Any prospect who has put their home on the market knows that there is usually no guarantee that their home will sell. Homeowners further know that selling a home can be a real hassle from a number of different angles.
First, the stress of always keeping your home "presentable" can be a challenge (especially for families with kids at home), and this can go on for months with no end in sight.
The Real Estate Catch 22
Secondly, homeowners are aware of the looming and stressful possibility of what I call "The Real Estate Catch 22," which is that the sale of 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
First, note that 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 points to understand:
- A client must agree to buy one of my listings or a new home DIRECTLY THROUGH ME before I will buy their current home
- The price I will buy their home for will be "Market value" which is the price we agree together represents a realistic price (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 because my systems are so good that it's rare that I am unable to sell a client's home when they've qualified and signed up for this program.
REMEMBER: I have control over who I will accept into the program. I narrow 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 screen your candidates carefully to ensure I am 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 my listings), remember that this program will still benefit them indirectly as I'll 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.
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)
