About Kinder Reese
There are plenty of so-called real estate experts out there teaching agents how to succeed even though they haven’t sold a home in decades, if at all. But Kinder Reese is different. Founders Jay Kinder and Michael Reese have collectively sold more than 6,270 homes over the past two decades, they still have thriving real estate practices, and they love sharing their proven systems and processes with other agents who are serious about growing their business.
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How to Use a Guarantee to Generate Leads in a Down Market
Published by Jay Kinder
One of the tough parts of an economic downturn is that bad things happen to good people. One of those such incidents is that homeowners either lose their job or see a significant decrease in their income due to cutbacks at their company.
An unfortunate byproduct of this financial crunch is that folks can no longer afford their homes, which means they’re going to need to sell them or face a brutal hit to their credit by letting it go to foreclosure.
Share of U.S. adults who have lost a job or taken a pay cut as a result of the COVID-19 outbreak in May 2020, by income group
Now, while we as agents can’t help everyone, we can assist a number of folks with disposing of their home in a timely manner, while saving them time, money, and a considerable amount of stress in the process.
The challenge is, however, getting these folks to raise their hands so you can have a substantive conversation about the options available to them when they are in a distressed situation like this.
In my experience, one of the best ways to get these folks’ attention is to offer a Guaranteed Sales program.
Many agents say it’s a gimmick (it’s not). Some agents say it sounds hokey (the sooner you stop caring what other agents think, the better). And yet, still, other agents say it’s misleading and doesn’t work (it does work and if you employ it properly, it’s a legitimate lead generation strategy).
All of this said, rather than me just defending it, let’s talk about why it works and then how to use the guarantee to generate leads in a down market.
Why a guarantee works
Consumers of any product love a guarantee because it lowers the barrier of entry for them to take advantage of your services. It offers them the peace of mind they need to move forward because it gives them options should things not work out well after they choose to do business with you.
When it comes to home sales, a guarantee is a true differentiator and it makes the phone ring. In most cases, people call for one of three reasons:
1. They want to see if it’s a real offer
2. They think it might be a gimmick
3. They really need to sell their home
The good news is that you don’t care why they call...you just care that they call. And that’s the magic of the program. It’s going to hit some people right between the eyes. For others, it piques their curiosity enough to the point where they want to do more discovery to see what’s real and what’s not.
Again, why they call doesn’t matter. It’s that they call that matters.
Now, as it relates to a down market, the guaranteed sales program offers folks a ray of hope, if you will, that they can get out from under a financial obligation that is likely crushing not only their finances, but also their credit.
When homeowners see their financial fortunes change for the worse, they want and need a solution to make the pain go away.
Seeing that you offer them the opportunity to dispose of their home whether it sells to a buyer in the market or to you is a true beacon of opportunity for them that they will want to inspect fully. To that end, when employed properly, the guaranteed sales program will help you speak with more sellers in a down market and it will get you more listings to sell.
But wait...I can’t buy a home
When a lot of agents see this ad, they immediately disqualify themselves from the opportunity because they can’t afford to buy a home. The good news is that you don’t have to be able to buy a home in order to offer the program, you simply need to know people that can buy a home to make it work.
More specifically, you need to create a pool of investors that want to buy investment properties. Some of them will be buy and hold investors while others will be fix and flip investors. You don’t care what category they fall in, you just want folks with money who can and want to buy a good deal when it comes their way.
I suggest that if you don’t know any investors, you do some research for real estate investment clubs in your area. As well, find out which agents in your market do, in fact, buy properties for their own investment business.
It shouldn’t take you long to find a few options. Ask them if they’d be interested in making offers on homes for seller prospects that are going to be taking advantage of a special program you offer to help them sell their property.
Let them know that you’ll need offers within 72 hours and that they need to be legitimate offers. You’ll present them on their behalf and that they won’t be paying a commission to you in order to be part of your program.
Positioned properly, the offer should ring true for a few good investors (and that’s all you need).
How to Use a Guarantee
Once you have your financial backing — either your money or someone else’s — you’re off and running.
When you get a call from someone asking them about the program, tell them that you offer two options:
Immediate Buyout Program: You’ll come see their home and then get them up to three offers on their home in 72 hours.
Guaranteed Sales Program: If you can’t sell their home in a pre-agreed upon time frame at a pre-agreed upon price, you or one of your investors will step in and buy it.
In order to determine the price of the offers, though, you’ll need to see their home. Ask them when you can come over to meet them and see their home.
Say nothing more and nothing less.
When you’re at the home, there’s a very strong likelihood that they forgot why they called you.
If that’s the case, and they don’t bring it up, proceed with the listing appointment. If they bring it up, then follow these next steps:
1.) Let them know that you’re going to take pictures and get more details from them. If they want the Immediate Buyout Program, you’ll take this information to your pool of investors and come back within 72 hours with up to three offers for them to consider. They are under no obligation to accept any of those offers.
2.) If they want the Guaranteed Sales Program, let them know that you’ll put the home on the market for a price where the home will sell in 30 to 45 days (or sooner if they need). If the home doesn’t sell in that time frame, you or one of your investors will step in and buy the home at an agreed upon price (usually 70 to 75% of market value). You’ll need 30 days to close and they will still pay your commission and transaction processing fees.
3.) Once you explain this, ask them why they want a guarantee. It’s likely that they have equity in their home and would benefit from a traditional sale versus a guaranteed sale. If they’re in a distressed situation, a short sale might be the best solution for them. It’s crucial that you get all the details so that you help them do what’s best for them.
No matter what option you provide to them, always be sure to have them sign the explanation of agency relationships for your state to protect them and themselves.
The guaranteed sale has worked well for me and our coaching clients for the last two decades. When used appropriately and in an ethical manner, it can be a huge win-win for you and the homesellers in your marketplace.
If you’d like more information on the inner workings of the Guaranteed Sales program, click one of the links in this post to set up a Clarity Call with us. The program works and it can really change your listing business, especially in a down market.
About Author: Jay Kinder
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