Real Estate Investing Basics

Close More Real Estate Deals with a Contract Guarantee

193 Articles Written
real estate contract guarantee

There are a lot of “secrets” about sales that most people don’t understand. For example, if you offer a strong guarantee – such as a 100% no-questions asked money-back guarantee – your business will make a lot more money than if you didn’t offer the guarantee.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

Far too many wimpy entrepreneurs are afraid of the refunds they’re going to get and they don’t comprehend that the small amount of refunds will be dwarfed by the huge increase in sales from a rock-solid guarantee.

What does this have to do with real estate? Well, I’ve been offering a guarantee for years, and if you aren’t doing this, I want to show you how to begin. You see, the biggest problem you’ll ever face when trying to buy houses as a real estate investor is having sellers believe you. Having them believe that you’ll buy the house, close the deal, come up with the money, not rip them off and so on.

And sellers certainly have reason to be skeptical.

You can’t turn on the news or open a newspaper without seeing a headline like “Real estate scam costs 97-year-old widow her life savings.” Which is why, if you can get sellers to believe you and feel comfortable working with you… you can begin to close deals at will (assuming you know what you’re doing in other aspects of the business.)

A few of the ways to increase a sellers trust and believability in you, are:

  • To use testimonials
  • To show pictures of other deals you’ve done in the area
  • To have a credible looking website
  • To offer a courageous guarantee.

The Contract Guarantee

So here it is: When I am meeting with a seller I tell them (and if they want, I put it in writing) that they can change their mind anytime before closing and get out of the contract and we can part as friends, because we don’t want them to do business with us unless they’re 100% comfortable. Simply put, it’s a “We guarantee you’ll be 100% satisfied or you can cancel the contract even if it’s 1 minute before closing time.”

Then I go on to explain how in all the years, we’ve had two people take us up on the guarantee and that unfortunately both people lost the house. (And one wrote me a letter saying they should have closed with us, which I of course show the potential sellers.)

Now initially, this guarantee might sound a little scary to you…but think like a business person. If you start using this when you’re sitting at a seller’s kitchen table, there’s no doubt in my mind you’ll close a lot more deals.

And if someone does exercise the guarantee you should ask them for a testimonial letter (which they’ll be happy to provide) stating that you’re company kept its word and let them out of their contract.

I’ve just given you a HUGE “secret” that most investors will never know about or will never use. Have some guts and start offering this guarantee to all sellers you meet with and you’ll see the objections go down and you will find them a lot more willing to work with you.

Photo: Vectorportal

    James Hiddle
    Replied about 9 years ago
    Very interesting. How would you word this in the contract and can this work vice versa?
    Joe Manausa, MBA
    Replied about 9 years ago
    Smart idea Jason. It sure makes it easier for them to say yes, knowing they can abandon the deal when the “better deal” comes walking through the door. Nice job!