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

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.

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