LEASE OPTION SELLER CHECKLIST PLEASE CONSIDER THIS OPTION GREAT WAY TO SELL A HOME WIN WIN ALL AROUND

By
Real Estate Agent with Precision Real Estate Inc. SA535849000

LEASE OPTION SELLER CHECKLIST PLEASE CONSIDER THIS OPTION GREAT WAY TO SELL A HOME WIN WIN ALL AROUND

ARIZONA LEASE OPTION CHECKLIST

Many real estate agents stay away from lease options simply because they do not understand the mechanics of this transaction. The lease option tool is a great way to sell another home. However, one must be well trained to ensure the lease option is done correctly. This way we avoid mistakes when buyer exercises their option to purchase home.

Now, I always advise my investors to treat people the way they want people to treat them. Respect and honor goes a long way with people. What if the seller would send the lease option candidate a $100 gift certificate from Wal-Mart in a thank you note? I believe this act of kindness will go a long way.

I have developed checklist home owners searching for the lease option way to sell their home during this market crunch.

 

Seller Beware Checklist

 

  • Seller will need to conduct full background check on potential lease option candidate including employment check and three reference checks with name and number
  • Insist on using your contract with detailed real estate language
  • Set the price where lease option candidate will be able to purchase the house in 24-36 months. It must be a Win-Win for both seller and lease option candidate
  • Treat lease option candidate as a homeowner. For example-his monthly payment will be referred as a mortgage payment to have home ownership in his/her mind.
  • Seller still responsible for his/her mortgage payment, taxes and insurance along with HOA CC&Rs
  • Set up quarterly inspections by third party person to inspect interior and exterior along with changing AC filter and other minor maintenance up keeps to avoid any major damages to the house
  • Lease option candidate is responsible for all repairs of the house
  • Purchase home warranty on the property for extra protection. Lease option candidate will be responsible for copay-around $45-55 per visit
  • Ensure you use both a residential lease and purchase contract along with a document bringing all documents together for extra protection
  • Retain the services of a real estate lawyer or property management company in case one needs to evict a tenant
  • Require the lease option candidate to participate in a credit consulting program
  • Record all documents at title
  • Be prepared to modify the terms of the contract if market conditions change in the near future
  • Give up to 25% of the monthly payment towards the purchase of the house for incentive to make payments on time

 

Conclusion:

 

This is just another tool for a Realtor to assist people in need. Homes listed on the MLS consist of 50% or more of bank owned properties. Sellers are competing against the bank. I would advise sellers that it is not the best time to sell their home. I recommend they rent or lease option their house for the next two years until the market goes back up.

Posted by

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Re-Blogged 1 time:

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  1. Kamal Salim 04/27/2012 09:35 PM
Location:
Arizona
Groups:
Property Management
Tags:
phoenix real estate
lease option

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Rainmaker
996,038
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Harry:  Although the title to this post mentions doing a "lease option"... many of the items on the checklist could also apply to a "lease-purchase."  The two have similarities, but they are also very different.

Some of the items on the list DO make more sense in a lease-purchase... but I suppose if you can get the renter who has the option to purchase to go along with them... so much the better for the seller.

Also... many states do NOT allow Realtors to participate in lease-options or lease-purchases.  In many of these states, only an attorney can provide this service.  In Texas, for example, we are not permitted to do lease purchases.  Each agent should check with their own state to see if they can legally use this method.

April 27, 2012 09:49 PM #1
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Bob Crane
Woodland Management Service - Stevens Point, WI
Forestland Experts! 715-204-9663

Hi Harry, great information, I can see this as being an option for a fsbo, but for an agent to get involved in this how would the commission come out of this, or would it be delayed until later? if and when the transaction becomes a sale.

April 27, 2012 10:34 PM #2
Rainmaker
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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Being on the mortgage side, I have seen so many of these agreements screwed up. The information you shared is all very important, but it may be important to consult a mortgage professional to make sure that all the pieces in the agreement are allowed and to make sure the prospective buyer is qualified, as part of the mortgage process.

Thank you for sharing the post with all os us.

April 28, 2012 03:17 AM #3
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Harry F. D'Elia
Precision Real Estate Inc. - Phoenix, AZ
Investor , Mentor, CSSN, Radio Coach, REOs, ABR

All excellent points-consulting with a lawyer, mortgage professional and tax specialist all great things to do for both sides of the transaction.

April 28, 2012 04:59 AM #4
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Harry F. D'Elia

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