“I will sell your house in 60 Days or I will BUY it!” Wow! What a great guarantee that your home will be SOLD – something all Sellers want, right?
But, do you really think that the agent who offers that “guarantee” is really the one shelling out the cash to BUY your house?
In most cases the agent who offers this “guarantee” has a handful of investor buddies that will buy the home from you- usually at a price lower than market value. Now, I am not here to talk about why or why not selling your home for below market value is or is not a good idea. That is not the intent of this post. (We can save THAT discussion for another time…)
I want to discuss FIDUCIARY DUTY – the duties that YOUR agent – the one that YOU hire to sell YOUR house – owes to YOU.
I have been thinking about this a lot lately. There are several agents in our area that offer this “I will sell your house or I will buy it” guarantee. They may be very nice people with relatively good intentions, but I have a serious ISSUE (okay, 3 issues…) with what they are offering their potential Seller Clients.
Let’s say you hire an agent who offers this “guarantee.” This agent owes you the following (from the National Association of Realtors®):
- Loyalty: To act at all times in the best interest of the principal and to put those interests above all others, including yourself.
- Obedience: To obey promptly all lawful instructions of the principal.
- Disclosure: To disclose all known, relevant facts to the principal.
- Confidentiality: To safeguard the principal’s secrets, unless keeping the confidence would violate disclosure requirements about the property’s condition.
- Reasonable care and diligence: To diligently use real estate skills and knowledge when pursing the principal’s affairs.
- Accounting: To account for all funds and property entrusted by the principal.
First: The beauty of a real estate agent (in most cases) is that WE DO NOT GET PAID UNTIL WE SELL THE HOMES THAT WE HAVE LISTED. We can dump all kinds of time, energy and money into marketing a home, but if it does not sell, we do not get paid. Quite the motivation for us to sell our listings, isn’t it?
Well, if this agent has an investor buddy “waiting in the wings” … the agent basically has a guaranteed commission at the end of 60 days, or whenever the guarantee is. Does this really create an urgency to sell your home for top dollar in the shortest amount of time?
Second: Whose interests is the agent going to put first? You –the Seller, who may or may not ever do another deal with this agent? Or, the “investor buddies” who are good for several deals a year = more commission in the agents pocket? I see this as a complete conflict of interest.
Third: Someone looking to sell their home DESERVES the absolute BEST service and LOYALTY from the agent that they hire. A GOOD AGENT should not have to offer a “guarantee” like this to sell a home. A GOOD AGENT should KNOW the local real estate market and have EFFECTIVE MARKETING in place to SELL YOUR HOME for the most amount of money in the shortest amount of time for the current market conditions.
In a day where foreclosures are out of control, there are many folks desperate to sell. A “guarantee” like this can be very enticing. Of course, there are always exceptions, and different personal situations call for different approaches. I just want you, the Seller, to understand the possible ramifications of accepting a “guarantee” like this.