Most of us are familiar with Realtor ads that go something like “I guarantee I’ll sell your home in 60 days or I’ll buy it from you.” Everyone reading this post intuitively knows that these guaranteed sales programs (or GSPs) come with fine print. So what’s the deal?
A GSP is, in reality, a lead generator. The idea of a guaranteed sale by a certain date is tempting; it’s supposed to be. It gets motivated sellers to call the agent, giving him the opportunity to meet at your home, explain the GSP and pitch himself as the best agent to list with. And from the seller’s perspective, if he is willing to guarantee a sale, he must be a really good agent, right? Well….
The fact is that GSP ads are very misleading. Terms vary from program to program, but all are designed so the agent will never actually have to purchase the home. Only certain homes/circumstances qualify for the program and/or the terms of the program are not what most sellers could or would agree to. The agent, however, once in the door, works to convince you that your home doesn’t need the GSP anyway and that he can sell your home quickly and for top dollar (bait & switch?). If the home qualifies for the GSP and the Seller agrees to the terms, the agent buyout price, commissions and other terms would necessarily result in a nice financial windfall for the agent, at the expense of his seller-client (conflict of interest?). However, because a key feature of most GSPs is the agent having control over the asking price (including periodic reductions), the home will almost always sell in the market within the allotted time without the agent buyout ever coming into play.
Understand GSPs for what they are… a misleading sales gimmick. Is an agent using this tactic an agent that you would want to represent you in selling your home?