As a Realtor, I do not and would not ever use this program as I feel that it deceives the public and in my opinion that is not right!
As a consumer if I called a company to sell my home based on Guaranteed Sale advertising, I would feel tricked once I learned the details and that is not how I run my business.
