I want to sell my home quickly. I hear that some companies in town will buy my house if it doesn’t sell right away. Is this a good bet? – HOPEFUL
DEAR HOPEFUL: There are many agents in our area who advertise that they will buy your house if it doesn’t sell. These “guaranteed sale” programs are widely available and have been for decades. The brokerage I work for has a program like this in place, though it’s virtually never used.
Guaranteed sale programs are meant to bring peace of mind to nervous homeowners who may want to buy a new home before they sell their current one. In a nutshell, these agreements state that if the brokerage lists your home for sale and it fails to sell by a pre-determined date, they’ll buy the property from you at a price that is decided when you first sign the listing agreement.
Before the brokerage arrives at their guaranteed sale price, they may want you to complete a third-party appraisal and a home inspection of your property. It’s similar to the way a life insurance company will often require a health check before they issue a policy. Like an insurance policy, a guaranteed sale agreement has certain limitations. The price that a brokerage is willing to pay for a guaranteed sale will be less than what that property will bring when exposed to the open market. Don’t let this surprise you. The brokerage will be on the hook for the carrying and closing costs associated with the sale, and will also need to re-sell the home, so they’ll want to recoup these expenses.
Before you consider a guaranteed sale program, it’s important to know exactly what is involved. Take time to understand the terms of the arrangement, all potential costs and limitations, the fee considerations, and the exact dollar amount (after expenses) you will net once the sale of your home closes. This information should be spelled out clearly and in writing, as with any real estate contract. Ask the agent to show you their last four or five sales of this type, and have them explain why those homes didn’t sell the first time around.
At the end of the day, any shortcut you take when selling your home is likely to come at a cost. It’s important to stick to a sound strategy if you want to achieve the best return on your largest investment. I always recommend choosing an experienced agent who will prepare your home for sale, price it correctly, and market it vigorously through all available channels. If these steps are taken, your home will sell.
PRO TIP: Realtors are in the business of selling homes, not buying them. If I do my job effectively, I don’t see any circumstance in which a guaranteed sale option would benefit the average homeowner. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.