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