A new program by ERA promises homeowners the firm will sell their home or ERA will buy it. Company representatives say the program allows homeowners to buy a new home before they’ve sold their old one.

Matt Fischer ERA in Yuma started offering the Sellers Security Plan in August. The program guarantees that if a qualified seller’s listed property doesn’t sell within six months, ERA will buy it for a pre-agreed amount.

“In a worst-case scenario, if the home doesn’t sell on the market, at least the homeowner knows that there will be a buyer. The homeowner knows that upfront,” ERA broker Michael Hall said.

It’s also a sign of ERA’s confidence that the real estate market is rebounding, he noted. “It shows our confidence in the market regardless of all the economic downturn.”

Hall said he is seeing indicators that the market is stabilizing.

“We’re seeing lots of investors returning. They’re renting out for more than they’re paying the mortgage. Some have seen a 30 percent return.”

The reason Matt Fischer is implementing the program at this time is that “we’re seeing inventory levels getting back to healthy levels,” Hall explained.

The program is especially beneficial to homeowners who are relocating for work or moving to a new home in a new development, a retirement community or an assisted living facility, according to ERA.

“It has big benefits. Homeowners can buy another house without it being contingent. They don’t have to sell their home before buying another,” Hall said.

In addition to the contract to sell the home to ERA, the seller’s home is on the market and if they receive another offer, they can accept it. This is actually the preferred scenario.

“We haven’t purchased anything yet and the plan is not to do it. We hope they can sell it. It’s all about getting the listing to sell,” Hall said.

“Realistically, do we want to buy houses? No. It’s only to give security to homeowners.”

He said the program “gives qualified homeowners accepted into the plan the assurance that it will sell. If it doesn’t sell by the specified date, ERA will buy it.”

ERA Franchise Systems LLC would be the entity buying the home, not the local agent or real estate company.

The purchase price will be determined solely by ERA, based upon a discount of between 80 and 90 percent of the home’s appraised value.

“The homeowner will know in the first 30 days exactly what the value will be. If they don’t like it, they can cancel the listing,” Hall said.

This helps homeowners know in advance the minimum they can expect from the sale of their homes. They’ll also have time to see if other buyers are willing to pay more.

If ERA ends up purchasing the home and then resells it for more than ERA paid, the net profits are returned to the homeowner. But if ERA sells it for less, the homeowner won’t take the loss — ERA will.

To skeptical homeowners, Hall said, “This is no smoke and mirrors. Absolutely, it’s a real program.”

He said the reaction has been mostly positive. “Some people think it’s a marketing gimmick. That’s the only negative feedback we’ve gotten.”

His hope is that the program will stimulate the housing market. “It will open the market in so many ways. We have high expectations.”

To qualify for the program, sellers must have at least 20 percent equity in the home or the necessary funds for closing with ERA.

“They’re disqualified if the home is underwater (when the loan amount is greater than the home’s value). In that case, sellers will be referred to the Short Sale Department,” Hall said.

Homeowners must also be current on all mortgages. They will also be responsible for mortgage payments and maintenance until closing.

The home’s value cannot be in the Top 20 percent of the local market. Accordingly, a seller must also agree to purchase a home inspection and appraisal.

The homeowner also agrees to reduce the list price at certain intervals during the selling period.

In addition, the house must be a single-family primary residence. Townhomes and condominiums qualify, but mobile homes, co-ops or multi-family homes do not.

The property can be vacant when applying for the program but cannot be rented during the listing period.

A seller must agree to market the home through ERA and purchase their next home through ERA, although it doesn’t have to be the same agent.

If a seller does not plan to buy another home, they do not qualify for the plan with the exception of military personnel moving into base housing, those purchasing new construction as the result of a referral to agent from the builder and those moving into a senior living facility as a result of a referral to agent from the facility.

Hall said sellers must work with a trained agent. “We have 60 agents, but not all are qualified to work with the program.”

Potential sellers may contact ERA Matt Fischer at 344-2550 to find out more about the program.

Mara Knaub can be reached at mknaub@yumasun.com or 539-6856.