A sure sale - at a price

Mary Wager and her husband wanted to move before it got cold and snow covered the ground.

So Wager listed her home and signed a "Guaranteed Sale" contract with local ReMax Results sales agent Niki Moeller. When 90 days was up and there was no buyer, Moeller bought the Wagers' home for a price they had already negotiated and agreed upon.

The "guaranteed sale" was a safety net and it let them make a noncontingent offer on their next home, Wager said.

The current oversupply of homes on the market and slipping property values mean that more people are inquiring about such promises to buy their home if it doesn't sell, agents say. Homeowners who are interested don't want to live with the uncertainties of today's market.

The program worked for the Wagers, but as agents explain to many interested clients, "guaranteed sale" is not for everyone. For most sellers, it's better to sign up for a traditional listing agreement if they want to get the most money for their home. Some agents will guarantee a sale, after a specific period has lapsed, but at a discounted price.

Generally, Twin Cities agents who offer such guarantees will pay 80 to 90 percent of market value, depending on the property, location and condition of the home. Like sellers, the agents and real estate companies also risk trying to sell a home in today's overstocked housing market.

"It's not as popular a program as it has been in a good market," said Jeff Scislow, a ReMax sales agent who has negotiated guaranteed-sale contracts with about 50 sellers over the past 18 years. "Most sellers don't want to, or can't take 85 cents on the dollar for their home."

Many people just don't have enough equity in their home to do it, said Ryan O'Neill, whose ReMax Minnesota Real Estate team has bought one house from a seller in the two years they've offered the program.

So why offer it? Some clients really need it, say agents. Examples: homeowners who are relocating and have to sell fast, are building a new home and have a set closing date, or wish to put a noncontingent offer on their next dream home.

For some homeowners, a "guaranteed sale" simply gives them peace of mind, said O'Neill. "They know their house will sell no matter what after six months and they can move on." But if a home is priced right, it usually sells before the contract time is up, he added.

Equity needed

Guaranteed sale has been an option in this industry for many years, said Mark Allen, CEO, Minneapolis Area Association of Realtors. "But it's important that consumers understand the proposal and look over the contract carefully."

Moeller, who has advertised the program for nearly three years, said it's a marketing strategy that sets her and other agents apart. So far, she has signed on six sellers and ended up buying two homes.

She also has a "trade-up" program similar to a guaranteed sale that she said takes "the nervousness out of buying and selling."

If a buyer is interested in one of her listings, she'll guarantee the sale of their current home (by selling it or buying it herself) so they can make a noncontingent offer on the home she has listed.

"Like guaranteed sale, this program is not for everyone," she said. "The seller must have equity and we have to agree to a price upfront."

Jeff Dalen, of Lino Lakes, was curious about the "guaranteed sale" promise, but after finding out he would get less than market value, "we decided to test the waters and sell the traditional way," he said.

So far, his Lino Lakes home has been on the market for a week -- with not a single showing.

Lynn Underwood • 612-673-7619