I am sure you have seen those ads for Realtors where they state they’ll sell your home in 90 days, or they’ll buy it… Wonder how it works?
First off, it’s not a bad deal if you need to sell.. Again, it’s not a bad deal if YOU NEED TO SELL!!! Let’s get that straight…
Second off: Most people do not take the Realtor up on his/her offer because it isn’t for the faint of heart. This sort of offer does generally get people to list with the agent, even if they don’t take advantage of the 90 days, or I’ll buy it deal. Generally, the Realtor uses the same marketing strategy for people on the 90 day program and those that aren’t. They want people to understand that the marketing is the same.
It’s important to understand, that the last thing MOST Realtors want to do is buy your home. If they are forced to buy your home, then they will make sure they get it for a good price.
Often Times: The Realtors offering this deal will price your home very competitively(especially in this market). In some cases, they will even price your home 5-10% below market value. Then over the next 30-90 days they will reduce the price by another 5-10%. Now the home could be 80-95% below market value, and then if they are forced to buy your home, they take out their 7% commision(or whatever it is.. so now they are buying your home for 73-88% below market value… so a 100k home could be 73k, or a 1 mil home could be 730k.. Make sense?
Things to realize/consider..
- If you dont like the deal, then DO NOT DO IT!!!
- The Realtor can show you any comps he wants. So he can tailor it so your home is priced lower. This doesnt necessarily get him/her a lower price, cause they have to market to other people for 90 days. It does raise the chances your home will sell.
- In most cases, your home is going to sell before the 90 day mark, because it is priced below market value.
- If it doesn’t sell before the 90 day mark, then either it wasn’t listed properly, or it wasn’t priced correctly.
- You should be verifying that your property is listed properly(check your local mls for your home listed and at whatever the correct price is at the time). Also check to make sure the listing has all the correct details. E.g.- correct school district, # bedrooms, # baths, sq ft, sub-division, etc
- Contact multiple Realtors. Find out their marketing strategy, and whoever you sign up with, make sure they complete the marketing strategy they promised.
- Contact multiple Realtors. Make sure the comps used are the most current(3-6 months at the oldest) and closest(location, size, etc) to your property. Use your own judgement as to whether the comps are correct. Be aware that you might not agree with the Realtor offering the 90 day deal, but it’s his deal, and he doesnt have to accept your comps. He also gets to walk if he doesnt like the deal.
- If your home is priced to low, you will get multiple offers. Just last month I made a full price cash offer on a home, and someone outbid me… IT HAPPENS!!! I have run into over 6 multiple offer situations in the past 6 months. IT HAPPENS!!! Not saying you should go crazy on the discount, but if you are off a bit, the market will correct itself for you.
In the end, do your homework.. Don’t assume because a Realtor is crazy enough to offer to buy your home in 90 days, it doesn’t mean he/she has the best marketing strategy.