We've all seen the billboards and heard the radio advertisements. "Your home sold...GUARANTEED!" or "If I can't sell your home I'll buy it myself!"
Alright let's do some digging here. Because most people don't buy or sell homes every day, or year, or few years for that matter, they don't know what they don't know, and it's not their fault. You shouldn't feel bad about not knowing all the ins and outs of the real estate business or exactly where the market stands at all times because you aren't a real estate professional. That's why I have a job. But when it comes to marketing real estate services to the public, it's all about the guarantee. People like guarantees. People like being told that the outcome they want or need is "guaranteed" to happen.
So why is this "Sellers Guarantee" a bad thing? Well, truth be told, it's not a bad thing. It's just probably not what you think it is or what the person advertising to you wants you to think it is. Let's be honest, any realtor who walks in the front door to your home and says "Mr./Mrs. Seller, I guarantee that your home will sell for this amount of money" is completely full of garbage. I mean, they could say that, but that number would have to be WELL below market value for that to hold any weight or for that particular realtor to be able to tell you that in good faith.
Let me walk you through an example so you can see what I mean. Okay, you are thinking about selling your home and you hear on the radio that this realtor or company is guaranteeing your home will be sold or they will buy it from you. First off, yes, EVERY home will sell for the right price. So you call up this realtor and set up an appointment to talk about selling your home. They walk in the next evening and begin their presentation.
In all likelihood, they won't even mention the Seller Guarantee unless you ask about it. If you do ask about it, they are likely to say something like this: "Your home is worth $200,000 according to the comps in the area. It's a seller's market so I think we should list it at $205,000. If your home doesn't sell in 4-6 weeks then we will offer to buy your home for $185,000 minus commissions and fees."
So you're sitting there thinking to yourself "You told me my home would sell, guaranteed. You told me if it didn't sell you would buy it from me. Now you are saying that you will offer to pay me roughly 90 percent of what YOU told me my home was worth and THEN I have to pay commissions and fees?"
Yes, that is what they are telling you. But hey, it made their phone ring, right? Next they will tell you how awesome your home is and that it's going to sell and you won't even need the guaranteed sale program (not that you would take that offer anyways).
Now there are a few different variations of this type of plan, but that is the basic gist. So when you hear "Your home sold GUARANTEED" please understand that EVERY home is guaranteed to sell at the right price. Buying it from you for 83-85 cents on the dollar likely is not in your budget.