Help...Commission Payment on Lease to Purchase...AR Please Come to Our Rescue

By
Real Estate Agent with Dockside Realty

If any of you have had or know any agents that have received full or partial payment of a commission on a Lease to Purchase prior to the actual transfer of title please let me know.

Lease to Purchase Agreements are becoming more and more prevalent in some markets.  We are seeing them even at Lake Anna. 

A seller I am working with is considering one right now and I am trying to figure out if there is any legal way we can include at least a partial commission in the terms.

Last August one of my listings had a Lease to Purchase Agreement accepted by my seller.  At that time we had the house listed for sale and also as a Lease to Purchase.  I received a payment equal to one month's rent on that transaction at the time the lease began.  I am still confident this house will be going to settlement, August 2009, and our brokerage will receive the commission at that time.  However, we have no guarantee.

The waterfront home I have listed now is in the MLS as a sale only priced at $698,000.  We had a client from another company go to the seller's home days ago and propose a Lease to Purchase.  At this point we are all trying to work out possible terms.   (We are also trying hard to not offend the possible purchaser by asking him to work through the agents.)

My concern is the delay in the commission payment.  Purchaser/Lessee would like a 2-3 year lease.  I discouraged my client on the three year lease because of how it would affect her ownership of the house.  If it did not settlement prior to three years of a lease she would have capital gains reprecussions as she will not have lived in the house for two out of the last five.

I understand the need to consider the sellers needs above my own and that is fine.  However, I am wondering if there is a legitimate way we (the two brokers) can receive some compensation for all the work we have to do in order to make this happen.

What happened to time is of the essence (for the REALTORS®)?

The seller will be receiving an upfront payment plus monthly payments.  The purchaser will be receiving the use of the house.  And the agents??????????????????????????? 

Are any of you experiencing this situation?  How are you handling it? 

If any of you have any knowledge of how this can be done or suggetions I would appreciate it very much.

I would like to thank ActiveRain and my fellow Rainers in advance.

_________________________________________________________________________________________

welcome

 

If you or someone you know is thinking of buying or selling property at or near Lake Anna, Virginia please contact Kathleen "Kate" Elim.  Kate lives at Lake Anna, knows Lake Anna, loves Lake Anna, and specializes in Lake Anna area real estate. 

Call Kate at 540-226-1964 or by e-mail at lakeanna.kate@gmail.com. Be sure to check Kate's Web sites  and blog at http://lakeannaandbeyond.com/ or http://lakeannacountry.com/

 

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Groups:
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ETHICS and the REALTOR
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Tags:
lease to purchase
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buyers
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Ambassador
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Jim Crawford
Jim Crawford Atlanta Realtor - Atlanta Real Estate
RE/MAX Paramount Properties

I have never paid a lot of attention to these things, because so few ever really close.  I understand it is important to get something on the front side.

June 30, 2008 07:48 AM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Kathleen:  I read all of the comments, and the two I like best are the second one by Sylvie Conde, and the comment by Deb at Brooks Prime Properties.

I agree that you cannot collect a full sale commission up front, because the home has not sold yet.  One month up front would be what I would do on the lease part.  My only other suggestion would be to keep it at a two year lease.  Although the sale/lease purchase contract has taken place during the period the listing was in effect,

I am wondering if maybe you need to either extend the listing period per contract to expire six months after the end of the second year of the lease.  That way the seller and buyer would be more inclined to consider you as part of the transaction when it happens way down the road... rather than hoping you would just disappear.  I would ask your broker about this, because it is an idea I just thought of, and am not sure of the legality.  Best of luck...

July 01, 2008 01:12 AM
Rainer
1,803
Jessica Cordell
Century 21 Hendershot Realty

Thanks for the great information . I have'nt worked with a lease purchase sell as of now and hopefully with the new information, I will know a little more about the details if I have the chance to to work on one. Thanks Again, Jessica Cordell

July 02, 2008 10:36 AM
Rainer
11,722
Brad Clement
Brad Clement
RealtySouth

Kate,

We use a Lease-Purchase Addendum to the Sales Contract which spells out the terms of the lease.  You can negotiate with the seller to pay a portion of the commission upfront.  I'd be glad to send you a copy of the agreement. 

February 16, 2009 03:39 PM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Kate:  Watch out for the comment above me.  It is a spam comment.  I have seen perhaps ten of them tonight.  Also... I suggest you NOT click on the link... since it is spam... and may lead to some virus or trojan horse.  I suggest you DELETE the above comment.  Take care...

July 17, 2009 08:38 AM
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Kate Elim

Realtor 540-226-1964, Selling Homes & Land at LA
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Additional Information

Kathleen "Kate" Elim
Dockside Realty
4634 Courthouse Road
Mineral , VA , 23117 United States
540-226-1964

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