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Mumbling Out Loud

Do you offer a guarantee?

By: Ron Tarvin
Friday, March 23, 2007 11:02 AM

This is a topic that is near and dear to me...especially as I answered one of the posts made earlier about Days On Market.   As I answered that question, specifically about the Katy Texas Real Estate market,  I realized that in the last three years that I have been offering my guarantee, I have NEVER had a client use my guarantee to cancel a listing agreement.  So on top of never having had an expired listing (minus a withdrawn from the market which doesn't count because the home wasn't actually being marketed) in the last three years, I have never had a seller FIRE me for not doing my job.

My guarantee is pretty simple really, and while I won't bore you with the exact wording, it basically states that if at anytime the seller does not feel I am doing my job, to let me know and I have 7 days to correct the issue.  If I do not correct it, they are free to cancel the listing agreement with no repercussions from my broker.

 

Now recently I have been seeing some "MONEY" guarantees and I wondered, what's YOUR guarantee to your client when they hire you?

 

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Comments

Lonn Dugan
Member Since '05

Lonn Dugan said:

I guarantee hard work, and a quality job.  If I cannot earn your business, I don't want to lock you in to it.  I guarantee satisfaction or seller can be released for "any reason".  

Sometimes I add "after 90 days".  Verbally, I ask for the chance to fix it if something is wrong, which all agree to.  

Only a couple times in 100 listings has any seller wanted out.  I let them out.  Once was a change of their plans.  I think one went to another Realtor.  I don't care.  I believe what I say.  If I can't earn your business I don't want it.  Few will respond to honest effort by trying to take advantage of such a guarantee.  

Yes, I know what a legal morass that is.  But it gets me through a lot of objections in the listing presentation and is rarely acted upon by a seller.

The money ones bother me.   I have researched them.  

Maybe the bother me enought that I will offer one....

Just to have it in the mix.

March 23, 2007 10:19 AM
Mary Welch
Member Since '04

Mary Welch said:

Ron, when I list, I present my "30 day marketing plan". I rarely let the seller know they can get out of the LA because we are in a small town where everyone knows everyone else and occassionally we get buyers go right to the seller to make a "deal" behind our back. Since they are resonding to MY advertising, I will not give that one up. But, I have agreed probably 2x in the last 8 years that if the seller is not happy with my service we can part company. But I have only brought this up because of a previous bad experience the seller had with another agency/agent.  Basically, I try to conform to the needs of my clients.

March 23, 2007 10:25 AM
Lew Corcoran
Member Since '03

Lew Corcoran said:

I do offer a guarantee to both Buyers and Sellers.  Simply stated, they can fire me anytime if they're not happy with the service I provide.  

I tell my Buyers and Sellers that "if we're not "clicking," there's no sense in working with each other. If you want out, it's done. Simple as that. What matters to me is you get the service you want, expect and deserve."  

This takes the vast majority of objections right off the table. The Buyers and Sellers are so dumbfounded they don't know what to say - except to say they're ready to work with me!

March 23, 2007 10:50 AM
Ritu Desai
Member Since '04

Ritu Desai said:

I work similar way as mentioned by Mary & Lew. If it is not working out I don't want to waste my time and money. MOVE ON...in past 3.5 years I had only 1 incident but I was on maternity leave and I had someone take care of those folks...

March 23, 2007 11:22 AM
Steven Burnett
Member Since '06

Steven Burnett said:

I have an Easy Out clause as well.  No longer do I guarantee that their home will sell in 60 days or less though! HA!

March 23, 2007 11:38 AM
Dan Tolman
Member Since '06

Dan Tolman said:

I put everything I am going to do in writing, sign it and give a copy to my client.  Then I do those things and a 100 more as we all do.

If I've worked hard and allocated assets to research, consult on and market a listing, I'm not interested in putting myself into a position where I can be removed from a listing over a small detail that most likely can be cleared up with a conversation.

