Selling Real Estate on Lease Options
Whether you’re an investor or a homeowner, when it comes time to sell, you should always take a close look at selling real estate on lease options. What makes selling real estate on lease options a powerful technique is that it enables you to tap into a huge pool of people wanting to buy a home but for one reason or another, aren’t quite able to make the purchase right now.
Most sellers give little thought to selling lease options on real estate until a buyer approaches them with the idea. If you’ve already made the decision that this is the way you want to go, you can take advantage of my free training and expertise on the subject by visiting https://wendypatton.com/articles/ or take advantage of the more formal training I offer at https://wendypatton.com/products/.
Selling Real Estate on Lease Options Process
Once you’ve made the decision and understand the process, finding a huge number of prospective buyers is no more difficult than running a well-written advertisement on craigslist or in the real estate classifieds of your local newspaper.
Once you have a list of potential buyers, the next step to selling real estate on lease options is performing background checks. You should first whittle down the pool by checking references and keeping those with a steady source of income on the short list.
Selling Real Estate on Lease Options – The Short List
From the short list, you need to look at their credit history. Regarding the credit history, you need to show some leniency but you don’t want to go with someone that shows a long history of not paying his or her bills. When selling real estate on lease options, your best alternative is going with someone that had a one time bad event on their credit report but otherwise has a history of paying on time and is back on track. These are the people that will soon qualify for a mortgage and will be able to complete the purchase.
Now that the Great Recession is well behind us, the types of buyers you should be looking at are those that had a period of unemployment, those that were foreclosed on, and those that went through a short sale. Of course, there will be others that you want to consider on a case-by-case basis.
When selling real estate on lease options, one-step that many sellers over look is having the buyer talk with a mortgage loan officer. The buyer isn’t likely to be preapproved for a loan but they can discuss what needs to be done to obtain a mortgage in the not too distant future. This gives both you and the buyer a real perspective if the sale can be finalized within the agreed amount of time in the lease option agreement.
Little Know Tip to Selling Real Estate on Lease Options
Before signing the final paperwork, it’s a good idea for you to provide the buyer with a disclosure statement. The disclosure statement tells the buyer about any deficiencies with the house that you are aware of. Almost every state requires full disclosure for every real estate sale. Although you are selling real estate on lease options, you should treat this as an outright sale from the beginning. Otherwise, there is a chance the buyer could back out later when you do have to give them the disclosure statement. Additionally, that could provide the buyer with the ability to demand return of the nonrefundable option fee.
It’s also not a bad idea for the buyer to have a professional inspection of the house done at this time.
Finally, you want to sell the house. You don’t want to become a landlord. Make sure the contract clearly spells out who is responsible for repairs and maintenance of the house. Everything, except the most serious repairs, should be the responsibility of the buyer just as it would be if the purchase had already been completed. That way, you won’t be getting telephone calls about backed up toilets early on a Sunday morning when you’re trying to catch up on your sleep.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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