Why Guaranteed Offer Programs are Unethical, and Should Be Illegal
When I was in RealtorⓇ school a few years ago there was a common thread among all the classes I took - once you get your license, you are wolf, and you aren’t allowed to prey on the sheep. Sheep, of course, are the unlicensed citizens of the state, the majority. What that means is that those of us with real estate licenses have specific education that makes us a little more knowledgeable about real estate than those that don’t, we’re also required to follow a set of ethics and state laws.
So when I started to read about guaranteed offer programs a few years ago I was surprised something like that would be legal. In my opinion it is the wolf preying on the sheep.
Obviously we can all agree that a guaranteed offer program is designed to make the selling process easier for the seller by not having the house on the market. The process is also designed to give the buyer a singular first look at the property so that they can bid low, buy, and sell at a higher level. The wolf is effectively preying on the shep by using their knowledge to determine the cheapest price they think the sheep will take for the home. The wolf is preying on the sheep.
Section 1-3 of the RealtorⓇ Code of Ethics states that a RealtorⓇ in attempting to secure a listing, shall not deliberately mislead the owner as to market value.
While the agent may not be attempting to secure a listing, they are trying to get the property to their buyers prior to listing, so it’s basically the same thing. The agent is misleading an unrepresented buyer into believing this is what the home is worth to the buyer, this is what they will offer them.
Sellers- be very careful about anything “guaranteed”, “competitive”, or “direct.” These agents are not doing you any favors, and in my opinion, they are unethical and borderline illegal.