It starts with a telephone call
Recently a client of mine told me that he received a call from a fairly well known realtor. She asked if he was considering selling his home and that she had buyers looking for houses just like his in his neighbourhood. My client declined as he has recently purchased a pre-construction home that will not be ready for at least a year, probably more. He is going to sell, just not soon.
Before he could get the agent off the phone, the agent said, “I have a guaranteed sold program”.
My client was not impressed. Dubious.
I did read the small print once on a local agent’s guaranteed sold program. I wrote about it here. –> Read the small print
Marketing, marketing and gimmicks
Guaranteed sold programs are a marketing tactic mostly for real estate teams, or big volume dealers, like MacDonalds where your home is a Big Mac. The offer is attention grabbing. It offers sense of security for home sellers. It is also gimmicky. We all know that nothing is guaranteed but death and taxes and that there is no such thing as a free lunch. Mixing metaphors, sheesh.
A monkey could do it
With inventory levels so low, I am not surprised that listing realtors are manning the phones and interrupting home owners with enticing offers. I’ve had realtors knocking on my door twice in the past year, not to mention the postcards, flyers and notepads in my mailbox.
But if you are paying attention you’ll know that it is a seller’s market and any house with or without a guarantee will likely sell. A quick look at my own activity spreadsheet reveals that only 10% of homes that my clients have shown interest in have not sold. I’ve shown 132 homes so far this year. 13 have been cancelled or suspended. To you, 10% may seem high, but that is actually less than half of what it typically is. Inventory is tighter than a second coat of paint.
Buying the business
I’ve been a realtor long enough now to see the rise and fall of some big name realtors. It costs a lot of money to be a regular realtor. But it costs a BIG Boatload of money to be a BIG name realtor. The bus benches, the bus wraps, the magazine spreads, the yard signs and directional signage and now more and more the realtor recommendation websites and generic blog posts written by some big marketing firm somewhere, where they put Waterloo Region in the first line of the post, but the rest is just general nonsense. They are not fooling anyone. My feeling is that when realtors put themselves under a lot of (financial) pressure, they are going to transfer some of that pressure to their clients.