It’s becoming more prevalent these days to see real estate ads “I guarantee to sell your home within 90 days or I’ll buy it myself!”. In a down market such as we are currently in, this ad is used to lure prospective (& possibly desperate) sellers.
What does the governing regulatory body (the Real Estate Council of Alberta aka RECA) for all real estate professionals in Alberta have to say about it?
“Wary might not be the best word, but you do need to make sure you understand the details of the offer. This type of offer is a guaranteed sales agreement, and while there is nothing illegal or wrong with a real estate company offering this kind of arrangement, it is rarely the best option for consumers.”
Most outfits offering the home sale guarantee are using it to attract prospective sellers into their office – it’s the worm on the hook. Once in the office, the seller is pushed towards a normal listing arrangement. Yes, “bait & switch” is usually what happens. The hard reality is that most brokerages do not have the capital to fund the purchase of homes outright. Brokerages are regulated clearing houses, not banks with large sums of money to risk on property purchases in a soft market.
If this is something that does appeal to you, be very careful and make sure you have your lawyer read the entire agreement in full. Here are some of the typical terms/conditions:
- The guaranteed price is typically 10-20% below fair market value.
- The seller will typically need to spend money to fix & repair any issues identified by a home inspection report. And yes, the seller also pays for the home inspection.
- The guaranteed home sale typically only applies to lower priced homes (below market average benchmark).
- If you tried to sell your home before but couldn’t, it likely won’t qualify for the program.
For most people, their home is their biggest investment. Why would you not want to try to get the most for it in a sale? If you have any questions & want no nonsense answers, feel free to contact me.