The short answer is “yes,” but know what you’re signing up for.
In a seller’s market it seems like most Lofts should sell — given enough time and exposure on the market. But there are some situations where a Loft MUST sell: the owners need to move for work or because of a job loss; or, the Loft was left in a will and proceeds need to be split among the inheritors; the sellers are experiencing divorce, or any number of other reasons a Loft needs to sell quickly.
With a quick sale required, sellers may be temped to go for an agent’s offer that sounds too good to be true: The agent will “buy your Loft if it doesn’t sell!”
According to Angie’s List, such offers are not scams. They are, in fact, marketing tactics that might work for you in your situation — a win-win — or, might be a really bad deal. Before signing on the bottom line, make certain you know what you’re agreeing to.
Loft sale guarantees
Real estate professionals may offer a variety of types of guarantees. Each has its own value to both the agent and the seller:
- “If I don’t sell your Loft, I’ll buy it” — Often, this type of guarantee offer comes from agents that work with investors. An investor wants to buy a Loft either to rent or to sell at a profit. In this scenario, you should plan to part with a chunk of your equity. This program may work for you if you need to sell quickly but don’t need top dollar from your Loft, if you need to sell to settle an estate, or if you’ve found a new Loft at a substantial discount and just can’t afford the two mortgages at once. Just know that you will see less return on this type of sale. If your agent only sells under this program and not to the general public, you’ll end up with less in your pocket.
- “If I don’t sell your Loft in X months, I’ll buy it” — When a program has time stipulations, it usually also has price stipulations. You’ll most likely be agreeing to a schedule of markdowns (monthly, bi-weekly or weekly) so that by the “I’ll buy it” date it reaches the price the agent will pay for it.
- “We guarantee you X% of the value” — In this approach, the agent offers a specific discounted price if your Loft doesn’t sell. Often, this is about 90% of its fair market value, plus fees and commissions.
The bottom line
Before you agree to any Loft sale guarantee plan, know that if the agent does not sell your Loft outright and the plan goes into effect you’ll be accepting far less for your Loft than on the open market. While this seems like a lose-lose for the typical Loft seller, it can be a win-win if the sale is urgent or the sellers have extenuating circumstances.
The best scenario
When selling your Loft, the best scenario is to work with a real estate professional that knows the Loft’s market, can advise you on the best way to prepare your Loft and create curb appeal, and offers all marketing resources (online, offline, print, local, signage, MLS, etc.).