Guaranteed Sales Program
Definition and meaning of Guaranteed Sales Program in real estate.
A guaranteed sales program is an agreement offered by some real estate brokerages where the broker commits to buying the seller's home for a predetermined price if it does not sell on the open market within a specified period. This program provides sellers with a safety net when moving or buying another home.
In more detail
These programs are designed to eliminate the uncertainty of selling a home, allowing owners to make offers on new properties without a home sale contingency. However, the guaranteed buyout price is typically lower than the property's estimated market value, often by five to ten percent.
Additionally, brokerages may charge higher commissions or marketing fees for this option. Sellers should carefully read the contract terms, as they are often required to list their home for a specific duration and at a price approved by the broker before the buyout is triggered.
Key facts
| Category | Buying & Selling |
|---|---|
| Typical buyout price | Usually five to ten percent below fair market value |
| Target audience | Sellers who need a guaranteed closing date to buy their next home |
| Watch out for | High service fees, mandatory listing price drops, and restricted eligibility rules |
A homeowner relocating for work signs up for a guaranteed sales program, knowing that if their home does not sell within ninety days, the brokerage will purchase it for a pre-negotiated price.
Frequently asked questions
Is a guaranteed sales program worth it?
It can be worth it for sellers who need guaranteed cash to buy another home quickly. However, you will likely walk away with less money than you would if you sold the home traditionally.
Do all homes qualify for a guaranteed sales program?
No, brokerages usually limit these programs to single-family homes in active markets, excluding properties that require extensive repairs or are located in slow rural areas.