A lot of Atlanta home sellers only sell a home every few years, and really do not understand all that is involved. Ever see some real estate signs that say" I buy homes!" Or "If I Can't Sell Your Home, I'll Buy It?" Rule #1 Beware - there is no easy and painless way to sell a home! So deceptive marketing is really an ethical issue. A lot of listing agents want to gain your confidence quickly and easily and list your home with them without hassle! They do not want you to interview other agents. What is the easiest way to do this? Guarantee the sale! Rule #2 If it sounds to good to be true, it's too good to be true!
Yes homes can be purchased, but you have to ask at what price? Is .70 cents on the dollar acceptable? What about .60 cents on the dollar? What if the promise to sell your home is based on performance? Guaranteed I will sell your home in 90 days, or I will buy it from you! "For good measure, if you are not completely satisfied, I will give you your money back!" Rule #3 Get it in writing, and have your lawyer review the agreement before signing!
Wait a minute! What money back? Oh, the $1500 marketing fee or the listing service fee of $2800. The fee is paid on the front side. The upfront fee that guarantees the agent that they are making money whether or not your home ever sells this decade. Think of it this way, $2500 X 100 listings = $250,000
It is my understanding from many state real estate license boards - the most common complaint they receive from disgruntled home sellers is that have signed up for these "Guaranteed Home Buy Programs" - that the listing agent never purchased their home! Gee what a surprise! The home seller has just realized a valuable lesson, there is no free lunch in life, nor is there a light at the end of the tunnel. You may have been had!
A regular real estate agent that is experienced takes all the risk when they list your home. If they do not sell it, their marketing money is lost. However, reputable agents don't charge you for their marketing expenses. Selling homes is a numbers game, but it has a reward for the listing agents when the deal is closed. All it takes to sell a home is a realistic seller that is willing to listen to the advice of a very experienced agent, and be willing to work with them to accomplish the goal.
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College Station Tx real estate is good so I'll be glad to purchase property here at 60 cents on the dollar!!! :)
But, you are correct - advertising "too good to be true" usually isn't good for the consumer!
I, always, wondered how that worked I know the one company that did it around here is not doing it so much anymore or they are not advertising it as much
Dave
Last year one of the top producing agents in my city was sued by a seller and he had to purchase it! He used that marketing technique and it backfired on him
You are SO right, Jim! This is bogus and you'd better believe that if it's too good to be true, IT probably IS!
Jim,
Thanks for sharing. I always wondered how in the heck that worked, now I know. "To good to be true" is correct.
Jose,
Like you said Jim,all it takes is a realistic home seller willing to listen to the advice of a experienced real estate agent. But the problem is that they do not want to do that. They treat one of their most precious assets as nothing. That is very scary. Great post.
Like you said Jim,all it takes is a realistic home seller willing to listen to the advice of a experienced real estate agent. But the problem is that they do not want to do that. They treat one of their most precious assets as nothing. That is very scary. Great post.
Good points Jim. If an agent is truly willing and able to buy the property at a reasonable price, more power to him / her. However, as a marketing ploy, this sets a false expectation and may even cause a rejected offer based on the clients assumption that they have a fallback position. Either way, the client loses.
Susan Hilton College Station,Texas Real Estate (CENTURY 21 Beal, Inc.) The problem with this is the listing agents never purchase the homes...ever. Even those agents that have been doing it for a while! I don't know how they do this without losing their license.
Jim, We see those ads here also. I always figured it was because they wanted to buy it at fire sale prices.
I live by that motto "if it sounds too good to be true it probably is". Wow have I learned that one the hard way over the years. I'm to the point of paying the extra price and always buying quality. I sure see a lot of people looking for that too good to be true deal though. We have lots of low areas here and when the price of land looks incredible you can almost bet the entire lot is in a flood plain.
Dave Woodson (Indigo Financial Group Inc.) With loads of homes on the market, it is risky business, and a big liability.
Lanre Folayan "Buy a home in Washington,DC" (EXIT PREMIER REALTY) I guess some folks want to believe fairy tales. Someone someday will need that sale and could go off the deep end if the home is not purchased as promised. How can an agent deal with that?
Jim, I wish these gimmicky agents would go away, but they seem to persist year after year. It is frustrating for other good agents and the public at large too.
Jean Powers CRS,PMN,ASP Broker, Northern California (Windermere Welcome Home) I absolutely love it. But when you hear about it...they had to be sued to buy it! That tells me everything. They did not buy the home in 90 days as promised.
Debe Maxwell (Helen Adams Realty) It is too good to be true, but these lies take business away from ethical agents that do everything above board. Brokers in charge do or say nothing and should be sued. If a broker is responsible in every state for reviewing their agents ads, the brokers should have the book thrown at them for allowing this!
Jose Delgado (Siuslaw Bank) It never happens!
Erik Hitzelberger, --Louisville-Bullitt County Real Estate (RE/MAX Alliance) The client does lose, but their own greed has set the stage for this to occur.
