Captain Bait & Switch – SuperVillains of Real Estate Part IV
The Harsh Truth about “Your Home Sold or, I’ll Buy it” Gimmick and the Real Estate Agents that Pedal this Marketing Scam
Introducing….Captain Bait & Switch & his most powerful weapon—The Guaranteed Sales Program.
I first want to offer my apologies to anyone who will read this article and say to themselves, Yeah, no kidding, what idiot doesn’t know that? Unfortunately, there is a real estate SuperVillain that doesn’t understand the definition of “being ethical” or “bait-n-switch,” and has become extremely adept at convincing the public that his scams are legitimate solutions—a Super-Evil Wizard of sorts….
This is only for those interested in the truth, here it is: Any real estate agent “promising” to buy your home—is never going to buy your home, and he knows that. How?
Because this is his little scheme, and he wrote the fine print to be certain it never happens.
Maybe some people are stupid, but not you. Not me. Have you ever stopped to think how any agent could offer to buy every one of his client’s homes? Unless he grew up in a rich family and has a trust fund overflowing with money, how could it be possible? How rich would he have to be? Or is it more likely, there is something extremely fishy going on here, and this “promise” isn’t real?
If you really think about it, this promise “Your Home Sold in 30 days…or We Buy it” is so stupid that it almost doesn’t deserve a response.
For the record, I have nothing personal against agents who market these kind of gimmicks, if that’s how they choose to telegraph their integrity to the world, displaying their true colors like a peacock, fine.
Some of them, I even understand why they do it. As a new agent, I was heavily pressured and encouraged by mentors to implement this sinister weapon.
The issue I have is that it is deceptive, misleading, and causes financial damage to good families. Good people.
The issue I have is that these agents conceal the truth, and advertise this program as a “solution” to the dilemma of—to buy first? Or sell first? But then nobody ever qualifies—because of that brick of fine print that consumes almost 1/3 of the ad.
Why am I bringing this up, this issue of fine print? After all, there is nothing illegal about fine print, everything has fine print; the lottery, scratch tickets, credit card companies, publisher’s clearinghouse, vacation offers, they all have fine print—the difference is—however—you are not being asked to put your trust into those things.
So, while there is nothing illegal about having a bunch of fine print, common sense tells us that putting your trust into a person who’s “word” comes with an asterisk—just isn’t smart.
However, let’s pretend for a second that the truth, and the honesty, doesn’t matter to you. Let’s pretend the seductive nature of this “promise” is just too great to ignore. Let’s pretend that you are willing to put aside all your hesitations, and all your skepticisms about it’s “too good to be true” nature. And let’s assume you’re actually wiling to put your trust into a real estate agent making this guarantee.
So, how does the program work? You’ll note in teeny tiny fine print, it says, “some restrictions do apply.”—we’ll come back to the restrictions.
This agent is not alone in offering this program. It is actually a gimmick offered by many real estate agents.
It is a “how to get rich” program sold by many sales trainers that teach real estate agents on how to get more listings and make more money. It also turns out, on Google, for the term “Guaranteed Sales Program: there are 4,210,000 search results, and it turns out, every agent is free to modify the “terms and conditions” of this program to their exact liking.
Well, here are a few of those basic conditions: Let’s look at each one carefully.
First, and this one is a huge red flag, you must agree to buy one of the agent’s other listings. Stop—read that again. That means, instead of having thousands of homes to choose from, and the best values to choose from on the market—instead—you’re restricted to only the handful of homes this agent has listed.
This begs the question: are you really willing to restrict yourself to a handful of homes, homes that may not be in desirable neighborhoods, that me be overpriced, that may not be of the size or style of home you’re interested in?
I think we both know the answer to that. But the big question is: Why are you restricted?
At this point, it really shouldn’t surprise you. So the agent making this promise can double-side the commission. If he can force you, or should I say, entice you, to buy one of his handful of listings—he can make double the commission.
This again begs the question: Is it possible he thinks you are one of the little pawns in his chess game? There are plenty of things you igh agree to, but your agent getting rich at your expense probably isn’t one of them.
