Pros, Cons, and Best Practices of a 'Guaranteed Sold' Program in Real Estate
Resource Library Blog

Pros, Cons, and Best Practices of a ‘Guaranteed Sold’ Program

A guaranteed sale is attention-grabbing, providing an immediate sense of security for the seller. At face value, as an agent, it gives you a leg up on the competition. It shows the seller, “Look, I’m so confident that I can sell your house, I’m willing to buy it if I cant.” Sounds pretty good, right?

 

Well, the downside is it’s gimmicky reputation. So few sellers actually follow through with the offer due to fine-print details, and low valuations. This is why it’s a marketing tactic. Get them in the door, and it doesn’t matter if they use the program or not.

 

Even so, it remains a popular choice for many top producers. So, is it worth implementing a guaranteed sales program for your business? Let’s break it down.

The Pros

It’s Popular for a Reason
 

The guaranteed sale is a marketing tactic that tends to work. Whether leads participate in the program or not, doesn’t really matter. The leads are already engaged and a conversation has started. Top producers that offer a program rave about the interest that they generate.

At least 9 out of the Top 20 most productive teams in 2017 offer a guaranteed sales program

Relatively Low-Risk
 

The trend seems to be that most leads generated from a guaranteed sold program do not actually end up using the program. However, once they’ve given you their information and they’ve spent all of this time talking with you, they’re already a pretty solid lead. You know their story, you know what they’re looking for. Although the term feels a little slimy…it’s a traditional “bait and switch” marketing tactic.
 
Transparent? Debatable. Effective? Yes.
 
If Done Right, it Can be Good for Some Sellers
 
The key here being, “if done right.” And we’ll get into those best practices a little later. If you offer a fair program, with fine print that doesn’t give your sellers the raw end of the deal, this can actually be a good option for some clients.
 
One of the biggest benefits is that it gives sellers peace of mind when facing the “real estate catch 22.” Sellers are burdened with the stress of the timelines lining up of their new home closing and their old home selling. Nobody wants to be “in limbo” without a home. This program gives an exact timeline for a sale, so if a particular seller puts a higher value on security than they do on selling at or above the market value… this could be a good program for them.
 

The Cons

Reputation
 
If you Google, “Guaranteed Sold Program,” here are some of the headlines on the first page:

“Guaranteed Home Sale Programs are Gimmicks”
“Guaranteed Home Sales: A Profitable Gimmick for Many Top Producers”
“Guaranteed Sale Program – What They Don’t Tell You…”

Marketing tactic, marketing gimmick…what’s the difference really? It’s all in the perception of the consumer. A really good marketing tactic is virtually invisible to the consumer. They can’t see the “man behind the curtain.” In this case, you are working with a program that feels very “salesy,” (think classic used-car salesman), which puts a potential lead on edge.
 

Real estate is a trust-based business. Your clients are trusting you with one of their most valued possessions in their entire lives – their home. They want to know that you have their best interest at heart.
 

It all comes down to what you offer. Say your program takes advantage of the client by lowering the price of their home far below the market value, or taking excessive commission percentages. If that client goes through with the program and then realizes later that they got the raw end of the deal… you’re losing out on referrals and reviews that could have meant more opportunity.
 
Not Ideal for Small Teams or Single Agents
 

Even though the enrollment in these programs tends to be low, you still have to be prepared for the possibility that every new lead wants to take advantage of the offer.
 
Simply put, the smaller the team, the greater the personal risk. A top producing team has the liquid capital that can cover the cost of quickly buying and selling a house. Whereas a smaller team or single agent – that cost falls on your shoulders. So if, by chance, several of these guaranteed sales were to pile up back to back, you have to deliver or you breach a contract.
 
If you are considering offering a guaranteed sold program, make sure you have the necessary parts in place first. Speak to a coach or a real estate mentor who has been through the same process.

Best Practices

 
So you’ve weighed the pros and cons, and you’re thinking that a guaranteed sold program could be a good marketing strategy for your business.
 
Now let’s go over some best practices for running a profitable and honest guaranteed sales program.
 
1. Don’t be Greedy
 
Remember how we talked about how guaranteed sold programs generate leads?
 
You’re already creating more opportunities for your business with a successful marketing ploy – so don’t go overboard with your contract. Some contracts will start by listing the house a certain percentage (maybe 3 or 5%) below the market value. From there, they will include several percentage deductions (ex: 10% every 30 days).

By the end of the contract period, if the home hasn’t sold, with all of the price deductions and closings costs, the seller could be looking at less than 70% of their home value.