Marchel Peterson Spring TX Real Estate E-Pro ABR (Results Realty) Flood plains, under high wires etc...we know the drill. Consumers don't! They look for cheap and screw themselves to the wall big time. It is incredible...that when a person calls and they cannot understand how 5 acres can be so cheap...I tell them flood plain etc.. or maybe the land won't perk, or there is no water for a well! They think you are lying to them. The same is true on the listing side...
Gary Woltal - REALTOR® Dallas Ft. Worth (Keller Williams Realty) Gary I totally agree! They give all the hard working agents a bad name!
Jim: I think alot of these folks ARE their own BICs, which is even scarier!
Debe Maxwell (Helen Adams Realty) I agree!
Once I had a client ask me about this program after receiving a postcard. They were so irritated once they understood that it can be advertised this way.
Denver Real Estate, Highlands Ranch Real Estate, Steve Scheer (RE/MAX Masters, Inc.) They were fortunate. Most folks do not ask questions, and they just sign on the line.
I see this every now and then in Illinois - and what I recently discovered is that the rules for how an agent performs this type of service is actually spelled out quite specifically in the Illinois Real Estate License Act of 2000.
Bo Buchanan, Blue60.com Directory for Real Estate Pro's & IllinoisHouseHunter (Blue60.com & Kettley Realtors) Some states do have this regulated, most do not. For those that do, most are never enforced.
Great post Jim and you made some very good points.
Patty & Scott Carroll - RE/MAX, Vancouver WA (RE/MAX Equity Group) Thank you so much. It is good that we can get the word out, and explain these issues to home sellers.
Interesting - interesting that someone has the you know whats to make those promises and even more interesting that someone would actually buy into it! I'm slow but I'm honest!
Thanks for explaining how this scam works. It seems similar to the "We Buy Homes" signs and letters we get in the mail.
Super post, Jim. A slimeball south of here was busted for those shenanigans. Incredibly, the huckster advertised with that "I'll buy your house" pitch for quite a while till they finally nabbed him. Hope your having a great week.
Thanks for bringing this up. I have been screaming this for years.
I've never understood going about business that way... how can you get up every day and try to hoodwink people to earn your living?
Great timing. I just sent this article to a gentleman who contacted me about a week ago about new homes.
Yesterday he sent me an e-mail asking about "guaranteed buy" programs for his house. I has already answered him by mail about the programs, but this will help.
Back in the early 90s, a number of builders had marketing programs with listing brokers who would list the house, but the Draconian price reductions quickly eliminated any equity the home owners had.
Best to list with an experienced REALTOR who will price the property to sell but not give it away. If there isn't sufficient equity to price aggressively in this market, the house won't sell. But, there's no need to agree before the fact to reduce to a bare minimum level to be able to buy. Of course, it's all in the numbers.
Ive seen this type of advertising a long time ago in the boom market...I'm surprised to hear it still exsists. I even hear that title companies will put in contracts on whortsales just to find out how much the banks want...and then they have to buy it:)
Alyce Martin (Keller Williams Realty) Some folks are easy. A sucker is born every minute. Most sellers will not consider it, but I wrote this blog after I read some online complaints.
Michael Mackey (R) ABR, CRS, GRI (CENTURY 21 All Islands) I am sure there are variations of this, and there is one national company that is legitimate in this. Most of the others are playing on this, but it is more of a scam.
David Saks (The Real Estate Mart of Tennessee, Inc.) Thanks David! There are a few of these bad apples in each of our markets. Gee, why would I need more listings...let me count the ways...!
Melody Botting RE/MAX Empire Realty These are topics we should at least all be familiar with, and perhaps even discuss wiht our broker in a meeting as a topic of discussion. "Tool or Scam?"
Susie Blackmon NC Realtor, Maggie Valley, Waynesville (COLDWELL BANKER) Ask Lex Luthor! A lot of folks think that this is where folks make money, but they have a crooked view of the world. They look to gain a disproportionate share of business by hoodwinking.
Lenn Harley, Homefinders.com, MD & VA Real Estate There was a few of these agents that specialized in this marketing ploy in Atlanta, and recently they have all left their bigger companies to boutique it on their own. Obviously, in a market saturated with excess inventory...this is not even a smart idea if it could be pulled off. Sellers are faced with home values that are declining, and a real estate agent that wants to buy it from them for pennies of that low price. Not smart.
Neal Bloom-Realtor ® Assoc.-CRS-Weston FL (RE/MAX Premier Associates) Neal, I never said these folks were smart or clever. I still even see the signs and billboards all over Atlanta advertising this on their vehicles, and billboards.
JIM - I've only seen these promises made in some training programs, but I've never actually seen them practiced in my area. Of course, there is no way that anyone would guarantee that they would purchase a home at full market value, especially in this market. Sellers get sold on concepts that don't necessarily translate in the real world.
