Reading a Guaranteed Sold Agreement

The backstop price is below what the open market would likely pay. You are buying a floor and a date, and the cost is upside. If the house sells normally, the backstop never activates and you paid nothing for it except whatever terms you accepted to have it. If it activates, you are taking a discount, on purpose, because the alternative was uncertainty.

The floor should be a specific dollar figure in the agreement, not a formula applied later and not a percentage of an appraisal that has not happened. If it is tied to a valuation, read who orders that valuation, who pays for it, and what happens if you disagree with it.

Check whether the floor can be revised. Some agreements allow adjustment after inspection or after a set number of days on market. An adjustable floor is not a floor.

• Price and marketing compliance: the guarantee usually requires you to list at a price the program approves, and to accept specified reductions on schedule. Declining one can void the backstop.
• Access and showings: minimum availability requirements, lockbox terms, and occupancy conditions.
• Condition and repairs: required items completed before the guarantee is live, and what happens if inspection finds something material.
• Timing: the exact window in which you can exercise, and how many days you have to respond once it opens.
• Title: liens, unpermitted work, and boundary problems typically suspend the guarantee until they are cleared.

Understand what you pay in each outcome: a normal sale, a backstop purchase, and cancellation. Some programs charge a program fee on top of commission, and some price the backstop with the commission still deducted. Ask for the net-to-you figure under each scenario in writing, not the gross.

Have a real estate attorney read it. CloseCenter is a referral service and does not provide legal advice. Our specific backstop terms are still being finalized, and we would rather tell you that than publish a number we might have to change.