I was asked recently about my thoughts regarding these guaranteed sale programs offered by many Realtors. In the spirit of “shining some light”, allow me to share these thoughts with you.

The program, if not originally conceived by, is a key ingredient promoted by noted real estate coach Craig Proctor. Craig is a top RE/MAX agent in Canada, and is consistently ranked near the top in sales in the world-wide RE/MAX network. His home selling system is used by thousands of agents nationwide.

In a nutshell, the agent promotes that he/she will step in and buy the client’s home in the event it doesn’t sell within a specified period of time… usually 90 or 120 days. Some are so bold as to claim that they’ll do it in 30 or 60 days.

Since I worked for such an agent in the late 1990′s, I have a pretty good idea how the program works… but each agent that uses such a program will tailor the terms to their liking, so my comments regarding the terms will remain of a general nature.

A quick search, however, revealed another local agent who doesn’t mind being more specific about the terms.

Like most of the gimmicks we see in this business, this one is just that – a gimmick. The terms will always be written in such a way as the agent is highly unlikely to buy the home, as a typical seller will never agree to the sale once they understand the ramifications.

When I first started working for the aforementioned agent, I asked him how he could afford to offer such a program. He said it was no big deal, as his marketing program sold houses before the 90 day period. Words can not describe how dismayed I was the first time I had to explain to a seller that we were NOT going to be buying his home… especially since he had another home under contract. Needless to say, I had that discussion with several sellers while working for him.

Here’s the standard boilerplate:

As a homeowner, your biggest dilemma when making a move is deciding whether to buy first or sell first. Either way is risky because you could wind up owning two homes or none at all. Well, my Unique & Innovative Guaranteed Sale Program solves this dilemma. When you take advantage of my exclusive offer, you receive my personal guarantee (in writing) that I will sell your present home at a price acceptable to you, before you take possession of your new one. This means that when you see a home that you like, you can immediately place a firm offer. In other words, I take on the risk so you don’t have to!

From a seller’s perspective, it looks very attractive. After all, who wants to get stuck with mortgages on two homes? And when a seller is comparing the services of different agents, this program will often be the determining factor in selecting the agent.

Of course, the agent downplays the whole program… usually by instilling confidence that the agent won’t need to buy the seller’s home because the agent is so great at selling homes.

We have a local agent that has taken to the airwaves advertising this program. On one of his websites (he has several) he boasts:

…That’s because I sell 91.3% of the homes I list, compared to the average agents’ low 34.1%. If you hire the wrong agent, after weeks or even months go by without your home being sold, you have to get rid of that agent and start all over again with a new agent. Many sellers go through three or more agents before getting their home finally sold, and then they tend to compromise their price severely. The homeowner who is determined to get it done right the first time, compares my track record to the records of others, and makes the obvious choice.

And in another quote from the same page:

98.4% of my clients say they would enthusiastically do business with me again.

Geez… that’s even more bold than the agent I used to work for! So I logged into the MLS to see what the data shows regarding his residential sales:

Now I know the MLS isn’t always 100% accurate, but either the MLS is totally out of whack – or someone is being rather misleading with the facts. (The data I am able to pull goes back a few years)

Posted by Doug Quance on Saturday, October 28th, 2006 at 12:46 pm.