Secondly, to qualify, in most cases, you’ll need to agree on a sales price that is below market value. In fact, at the recommendation of the sales trainers who teach this program to agents, as a way to make more money, advise “between 10% – 30% below market value.” But wait, that’s not counting the commission you’d normally pay for services rendered. That’s another 7% you must agree to, and credit to him at closing. This is described as the “fee” to participate.
So, to put this into perspective, if the market value of your home is $300,000—here is the fact: you’ll need to agree to sell your home for between $61,000 – $111,000 less than its worth. Put differently, for a sales price somewhere between $189,000 & $249,000. It would be impossible, not to sell that home very quickly! Now I can see why some agents off this kind of program—it can lead to a windfall of profits for them. But…what about you, and your profits?
Should we still pretend that this program is in your best financial interests?
As far as we can tell, to be interested in this program, the person would have to be certifiably insane. But, hey, while we’re pretending, let’s really click our heels together and go all the way.
The third condition to qualify, you must agree to a predetermined series of price reductions. “That’s ok,” you say, “the agent promised to buy my home in 30 days if he didn’t sell it,” how many price reductions could there possibly be in a 30 day period? Well, as it turns out…A Lot.
Because Captain Bait & Switch makes these 30-day guarantees, he doesn’t really mean 30-days. Right there in the fine print it says, “all closing dates are 90 days after signed 30 day guarantee.” In other words, from the beginning to end, tis not going to be 30 days before the Captain buys your home. It’s going to be 120 days. And every 30 days, a $10,000 price reduction, equates to a scheduled $40,000 drop in sales price.
Well—in my opinion—only a fool would agree to that. And I’m pretty certain you’re not the fool the Cap’n thinks you are.
Remember, when I said any agent who promises to buy your home—is never going to buy your home?
It’s because no smart person would ever agree to their ridiculous terms, hence—disqualifying themselves from participating.
That said, I could continue. There are actually up to 6 more conditions that the Captain and his protégé’s require for you to “qualify.” The best part is, the very last “weasel clause” buried in the fine print, says “Property qualifications requirements are at the sole discretion of real estate agent.” Ah, how fitting is that, even if you did agree to all the insane terms of this “guarantee”, you could still be disqualified from participating.
Again, I could go on-but here’s the thing: I don’t have to. You are smart. You know this is a gimmick. You know this is bait-n-switch. And you know, someone who lies to you about one thing will lie to you about countless other things. “once a liar, always a liar.”
To summarize, a lot of sophisticated studies have been done on the “ethics” and “honesty” of the real estate industry, and the data is pretty clear. And it’s because of agents like these, who intentionally set out to mislead, and deceive the public.
In fact, in a recent poll by Reader’s Digest® regarding the most trusted professions, real estate agents, ranked 42 out of 45 listed. The only three professions ranking below real estate agents: (1) Politicians (2) Telemarketers, and (3) Car Salespeople. This same sentiment was confirmed by the Gallup Poll® as well. According to the Gallup Poll®’s 2012 Honesty and Ethics Survey 80% of those polled said they did not highly trust real estate agents, and in another study—this one published by the highly-respected Harris Poll®–real estate agents, in terms of respected and trusted professions, ranked dead last below even stockbrokers, for the seventh consecutive year.
What does this evidence suggest? Is this just a coincidence that real estate agents rank so low on the trust and ethics lists? Or, is it more likely that agents like this, who promise to “buy people’s homes”, are misleading people, deceiving people, and causing financial damage to good families? Is it possible these agents care more about “listing your home”, than fostering a relationship? Could it be that, to them, you are a shot at a quick buck and a means to an end?—thus, earning their low rankings, or, should we still pretend that isn’t the case?
The bottom line is that any agent who starts on the foundation of lying to you, by attempting to mislead and deceive you—can never be trusted. One lie? Two lies? Where does it stop?
Chris Reese is the co-creator of ‘The Value-Driven Approach: A practical guide to protect yourself from REAL ESTATE GREED & bank and extra $30,000 by THINKING like the great Warren Buffett.’ He is a licensed agent with Reese Realty and a local entrepreneur as well. For a free copy of his book visit: www.FreeBook4CharityRR.com