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Home > Archive > Feb 21, 2008

Taking His Guarantee to the Limits
By Cami Cox
Staff Writer
ERA Brokers Consolidated in St. George claims the national ERA slogan: “We will sell your house, or ERA will buy it!” But in the 25 years they've been in business, the agents at the local ERA have never had to make good on that claim. Until recently.
“It's quite rare, actually,” ERA Principal Broker Thayne Houston said, “because we typically are successful in selling the home before the buyout comes due.”
In December, however, Houston personally bought a home listed under ERA's Seller Security Plan Program, which guarantees homeowners that if their houses aren't sold within six months of listing, ERA corporate will purchase the home at 90 percent of its appraised value.
Last year, a client was accepted into the Seller Security Plan, the terms of which state in fine print that once an offer has been made and accepted for a client's home, the ERA Seller Security contract comes to an end. Neither Houston nor his client was aware of that stipulation, so when an offer was made on his house, Houston's client proceeded with the understanding that ERA would still buy his home should the offer fall through. In the meantime, he made his own offer on a piece of property and moved away from St. George. Then, as fate would have it, the offer on his Dixie home did, indeed, fall through.
When it came time to collect on ERA's guarantee, it came to Houston's attention that ERA was no longer bound by the terms of the contract to purchase his client's house, because his client had accepted an offer from a prospective buyer. ERA could have restarted the Seller Security program and re-listed the house for another six months, Houston said, but that just wasn't a viable option for this particular seller. So Houston decided to take the matter into his own hands.
“The seller had moved to Texas, had already committed on another property there and was working with an ERA agent in Texas,” Houston said. “When that agent heard what I was doing, he called me and said, 'I've never met you, but I had to call you, because no one ever does that.' I said, 'Well, I gave them my word.'”
Because the home no longer qualified for the ERA guarantee, Houston made a guarantee of his own, and taking out a loan himself, he personally bought the client's house.
“I bought their property to make good on my commitments, on behalf of the company and myself,” he said. “It's the right thing to do, and that's the way we do business.”
Houston now owns the home, which is located just off Valley View Drive in St. George, and has been making out-of-pocket payments on the property for several months while waiting for it to sell. Consequently, he won't make a profit on it in the end, and he will have actually lost money on the deal when all is said and done, but he said it's all right. The important thing, he said, is that he was true to his word.
“You do what you're supposed to do,” he said. “Nobody does that – they'd have just told them, 'Well too bad, you're out of luck; that's in the paperwork you signed.”
But ERA and Houston don't do business that way.
ERA Brokers Consolidated has never purchased a home under the Seller Security Plan before, he said, and this time was a fluke due to a misunderstanding.
Even with a sluggish housing market, ERA makes only between five and 20 home purchases each year nationwide, Houston said.
“We're confident enough that we'll sell your house that we can say, 'We'll buy it,'” he said. “If they adhere to our marketing plan and follow that, we will sell their house, and we believe that, and ERA believes it, so they've even said, 'We'll put our corporate dollars behind it.'”
As with any real estate program, the Seller Security Plan has some conditions attached. Homeowners are responsible to pay for the initial appraisal on their homes but can select their own appraiser from an approved ERA list, Houston said. Because the homes are being priced to sell within six months, appraisals will tend to favor a more conservative price for a quicker sale. After appraisal, owners agree to price their homes within 5 percent of the appraised price, and they agree to accept any purchase offer made that is higher than the guaranteed ERA price of 90 percent.
In the rare event that ERA does buy a client's home after six months, the company will never keep a profit when the house is sold, Houston said. If ERA buys a house for $200,000, for example, and later sells it for $210,000, that additional $10,000 will be returned to the client after selling costs.
“We will never hold the profit,” Houston said. “We will guarantee any profits will come back to you.”
The Seller Security Plan may not be the right choice for every homeowner looking to sell, he said, but for many it's just the ticket to a guaranteed sale and some peace of mind in the home-selling process. It's also ideal for anyone who needs to move quickly, due to a job relocation or other circumstances, he said.
“It's one of the tools in the bag, and we've got to find which one works for which party,” he said.
Meanwhile, Houston is still paying for his good deed in the Seller Security Plan, and his purchased home is still looking for an owner.
“I still have the house – I'd love to sell it. Call me today!” he said with a laugh.
ERA Brokers Consolidated is located at 201 E. St. George Blvd. To contact them, call 628-1606 or visit www.erabrokers.net.

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