When Scott and Kimberly Eppert put their West Chester Township home on the market in November 2004, they had two children, a new home under construction in Milford and plenty of anxiety about selling their home during the holidays.

“We wouldn’t have been able to afford two mortgages. Not with the upgrades we made in our new home,” Scott Eppert says.

For what seemed like a small price - 1 percent of the home’s selling price - their Realtor, Jerry Walker with RE/MAX Elite, offered them a “guaranteed sale.”

“The program basically allowed us to set a minimum price on our home and feel comfortable that if we didn’t sell it within 90 days, we’d get a buyer. It took the whole stress factor out of moving and buying a home,” Eppert says.

Several local Realtors - including Sibcy Cline, Star One, Jordan Realtors and RE/MAX - feature “Guaranteed Sale” programs on their Web sites. The requirements and terms differ slightly by broker, but the premise is simple: If a home meets specific criteria and doesn’t sell within a specified period of time - usually 90 or 120 days - the broker will purchase the home.

The coverage can protect homeowners from several months of double mortgages, but it’s a safety net that Realtors and brokers would rather not have to cast.

“It’s a win-win if we get it sold on the open market,” Walker says.

GUARANTEED SALE USUALLY PAYS OFF

House-buying made simple:

Step 1: Find a house you want to buy. Step 2: Put your home on the market. Step 3: Your Realtor buys it if your home doesn’t sell within 90 days.

It sounds too good to be true.

Then you read the requirements for what’s called “guaranteed sale” programs: No in-ground pools, unusual locations, busy streets, homes that are a dime a dozen or too unique, homes that have been on the market or have any features that are likely to keep them on the market for an extended time.

Guaranteed sale programs don’t cover every situation, seller or cost, and Realtors benefit by not using them: That’s exactly why they can be a comforting security blanket for sellers anxious about multiple mortgages but looking to get top dollar.

“It’s like insurance - we hope we never have to use it,” says Jerry Walker, a broker with RE/MAX Elite in Mason, who has been involved in more than 100 guaranteed sales.

Most guaranteed sale programs require a homeowner to sign up at the time the home is listed. Some also require a $250 application fee.

Like any home sale, the broker appraises the property, and the home is listed at a price slightly higher than the appraisal.

The broker then offers a “guaranteed sale” price that deducts the costs to own the home for three months - taxes, insurance and interest - and sometimes the cost to make cosmetic improvements.

This typically amounts to 4-7 percent off the home’s appraised value.

“If a home appraises for $150,000, I might list it for $152,500 to give a little negotiating room and guarantee it for $142,000,” Walker says.

After the seller agrees to the offer - often at the time they make an offer on another home, the Realtor agrees to purchase the home if it doesn’t sell within 90 or 120 days - before the closing for the other home. The seller, however, is not required to sell the home.

Although the offer includes several terms, including mandatory price reductions during the marketing period, brokers say the market acts as a check and balance.

“People say, ‘You’re going to give me a low-ball offer,’ but there’s no possible way. If we have to buy a home, it’s because the market has rejected it,” says Tom Letzler, president of Sibcy Cline’s Guaranteed Sale Program in Kenwood. Letzler recalls losing $70,000 on a home that he couldn’t sell for almost 10 months.

This gets to the heart of the guaranteed-sale concept. The more a home sells for, the more a Realtor makes. Although the Realtor would get the commission if a home is purchased and resold, “it’s high-stakes poker for the investors. We end up buying one out of 20 (homes with guarantees) and make money on the other 19,” Walker says.

“There’s really just three things: the right price, right presentation and right promotion,” says Larry Heidler, sales manager of Comey & Shepherd in Montgomery. “Get them right, and you’re guaranteed to get the best value for your home.”

Information from: news.enquirer.com

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