At the end of the day, of course you want to generate revenue. You can turn around and sell that house for a profit. But, will that deal result in a happy client? Will that client want to buy their next house with you? Refer you? Maybe not. Try to be reasonable and fair with home value percentage decreases, closing costs, commission percentages and other fine-print details.
 
2. Consider a More Palatable Variation
 
There are a few options for programs that still drum up a lot of leads, without being quite as involved as offering to buy the house.
 
For example;

“Sell it yourself while it’s listed with us and you pay nothing!”
“Guaranteed sold, or we’ll sell it for free.”

3. Be Good at Selling Houses
 
Alright, this is an obvious one here. But it’s the reason why these guaranteed sold programs work for top producing teams. It’s because they very rarely – if ever – have to buy the house.
 
If your track record shows that you can sell a house and make a client happy within 30, or 60, or 90 days – then this program could work for you. The seller gets an added layer of security and peace of mind, and you sell the house like you would any other house. Everybody goes home happy.


Improve Your Lead Follow Up. Click Here


Don't miss the conversation.

Join thousands of real estate professionals and get the strategies you need, straight to your inbox.

Give it a try. It only takes a click to unsubscribe.

Similar Content


How To - November Graphic

FREE DOWNLOAD

3 Common Problems for Real Estate Agents
(and how to solve them)



Speed to Lead

FREE DOWNLOAD

The Modern Agent’s Guide to Social Media Strategy



Speed to Lead

FREE DOWNLOAD

If you don’t follow up, someone else will. Here you’ll find some surprising numbers about speed-to-lead and learn how YOU can take advantage of missed opportunity ($)



The Essential Guide to Building a Real Estate Business

Ask yourself, do you want to sell houses for the rest of your life or do you want to build a thriving business? In this guide, Jeff Cohn, founder of Elite Real Estate Systems, teaches us how to focus on being a business owner and not just an agent.




Download the Tip Sheet

5 Powerful Business Tips from Steve Harney




Download our Free Guide

The 3 P’s for Winning Listings




Download

4 Steps to a Winning Listing Presentation

It’s time to learn how to land any listing. Here are 4 tried-and-true tips for preparing a listing presentation that wins every time!




Download the Tip Sheet

4 Pillars to Creating & Maintaining a Successful Lead Management Program




7 Tips to Getting Your Agents to Adopt New Technology

They say a tool is only as good as the one who wields it…and this couldn’t be more true with real estate technology. Here you’ll learn how to assure (once and for all) that your agents will adopt the technology that you’ve invested in.




Download the Tip Sheet

Powerful Prospecting Lessons to Build Your Business




Download the Tip Sheet

How to be a Winner in the Real Estate World




How to Structure Your Team for Lead Follow-Up

Lead follow-up is oftentimes what separates the good from the great. In this guide you’ll learn how to structure your team (from the top) for smooth and effective lead follow-up.




Say Hello to Hiring: The Essential Guide to Growing a Team

Expanding your real estate business is an exciting and lucrative time. And in real estate, we know it’s all about your people. Check out this free guide with tips for effective hiring practices.




The Modern Real Estate Chief Marketing Officer

In real estate today it’s not enough to just be great at selling houses. In this guide we’ll cover how and why you should consider investing in a Chief Marketing Officer.




Download

6 Tips for Standing out Against Competitors [Free Tip Sheet]

In real estate, things move fast and the competition doesn’t sleep. So, what are you doing to stand out? In order to be the go-to agent, you need to be one step ahead of your competitors. Start with these 6 quick tips.




Register for the Series

Fill out this form and register for all of our upcoming webinars at once!





Ready to see a demo?

See what BoomTown can do for your business.





FREE: 1-3-5 Goal Setting Template

Turn dreams of success into celebrations of success. Stay on track with our goal worksheet.


Seller Lead eBook

How Top Agents Survive (and Thrive) in a Turning Real Estate Market

What do you do when the real estate market shifts? When the pendulum swings from buyers to sellers (or vice versa) in your market, make sure you’re ready.



FREE SCRIPTS

Want to handle objections like a champion?
Download our scripts playbook!




Seller Lead eBook

FREE DOWNLOAD

Convert seller leads. Get the best strategies to conquer listings in your market.



The Real Estate Teams Playbook

We partnered with REAL Trends to conduct interviews with thousands of real estate professionals and the industry’s top performing teams. This playbook contains all of their best strategies for starting and growing a team as well as the systems that must be in place to ensure long-term success.