Especially at this time in the real estate cycle in Calgary, we are in a Slump, and may have certain reasons why you want to sell your house fast. An attractive program is to working with an agent to list your house with that provides a Guaranteed Sold Program. The isn't anything illegal or wrong about using this strategy, and it is attractive for individuals that are in a time crunch to sell their home. But it is rare that the program is in your best interest as a home seller.
CIR Realty does not offer this program because we share the same feeling as RECA does, and that is (according to RECA) "it is rarely the best option for consumers." RECA is the independent, non-government agency responsible for the regulation of Alberta’s real estate industry. We license, govern, and set the standards of practice for all real estate, mortgage brokerage, and real estate appraisal professionals in Alberta.
"I saw an ad saying a real estate professional will buy my house if it’s not sold in 90 days. Should I be wary?"
Real Estate Agents can offer these programs if their brokerage allows these types of program. These brokerages often have policies that govern these programs and should include how the brokerage sets the guaranteed sales price and who is in control of the property’s listing price during the listing period. Most times, the listing price is not controlled by the seller. It’s not unusual for a guaranteed sales agreement to include a clause that requires a seller to lower their listing price during the term of the listing (can have multiple price drops within the 90 day period). Those real estate agents and brokerages wants to minimize their risk (not yours). It prefers to sell your property to a buyer rather than to use the guaranteed sales agreement, and lowering the listing price is the best way to avoid what they've promised.
The brokerage and agent formulates the guaranteed purchase price using a formula where legal fees, carrying cost, and commission on the resale are subtracted from the purchase price. This minimizes the brokerage’s risk, but it can also greatly reduce how much that seller receives for their home. It's also rare that a guaranteed purchase price will be based on the property’s listing price or the property’s market value. With uncertainty in the current Calgary Climate, the price my be well below what you consider as fair market value.
If you decide to work with a Calgary Real Estate Agent that provides these services, make sure you read and understand all of the fine print.
Some marketing tactics that we've seen about the Guaranteed Sold Program.
High mortgage? Rental Property not working out.
It doesn’t matter whether you live in it, you’re renting it out, it’s vacant, or not even habitable.
We help owners who have inherited an unwanted property, own a vacant house, are behind on payments, owe liens, downsized and can’t sell… even if the house needs repairs that you can’t pay for… and yes, even if the house is fire damaged or has bad rental tenants.
If you have a property and need to sell it… we’d like to make you a cash offer and close on it when you’re ready to sell.
Buy your House for Cash
- The purchase price of the home will be 5% below market value
- Commissions and all other costs associated with the sale will come off of the net value (In Canada, that is a lot more than just 5%, it’s closer to 9%)
- You have to buy your next home through the listing agent and it has to be one of their listings
- According to the program it will only work for a sale price below the area’s average (In Canada that would be about $500,000 and below)