Jim, This was big stuff in our market in the early - mid 90s. It is the biggest scam ever. When sellers would ask me about it and I would explain it to them they couldn't believe it. Happened all the time here, esspecially from the agent that was being hand fed by builders. I knew one of the agents and she said that only one house was ever "bought" by the investor because the price was so under market they all sold. Leaving the sellers raked over the coals, wondering where their money went? Too good to be true for sure!
Great post, Jim. It's our responsibility to educate the general public about all these scams. I'm sure they will appreciate your comments.
Jim: You are so right. Deception should not be in our profession. You do get what you pay for and I hope all readers remember that.
Sylvie Conde, Toronto Real Estate (Sutton Group-Associates Realty Inc., Brokerage) The public needs to become more aware of deception and scams. Thye are the ones that choose what they are looking for...they may not have realized the implications.
Dianne Barody - Pensacola Florida Real Estate (Century 21 AmeriSouth Realty) Dianne ...so true.
Jim: Sounds like Craig Proctor Marketing. Of course there are many hurdles to jump to even qualify for the program. It is a way to get the phone to ring and get listings. Of course as yo say many homes may never be purchased. Yes it is a numbers game. We have a agent im my town using this system. He even beat me out of a listing using it.
Roland Woodworth "Ft. Campbell Area Realtor" (Exit Realty Clarksville) If that is what Craig Proctor teaches... shame on him! I was runner up to list a home years ago where the sellers had a limited timeframe or they would lose all. I was also beat out by one of these agents. Knowing what I was privledged to be informed about....I could not do that to a person. What is going to happen in 90 days when you do not buy them out? Are they going to blow their brains out, because a greedy agent wanted another listing feather in their cap? The home never did sell wiht the other agent, nor did he buy it.
Jim: thanks for shedding light on this for buyers as well as agents. It is sad that people who are truly in a bad situation can be preyed upon. It gives agents a bad rap.
We have some of the same kind of come ons as you stated, I dont know what percent they buy it for but i am sure it is low.
Diana Corcoran - Rhinebeck Real Estate (Paul Hallenbeck Real Estate) Sometimes folks are greedy also. They think they have found an easier softer way... perhaps not. Maybe they bonded with an agent that is similar to themselves. I am a firm believer that most agents are very above board, and very ethical.
I think if an agent is offering a gimmick, it's because they have to. They have nothing else to offer.
It's like a doctor telling you that he will cure you or pay for your funeral.
Gee, thanks?
BART WHITMORE REAL ESTATE CONSULTANT (THE REALTY MARKETPLACE) My understanding it is about 70%. You have to figure it is a low appraisal.
Sandra Carlisle, Realtor - Newport Beach - Corona del Mar (First Team Estates) Sandra, you are so right! I love it! LOL!...Or your money back! LOL!
;)
Jim, I questioned (grilled) Mike _ _ _ _ _ _ _ _ about his ad last year and he finally admitted that nobody ever made it through all the "hoops" where he would have actually been liable to close on their house! Because the GA Board of Realtors hasn't clamped down on this type of deceptive advertising, all realtors pay a price in diminished public perception from the actions of few that go unchecked. Waiting for some abused homeowner finally sue the deceptive realtor is not policing by the Board of Realtors....but a lack of respect for the general public.
I can tell you that this has been tested and succesfully fail in SW Florida. Its the biggest bag of S*!$ I have ever seen. I hope you also posted this to general public so at least one person can avoid this garbage. Thanks for the great post!
There was a big company here doing this for some time. Now it has had it run and they are done blasting this on every ad they run. Must have caught up to them the public can only be fooled so long before they catch on...
Phil I found a real estate hate site that actually mentions names, and that is why I wrote this Blog. The public is livid! You'll see the names of agents you know on it.
Bill Mitchell (Marc Joseph Realty & ForeclosureToursRUs.com) Yes I did post this to the general public. They need to know there is deception out there.
Sharon Harris (AllQuest Real Estate) They must have had folks calling the agents 365/24/7 threatening their agents with law suits in this market.
Bravo! Well said!
Our local Board of Realtors and state Real Estate Commission should stop this type of marketing ploy immediately!
Janet Larsen (Remax Connection) They needed to be on this a few years ago. It will not be pretty when there are lawsuits etc...
You hit it on the nose! When a agent come to you with this type of presentation, you better get it in writing! It is definitely to good to be true!
Great post!
Lorinda Ward (Acworth Georgia Realtor) Thank you so much! Too bad many home sellers fall for this everyday!
Hi JIm....sounds like an agent from California---good for that seller who sued and the agent had to buy it!!!!
Aida Pinto "So. Cal. REO Broker" ("The Real Estate Lady") Unfortunatley, these folks all must have attended the same seminar! The sad thing is that no ones home is ever purchased. I here the listing agents only purchase the home when forced to by the courts. It is amazing that no agent on ActiveRain chimed in and said they have been successfully doing this for years, and actually they have purchased many homes. What does that tell you?