When it comes to lease option coaching FAQ the sellers and end buyers have different concerns. You, as the principle (investor) in the deal not only have your own questions but also need to be able to answer the questions for your sellers and buyers. These FAQ should be of interest to everyone (investors, sellers, and buyers).
Lease Option FAQ for Sellers
Q: Why would I choose to do a lease option instead of outright selling the house for cash?
A: That depends on your circumstances but this definitely offers you (as the seller) more options. First, while the national market is currently a seller’s market, it isn’t that way everywhere. If yours is a slower market, the lease option opens your market to many more potential buyers. Same thing if your market is highly active. Another good reason is some sellers would like to collect a monthly rent for a year or more and still have a highly motivated buyer in the not too distant future. If you would like to discuss your particular circumstances, please contact my staff or myself at wendypatton.com/contact/.
Q: The lease option seems like a complicated process. Where do I start?
A: Start by deciding the terms you want to offer the buyer. Decide how long you want the purchase option to be available. Most common is 18 months to 2 years but it can be longer. Then decide how much to charge for a nonrefundable purchase option fee. Typically, it’s between 1% and 3% of the purchase price. Check your local market to see if a standard exists. You also want to begin considering what maintenance responsibilities you want the tenant to assume that go beyond a traditional lease.
Q: What’s the next step in a lease option?
A: As the seller, you have several options to consider. Even before you have a buyer interested in the lease option, you should create a draft of the purchase option agreement. You want a win-win agreement, which means the buyer will have some say in the final contract. However, a draft will go a long way towards helping the buyer understand how the process works. I always recommend that you have a real estate attorney knowledgeable in lease options review your contracts. This is particularly important with your first several deals and after any change in regulations.
For investors, I encourage you to take full advantage of these additional lease option coaching FAQ and personal lease option coaching as well as the additional resources I’ve included at the end of this article.
Lease Option FAQ for Buyers
Q: Finding a lease option purchase home seems difficult, where do I start?
A: Finding a lease option purchase starts with a search for available houses. Begin your search by asking a real estate agent to review the MLS. Also, look at your local craigslist and other local periodic publications with a real estate section. You can also find any house for sale to make a lease option purchase offer.
Q: When deciding to accept a lease option purchase agreement, how do I know if I’m getting a fair deal?
A: You should always have a real estate attorney review any contract before signing. Just as importantly, you can counter offer any lease option purchase agreement to include terms that you prefer. The lease option purchase agreement is a very flexible contract that should be written to suit both the buyer and the seller.
Q: What is my biggest risk?
A: Qualifying for a loan to complete the purchase is the biggest difficulty most buyers face with a lease purchase agreement. Carefully consider if it’s reasonably possible for you to fix your credit rating and come up with the down payment within the option time period. If not, ask for more time. Also, a lease option agreement can include a provision to automatically extend the option period if agreed credit improvement is being made. Credit counseling is another option.
These lease option coaching FAQ demonstrate the many possibilities for investors, buyers, and sellers willing to think outside the box. These are only a few of the many possible questions you may have. To learn more, you’ll want to read this other useful information that I offer to you free. Please take advantage of it today.
- Lease Option Forms and Contracts
- Are Lease Options Legal in My State?
- 9 Ways to Improve Your Credit
- Cooperative Lease Options vs Sandwich Lease Options
- Taking Action In the Present Moment
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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