March 23, 2007 11:44 AM
Klaus Nicholson
Member Since '07

Klaus Nicholson said:

No guarantees, and I have not encountered money guarantees yet.  If you're not happy with my efforts,  notice is unnecessary, explanations are unnecessary, date and signature on withdrawal notice

is necessary.  Simple, friendly and always upfront.  Disclose, Disclose and get it in writing.  Good luck y'all

March 23, 2007 11:46 AM
Howard Arnoff
Member Since '03

Howard Arnoff said:

Similarly, if you aren't happy with me, we part as friends. Hasn't happened. As to the money guarantees, I looked into how to offer them a long time ago and you are pricing the house to sell very quickly, probably 20% below market so that you aren't on the hook to buy it in 60 or 90 days. The seller doesn't really want that and you aren't doing a very good service to the seller with that approach. In today's market, no way.

March 23, 2007 12:03 PM
Lonn Dugan
Member Since '05

Lonn Dugan said:

Actually there is another model, where you buy an annuity kind of insurance product - IF THE HOUSE DOES NOT SELL.

You advertise that sellers can get $10,000 if house does not sell in 90 days.  To get the money, sellers have to price right (per agent), follow presentation and showing advice, etc...  the deal is, they only get the $10,000 as follows.

1 - the house fails to sell in 90 days

2 - seller stays with listing agent until it does sell eventually

3 - the realtor pays about $1500 for each certificate issues (only at closing, only if it closes, only if seller did not sell in 90 days....

4 - the $10,000 comes in the form of a certificate of deposit made in seller name that does not mature for about 3 years

BEFORE YOU CLICK OFF - consider this....

Seller would not be likely to fire the realtor if this was in place

Seller may consider selling for $5000 or $10,000 less than they would otherwise take if this was in place.

Certificate may bridge the gap if best offer is $10,000 under what seller wants, while the cost of the certificate is less than 1/4 the commission.

In other words, 75% of something is better than 100% of nothing (for the Realtor)

Seller really does get the $10,000 and real estate investing or any financial planning is a long term, big picture game anyway... so who cares when the money comes as long as it comes.

Deposits are insured by FDIC and supervised by Chase Bank or some other MAJOR NAME

I am seriously considering adding this to my arsenal.  It just sounds too good to be true, makes me sound like a snake oil salesman, and nobody else is doing it around here, so I delay...

But - every word is true and it's not half bad, and i know a gal who is remax platimum who uses it and basically OWNS her town.... maybe even her county...

So.....  hmmmm.....

March 23, 2007 12:33 PM
Rob  Miller
Member Since '06

Rob Miller said:

I do offer a service guarantee as stated in my Listing presentation. Basically, I tell the client that they can fire me if I do not do anything in my marketing plan. If they can present to me any evidence that I did not do something, then I will try to rectify the problem if not then I will release them from the contract. On the other hand, If I can prove that I am doing what I said I would, then I won't release the contract, I will only withdraw if they still insist. We all work hard to get the business, we need to know the right reasons for releasing from contracts. I have had clients in the past ask to be released from the contract only to have them go straight to another agent that offered a lower commission. I feel that the client offered you a job and if you are not going to perform or hide behind a six month listing never showing your face, then you should be fired. Perform as you say you will and the service guarantee really means nothing to you, only as a great selling point to the sellers.

March 23, 2007 12:33 PM
Matt Wilson
Member Since '05

Matt Wilson said:

1500 will become 10,000 in 3 years? What is that 100% interest. Where do you get that?

March 23, 2007 1:15 PM
Ron Tarvin
Member Since '04

Ron Tarvin said:

Lonn, I can't find any information on this certificate...is that a Re/Max thing or perhaps just your office?

March 23, 2007 2:01 PM
Sara Kareer
Member Since '07

Sara Kareer said:

a

March 23, 2007 5:01 PM
Ron Tarvin
Member Since '04

Ron Tarvin said:

Well said Sara!  =)

March 23, 2007 5:20 PM
Mipeco Realty, Inc -  Michaela Krestenic, Broker-Owner
Member Since '03

Mipeco Realty, Inc - Michaela Krestenic, Broker-Owner said:

Lonn, where's the additional $8500 coming from? It just doesn't sound real. Can you provide more info?

March 23, 2007 7:47 PM

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