 There are a "few" real estate agents out there who have decided to implement the "I'll sell your house in 60 days, or I'll buy it!" program. I've been fielding questions on this approach, so I thought I would toss in my two cents. Are they illegal? Well, anything can become illegal if you break the law doing it, but the way these programs are designed, they are perfectly legal (read the fine print). ALL OF THESE PROGRAMS have a wide range of conditions you must MEET to "qualify". I'm going to mention a few, but ANYTHING can be included, as long as it's disclosed to the seller (you) when the deal is struck.  The Seller must agree to the Agents price recommendation. Again, the Agent wants your home to sell, and in order for this to happen, it must be priced right. Comparable homes in the area will be looked at, and you'll be required to price your home 5%-10% BELOW market value. By the way CMA's (Comparative Market Analysis) are more of an "art-form" than a science. Five Agents could have a slightly different CMA on your property. In other words, an Agent could have a CMA that is 5% below market, and be able to explain why (in his OPINION)... - If you disagree, the Agent will still offer to list your home without the contract). The Seller may be required to agree to a graduated price reduction. You've agreed to a below market sales price, but after 10 days, no offers. At this point it's time for a reduction. EXAMPLE: If after 10 days no sale, the price drops 5%, or set amount. Another 5% after 20 days. 30 days, another reduction. Completely legal, if disclosed up front. Imagine what your home will sell for after 50 days, and possibly 5 reductions...? Of course it sells. - If you disagree, the Agent will still offer to list your home without the contract). Anything goes when it comes to these contracts. The contract could include provisions stating your home must remain "sellable" during the contract. If the Agent does an inspection (which you also agree too), and finds "what he feels" is a HUGE problem, they can cancel the contract (if it's not resolved to his standards). It's much like the "inspection period" when you're buying a house. This is an "out" built into the contract for the Buyer. The same goes here. - If you disagree, the Agent will still offer to list your home without the contract). ANYTHING is fair game. The contract could require the Seller to make a Facebook entry every week. Park cars inside the garage (clean it out if it's full of stuff - not a bad idea anyway). Limit children toys to a single room. Hold open houses EVERY weekend. Allow Agents to show the house at a moments notice, and have the home "sellable" as outlined in the contract during these showings... If the Seller fails to abide by the contract, it's void. - If you disagree, the Agent will still offer to list your home without the contract). Are these programs a scam? Simple, not if EVERYTHING is disclosed. Let's face it, us Agents make our living SELLING homes, not buying them. We also face huge challenges in accomplishing this goal. Homeowners and Agents don't always see, eye to eye, on many points. These contracts put the Agent in charge, and leave the Seller to simply follow along.  With that being said, there are SELLERS out there that agree to follow these contracts. Most NEED a fast sale. They're moving, bought a second home, and can't afford two mortgages. Divorce. Parents home after their death. Loss of job. Disability. Whatever it might be, they're willing to do ANYTHING to sell their homes, and they don't mind taking a back seat to the person getting it done. A GUARANTEE sounds good, and in their minds takes away some of the stress. Do I recommend them? I don't have an opinion. I'll admit, there are times when having this much control over a sale sounds GREAT..! However, I feel that terms can be agreed upon without a complex contract. If my client needs a fast sale, but they aren't willing to make the changes to their property to make it happen, I'll simply walk away. Chances are if I offered them a contract with a guarantee, the terms wouldn't be met... Putting something on paper doesn't always guarantee success. Why do Agents go this route? My comments, and those of Agents following these programs, will be VERY different. I've attended seminars (Craig Proctor) where these programs have been outlined in detail, and they don't center on SELLING your home. It's about you, the home owner, CALLING the Agent. While the program exists, it's about generating a sales lead. A guarantee is a GREAT "call to action" (sales lingo for motivating you to do something). A way to get you to call. Even if you choose not to follow the program, you're having a conversation ABOUT SELLING YOUR HOME! It's now up to the Agent to "sell themselves" to you at that point, and get your business. Put the apparent NOBLE gesture of offering a guarantee on the back burner, it's simply comes down to you dialing their number. Final thought. VERY FEW Agents end up buying their clients home. Either it sells, or the contract is broken. If the Agent does buy, it's WELL below market. It has to be, since they have expenses above and beyond the purchase (up-keep, Realtor fees, improvements). Know if you're considering a program like this, you might take a hit on the sales price. At the end of the contract period (if all terms are met), you're home will be gone. If you went without a contract, the "right" buyer could appear on day 62, buying your home at fair MARKET VALUE. |
