| by Kenneth Chase | 8 comments

Guaranteed Home Sale Programs EXPOSED

How’s it going everyone, Matt Leighton welcome
back to another real estate video. So in today’s video we’re going to be
talking about Guaranteed Home Sale Programs. Because if your market is anything like my
market here in Washington, D.C, you’ve seen real estate agents that advertise that they
will buy your home if it doesn’t sell. Or they’ll buy your home in 45 days if it
doesn’t sell. Or they will sell it for free. Sounds like a good deal, sounds like it’s
almost too good to be true…So let’s dive right into today’s topic. So guaranteed home sale programs have been
around for many years. I want to say that ERA Real estate originally
came up with the idea or maybe Craig Proctor coaching came up with it but many agents now
use it or use a version of it. And it goes something like this… An agent will say that they can sell your
home in 60 days or they will buy it themselves. Sounds great, right, who wouldn’t want that? Well not so fast, the agent is going to recommend
the price. And sure agents recommend prices all the time,
but in this scenario, the agent usually recommends a price that’s about 5% lower than the market
value. So on a $500k house, that’s $475k. On a $300k house, that’s $285k, so it’s
a significant discount. Staging the property is of course necessary,
that will be paid by the seller, usually a few thousand dollars. And the agent is going to recommend you do
all the upgrades to the house that maybe you weren’t going to do before. Oh and there will be an automatic price decrease
after the first two weeks if there are still no contracts. And there are usually countless other mandatory
clauses that are not originally disclosed. It turns out that a vast majority, nearly
100% of the leads generated by guaranteed-sale offers don’t end up moving forward with
the Guaranteed program due to their terms and conditions. But that being said, what does happen? Well, these types of shady promotions, generate
a lot of interest. Lots of sellers are intrigued by an offer
such as an agent waiving their entire commission or a guarantee. The seller may not move forward with the Guaranteed
Sale, but what does happen? Well, the real estate agent ends up talking
to a lot of motivated sellers on the phone, you know where I’m going with this. If the agent is halfway decent or if the agent
has a team that fields the incoming calls, as you may imagine, lots of appointments are
set and that agent will probably end up doing a lot of business from the Guarantee, but
the guarantee is set up with so many terms and conditions that the goal is to never use
the Guarantee and to pivot the seller to a standard listing agreement. The strategy is just a gimmick. It’s just marketing, that’s all it is. It’s just sketchy, shady, used car-salesman
marketing. Some people say it’s bait-and-switch. I wouldn’t go that far. With any sale or discount, no matter what
you’re buying, there are restrictions. So it’s not bait-and-switch. Because there’s always going to be Terms
and Conditions but any savvy consumer would never want to sell under these conditions. It’s kind of like an informercial where
you have all these guarantees that flash up on the TV screen that you’re attracted to
and then at the very bottom of the screen, you have the text in fine print that lays
out the details. I think the guarantee should be called – “I
will sell your home for under market value, guaranteed”. Because if it does get to the point where
the guarantee is triggered, what happened was the seller originally listed the home
for 95% of the home’s value. The price was dropped maybe by 10% while it
was listed. If it still doesn’t sell the agent will
buy it without paying the real estate commissions so now we’re at about 75% of the home’s
value. Do you really want to sell your home for 75%
of the value? Is that what you want, to sell your home for
75% of the actual value? You’re better off just selling it on your
own without any agents. So when you come across these advertisements,
it’s just marketing. The reality is that 99.9% of the time, no
agent will buy your home and no agent will sell your home for free. It’s not an appealing alternative. It’s kind of like the CarMax of home selling. You can drive down to CarMax and get a couple
thousand dollars for your used car but you’re probably better off taking another alternative. Just like with these Guaranteed Programs,
You’re better off just going with an experienced agent who advertises on value, not gimmicks. The gimmick is to get the agent into your
house and to sell you on their standard listing agreement. It just depends on the type of
agent you want to work with. Do you want an agent that advertises their
value or advertises a Guarantee that will net you consideribly less than a standard
agreement. There’s a lot of agents
that use this strategy, but the whole goal, the point of the strategy is to get you on
the phone to sell you on a regular, normal listing structure. So that is the behind-the-scenes on the Your
Home Sold Guaranteed advertising, why it works, why no agent is out there selling homes for
free an what really happens, the truth, not a gimmick, but the truth behind the marketing. Thanks for watching this video. Until next time, create a productive day. Take care.


Rich Conlon

Dec 12, 2018, 3:31 pm Reply

This is very helpful background information. I hear these deals on the radio all the time and have become even more curious as to the "strings" that are attached. Thanks, Matt!

Nick Rudnev

Dec 12, 2018, 5:17 pm Reply

Its a numbers game


Dec 12, 2018, 7:14 pm Reply

I had been curious about these ads…thanks for the video!

Flo Fontanella

Dec 12, 2018, 1:17 am Reply

A very well known KW agent in my area was using this recently

Dan Lesniak

Feb 2, 2019, 6:47 pm Reply

Hey Matt, I love the content you put out. It is fun to watch! We do offer the Guaranteed Sale Program at the Keri Shull and Orange Line Living Teams and I did want to point out a few things.

First, we have spent over $10 million dollars buying homes that we gave guaranteed sales to so for us it is not a gimmick. I do know that most of the people running these types of programs never buy a home, but we have bought several.

Second, the guaranteed price is less than what we can sell the home on the market. We are very open about that and disclose it up front. The number is always higher though than what wholesalers or the All Cash companies offer.

Third, most people take the standard option, but it is their choice. They get to choose up front and we'd rather give them the most options and let them choose. Some people value certainty and security more and for those that choose the guarantee program that is their primary motivation.

Fourth, it does have terms and conditions, but these are designed to make sure we can get the maximum price for selling their home. It is all designed around making sure the home looks the best and can be seen by the most amount of people.

Thanks for making the video and all of the great content you produce!

Dan Lesniak

Meg Jones

Apr 4, 2019, 12:44 pm Reply

This is amazing!! I'm sharing on my Facebook page because we've been seeing more and more of this in NJ. You're a great presenter!

Lee Allen

Jul 7, 2019, 10:46 am Reply

Matt, another way a Realtor can buy a house is the exact same way a real estate investor does.
If I can buy a house for 90 cents on the dollar on a lease purchase I will do that. I then mark the house up to about 115% of current market value and then sell it to a new buyer that has a $10k down payment. If Realtors know all the ways of making money on real estate I do they would realize they are sitting on a goldmine.
I am thinking about designing a course around this for investors and Realtors how they can make a ton of money from this.
PS: There are 3-5 profit centers in most deals.

Ellen & Barry Levy

Aug 8, 2019, 9:55 pm Reply

We GUARANTEE to sell our seller client's property at a price and terms acceptable to them or we will buy it ourselves. No gimmicks. Our listings SELL. We all know that there are "guaranteed cash offer" buyers out there. They typically offer 50% of fair market value. That's not what we do. We do NOT require sellers to do all sorts of fix-up. We do not "require" staging. We offer good advice, tremendous market knowledge, heavy-duty marketing, and extreme sensitivity to the needs of the individual seller. Our cash offer is a safety net the seller can accept if the need arises. All real estate agents are NOT the same! Call us at (202) 364-1515 and experience the difference! Ellen Levy, The Levy Team, RE/MAX Allegiance, Your Home Sold GUARANTEED or We'll Buy It!

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