The Old Broker Buy-Out [Scam]

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by Osman Parvez

"If I can't sell it, I'll buy it."

If you hear that line from a broker's mouth, think twice.   Usually pitched as an incentive to use a broker's listing services,  this is where the agent offers to purchase your home if they fail at attracting a buyer.

Sadly, as the market improves, the con artists will be back.   As yet another leading indicator, brokerages are once again advertising broker buy-outs.  The ads are playing on Denver radio stations.

1. Yes, the "deal" is usually real.

2.  They're a horrible deal.  At best, you're looking at liquidation value.   The broker is going to hold the house for a short period and sell it into the improving market.

If you're considering a Broker Buy-out, at least do yourself a favor and talk to a few other agents about the value of your house in the current market.   Don't let him get away with being a Transaction Broker or use a disclosure to classify YOU as a Customer.   You want a full Seller's Agent, contractually obligated to represent your interests, not his own.   Read "Who Does My Agent Represent, Again?" for more details.

While we're on this topic - be careful using an appraisal to set the asking or sale price.  Appraisals are based on historical comps and have the potential to seriously undervalue your home in a strong market (among other problems).   Have your agent show you the most recent, best possible comparables and  be sure to note the price trend (upward or downward).    Set the asking price of your home accordingly.    Pricing in the rear view mirror is a great way to leave money on the table.

The best strategy is to properly prepare the home for sale, hire a professional to advise you and market the home, and set a market LEADING price.   Depending on location, price range, and a host of other factors, there is a degree of risk.   Be conservative with how far ahead you set pricing.   You want to lead without risking a Walk of Shame.  
---Note: Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

image:  stevedepolo