Dear David: I’ve been watching the real estate market for the last several months and thinking about moving. A few local agents are advertising a guaranteed sale, saying they’ll buy my house if it doesn’t sell. Properties around here seem to move quickly. Under what circumstances would an agent need to buy my house? — INTRIGUED
DEAR INTRIGUED: If your home is marketed correctly, you should never be in a position where you need to use a guaranteed sale program.
“Your home sells or we buy it” guarantees are offered by several real estate brokerages in our area. My brokerage has had one in place for several decades. The guaranteed sale option is basically an insurance policy for nervous sellers. It’s designed to give some homeowners the peace of mind they need to feel comfortable buying a new home before they sell their current one.
Typically, a guaranteed sale requires that the homeowner and salesperson agree on a selling price and a closing date when they sign the listing agreement. The price a brokerage is willing to pay to guarantee a home sale will be less than what that home should bring when exposed to the open market on the MLS system. This is expected, as the brokerage is responsible for absorbing the normal carrying and closing costs before eventually selling the house.
Offers completed under the guaranteed sale program need to be fully transparent. As with any real estate contract, the associated conditions and fees should be laid out in writing. For clients, a guaranteed sale is like taking out any type of insurance: they should read and understand the details before signing on.
Guaranteed sale programs are rarely necessary but are promoted with some frequency. I don’t see too many circumstances in which a program like this would benefit the average homeowner, especially in a seller’s market like we have in Waterloo Region. When an agent prices your home correctly, prepares it for sale properly and markets it vigorously through all available channels, it sells.
PRO TIP: Real estate brokerages are in the business of selling homes, not holding on to them. As a seller, if you choose a capable agent and set your expectations according to the market, you won’t need to worry about whether they’ll buy your house back. Guaranteed sale programs are in place to ease a seller’s mind. If their agent follows normal protocols, they’ll never need to be used. Like the oxygen masks on an airplane, if you’re reaching for one, something has gone terribly wrong. #AskDavid #Advice
David is a top-selling Broker in Kitchener-Waterloo Region who helps you personally when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.