The Guaranteed Sale Agreement
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Why would a home owner need a guarantee?
They can’t get their mortgage approved on their new purchase without having their existing property sold or the owner just wants to sell and wants the reassurance they have a firm deal.
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Can I sell for more than my guarantee?
In most cases you have 90 days to sell for higher than the agreed upon guarantee price.
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How do you come up with the price?
We use similar sales of properties in your area to determine the overall price of your home and then 7 to 10% will be taken off the approximate net you would receive on a deal in the existing market conditions.
Example: if your property was worth $350,000 on the open market, we first remove the real estate commissions and then the 7 to 10% comes off that figure giving you a net guarantee. In this scenario the guarantee would be $301,027.50 when based on 10%. The percentage that is removed is based on market conditions and where the property is located.
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Do you offer guarantees outside Calgary?
Yes we have offered this service outside the city, but it will depend again on how far out and on the current market conditions.
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Will you guarantee any price?
The maximum guarantee price is subject to change, but again it’s best to have us come out and give you a current evaluation on your property.
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So if I sell for higher than the guarantee within the 90 days what happens?
You keep the higher sale price less commissions and the guarantee becomes void.
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Can I have longer or shorter than 90 days to sell my property?
Longer than 90 days sometimes will be considered, however, less than 90 days is not as acceptable. From time to time there may be an exception to this rule which we would be more than happy to discuss with you.
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Do other agents/buyers know that I have a guarantee?
No.
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Can I cancel the guarantee after I have signed?
Yes, but you will have to pay half of the agreed upon commissions as a penalty for breaking the contract.
In most cases the home owner does not like the guarantee value, but the main thing to remember is this is not a reflection of what your home is worth. The guarantee price is slightly lower than market value but provides home owners with the assurance of knowing their home will indeed be sold.
Many home owners choose to take the guarantee because they feel comfortable that they will sell for a higher dollar and will be able to keep the higher amount when the property does sell. Best of all, it gives home owners peace of mind. We have found on numerous occasions that the home owner benefits by not having to move 2 times. It is very rare that the guarantee ever has to be used by the owner as the home typically sells within the 90 day period for a higher amount than the guarantee.
Although there may be some restrictions and some conditions may apply, the best way to figure out if a guaranteed sale will work for you is by having me come out and give you a no cost or obligation market evaluation and let you know what the guarantee price would be.