By Craig Proctor
RISMEDIA, Feb. 15, 2008-Anyone who has put a home on the market knows there is no guarantee that it will sell. Homeowners also know that selling a home can be a real hassle from a number of different angles. It is up to the agent to come up with a suitable solution in order to guarantee the sale of a home and most importantly-the satisfaction of the client.
Among the many challenges a home seller faces is the stress of always keeping a home “presentable” (especially for families with kids at home) at all times-after all, this can go on for months at a time.
Another challenge, which is becoming a bigger reality in today’s market, is the looming and stressful possibility of what I call, “The Real Estate Catch 22.” What this entails is the fact that their current home, and the purchase of their next one, may not coincide during a convenient time period. In other words, if they buy before selling, they may have to carry the financial burden of two homes, and if they sell before buying, they may be homeless for a period of time.
Both of these situations arise because the time frame within which a home sells is dependent on a number of factors and can vary widely.
The way I solve this for my clients is with my “Guaranteed Sale (or “Trade Up) Program,” where I offer to buy their home for cash when they trade up to one of my listings.
How the Program Works
This is a “trade-up” program, which means that to qualify for this offer, a client has to move up to one of my other listings. Here are some basic guidelines to the program:
- A client must agree to buy one of my listings directly through me before I will buy their current home.
- The price I will buy their home for will be “market value,” which is what we agree together is realistic (in the context of current market conditions, the price other similar homes sell for, etc.), minus a “Guarantee Program Fee” (see next point).
- I will pay them this market value less a 5% guaranteed sale fee. The commission then comes off this net price.
- I will only guarantee homes valued at under $500,000.
- I have negotiated an open line of credit with my lending institution to cover the possibility that I might have to buy a client’s home.
- The seller gets any offers higher than the guarantee (not me). But if no offer beats the guarantee within 120 days, I am obligated to buy their home at the upfront guaranteed price.
This is an extremely powerful offer that I am known for throughout my marketplace. I have written up hundreds of contracts but have seldom had to buy a house; my systems are so good that it’s rare that I’m unable to sell a client’s home when they’ve met my conditions and signed up for this program.
Always remember that you have total control over who you will accept into the program. As the agent, you’re narrowing the window anyway by specifying that they have to move up to one of your listings (although I have a very healthy inventory of listings in my marketplace, so this is not a very limiting factor for my clients). However, it’s important to apply your guaranteed sale program guidelines carefully to ensure you’re not in a situation of any undue risk.
Even if a seller doesn’t qualify directly (i.e. they’re not moving up to one of your listings), remember that this program will still benefit them indirectly as, like I do, you can guarantee to buy someone else’s home to get their home sold. I explain to sellers that this program makes their home more desirable to buyers as it allows buyers to place a firm offer on their home rather than a conditional one.
For those interested in implementing a Guaranteed Sale Program I recommend you attend my 3-day SuperConference where I explain the program in detail.
Benefits to Buyers:
- Eliminates the dilemma of whether to buy first or sell first by removing the potential stress of owning two homes or none at all
- Allows buyers to make a firm offer when they find a home they like
Benefits to Sellers:
- Makes seller’s home more attractive to buyers
- Sellers are more likely to get a firm offer from buyers (vs. a conditional one) because I am willing to guarantee the sale of the buyer’s home (in other words, I take all the risk)
Benefits to Agent:
- This is an offer that few other agents in your marketplace will be willing to match because they think it’s super-risky (which it actually isn’t). This sets you apart from other agents and gives you powerful leverage with prospects.
- You’ll double-end a ton of your listings and pick up backup listings.
Billion Dollar Agent Craig Proctor has been in the top 10 for RE/MAX Worldwide for 15 years and as such, “practices what he preaches.” Proctor consistently sells over 500 homes per year to earn almost $4 million in commission. Over 25,000 agents nationwide use his system to make more money in less time.
To receive free training from Proctor with no obligation, click here.
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