Real Estate Gimmicks Pt.1 – If I don’t sell it, I’ll buy it
You know that old saying, “If it sounds too good to be true, it probably is?” Well, it’s definitely true in the case of this popular real estate gimmick. In cities all across the nation, Cookeville included, you’ll occasionally see an agent run an add promising that they will buy your house if they can’t sell it. The truth is that those agents haven’t bought any houses. If you’d like to verify that, just head down to the county courthouse and see for yourself how many houses the agent owns. It’s public record, after all! In most cases you’ll find that the agent owns one house – the one they live in.
So how do they get away with it? It’s simple. The listing contract they have you sign has lots of loopholes. The most commonly used loophole is that they will buy your house, but only for a fraction of what the appraised value is. Well of course they would – who wouldn’t?! It’s likely a price you wouldn’t dream of selling at. Even more likely, it’s probably far less than your mortgage pay-off. Some agents also have clauses saying you can’t decline any showings over the course of the listing, or that you must agree to price reductions every so many days. Refuse on either point, and the obligation to buy is voided. Doesn’t sound like such a great deal now does it?
You might be wondering why an agent would choose to take this approach. It really comes down to numbers – probabilities. If 100 people call because of the ad, then a certain portion of them won’t pay much attention to the loopholes. Let’s say 40 people out of 100 sign the listing agreement. Now, a certain portion of those houses will sell if they are well priced and show beautifully. Let’s assume half, so 20 houses sell. That leaves 20 that didn’t sell. Out of those 20, probably 18 have mortgages for more than what the agent is obligated to pay to purchase the house. That leaves maybe 2 people who could possibly press the issue, assuming they were willing to sell for the low price the agent would be obligated to pay. That isn’t very likely. So you see, the odds are most certainly stacked in the agent’s favor. There may be 20 people who feel cheated at the end of the listing period, but some agents will trade 20 sales for 20 unhappy customers. For some agents, it’s just about the numbers.
Now personally, I’m not into this sort of thing. I prefer a straight forward approach, stellar marketing, and good old fashioned hard work. I suppose I feel that if someone’s product or service is really great, they don’t have to resort to gimmicks. What are your thoughts? Feel free to comment below.