Working With Realtors to Invest in Real Estate and Lease Options

Lease options, also known as rent-to-owns, lease with option to buy, or rent with option to buy, are a way to buy and sell homes without an immediate conventional mortgage. It gives home buyers who can't qualify for a mortgage right now the opportunity to get into a home right away while they improve their credit and build up a down payment while living in the home. It gives home sellers the ability to beat their competition, which we know in these kinds of markets competition is great. Sellers can reach a far greater pool of potential buyers. They will likely be able to sell their home quicker and for a better price. For some sellers it may be the ONLY way they can sell their home in this real estate market.

Many investors think that real estate agents don't have the best deals, or they have all been picked over by the time they actually hit the market. I believe that some of the sweetest deals are sitting on the market. We automatically think that Realtors, or their clients, will snatch up the best deals before they hit the market. It is true that some of the best deals do get snatched up before they hit the market, but-there are many other deals left behind that no one sees. The reason that no one sees them is because they are looking for traditional' or what I call "retail" homes, not lease option or rent-to-own homes. These are two very different markets. The retail market is what 90 % of the people and investors understand. The Lease Option or rent-to-own market takes up a portion of the remaining 10% of the market.


I look to work with Realtors that understand the concept of lease options and can help their sellers understand lease options or rent-to-owns. This understanding can take time. Your job is to assist Realtors to understand lease options. I do this by using several techniques. First, I have a letter that I send to a listing agent explaining the concept, second, I have a presentation that I do for my local real estate offices, and third I network and continually tell Realtors what I do. I hear investors tell me all the time that Realtors just don't understand or want to understand what they do. I can only say that patience and persistence pays off. Realtors aren't trained in unique selling techniques; they are trained in the "Retail Market"' which is 90 % of what is out there. As investors, it is our job to continue to help those around us understand what we do so they know when to call us.


The type of home I am looking for through a Realtor is one that the seller:


Doesn't need their equity out

Doesn't have any equity in their home

I prefer the first one as they are a safer seller for me and they
usually have a lower mortgage payment, if at all.


When a Realtor hears a seller say, "If my home doesn't sell soon I might have to RENT it!," then the Realtor should think of you (assuming you have continued to remind them of what you do). All you need is 2-4 good listing Realtors. Listing Realtors work directly with the sellers and know which sellers are in trouble, which ones can rent, and which homes are vacant. Once a Realtor knows what you do and has a seller that can accept your terms-wow! You are the proud new owner of a lease option.


One of the most important things for anyone is that they get paid for what they do. Realtors are just like everyone else in this regard. When I am taking on an option, I am asking the seller to wait 2-3 years to get cashed out. I don't want to make the Realtor wait that long. If I do, they won't even tell the seller about what I can offer. Why should they? It might not do them any good. They are doing all the work now to get the deal done and want to get paid for it. So I give them the listing agent portion of the commission up front in a seller's market. This is my option fee and is applied to the purchase price when I get my mortgage or when I sell the home. The agent is therefore paid on what they do just as if they sold the home conventionally to another
buyer. When you sell the home you will be asking for 3-5% down from your tenant/buyer (in a seller's market), therefore, you are still minimal or zero down/out-of-pocket. If you aren't a licensed agent/broker and entitled to ½ of the commission, then let the "Realtor Double-Dip." They can get the listing agent portion down upfront from you and the selling agent portion when the home closes in 2-3 years. They will wait for the second half of the first half is paid up front. The second half would just be a bonus that most agents wouldn't expect anyway.


NOTE: If you are in a buyer's market use 1% down for the agent to start
the option. The tenant buyers in a buyer's market will only have 1-2%
down as well. Therefore, in either market, a buyers or sellers, the
amount you are giving to the Realtor will align with what you are
receiving from the tenant buyer. In either market, however, the amount
you are giving to the Realtor will be credited off of your purchase
price when you close on the property.


When you start to work with Realtors and they start to bring you their
listings you will have more deals than you will know what to do with.
Realtors will be "Begging you to Buy Their Listings."


Wendy Patton is one of the nation's leading experts in lease option or
rent-to-own real estate.  She has trained thousands of real estate agents, real estate investors, home sellers and home buyers in doing lease options or rent-to-owns.

You can get lease option or rent-to-own training on my site as a real estate investor, a real estate agent, a home seller or a home buyer.

Visit www.wendypatton.com to get started now!

Remember, the best way to get started is by taking the first step. Visit my website to get started with your real estate investor training on lease options or rent-to-owns.

When it comes to real estate investing doing lease options or
rent-to-owns, I consider having your real estate license to be one of
the single greatest tools you can have in your toolbox. Some of the key
advantages to having your license are:

1. Training in real estate law and on-going training in
   changes to the laws


2. MLS access to find deals and get comps


3. You get to keep part of the commission on purchases or
   sales as part of your profit


4. Wires you into the Realtor network making it even easier to
   get them to bring you potential Lease-Option deals


5. gives you credibility with your clients

As a lease option or rent-to-own investor you'll find that being a real
estate agent greatly increasses you chances and your credibility with
other agents when it comes to finding deals. To learn more about the
benefits of getting your real estate license, read this article on my website.

Real estate markets across the  world are suffering
right now. Sellers can't sell their homes and buyers can't get
mortgages. Real estate agents are having a lot harder time earning a
living now. Home buyers, home sellers and the real estate agents that
represent them need to get creative and look for alternative solutions
than just conventional sales.

What is a Lease
Option or Rent-to-Own?      

Lease options, also known as rent-to-owns, lease with option to buy, or
rent with option to buy, are a way to buy and sell homes without an
immediate conventional mortgage.  It gives home buyers who
can't qualify for a mortgage right now the opportunity to get into a
home right away while they improve their credit and build up a down
payment while living in the home.  It gives home sellers the
ability to beat their competition, which we know in these kinds of
markets competition is great.  Sellers can reach a far greater
pool of potential buyers.  They will likely be able to sell
their home quicker and for a better price. For some sellers it may be
the ONLY way they can sell their home in this real estate market.

How Does a Lease Option or Rent-to-Own Work?

A lease option works like this:  The buyer and
seller agree to an option which gives the buyer the right to purchase
the home during a set period of time. During this option
period the buyer leases the home from the seller.  By the end
of the option the buyer must either purchase the home or forfeit their
option fee.  While the option is valid the seller may not sell
their home to anyone else.

Advantages for the Seller

Here are some of the advantages home sellers when
selling on a lease option:

1. Allows them to beat their competition. (Real esate agents,
ask yourself how many listings have you lost because the home sat on
the market and never sold?)

2. The seller can collect rent on their home while it would otherwise
sit vacant.

3. They can often receive a higher purchase price.

4. They can sell their home in a down market when they otherwise might
not have been able to sell at all.

Allows the seller to actually sell their home instead of just renting
it.  (Real estate agents, have you lost any full commissions
because the home was just rented instead of sold?)

 

Advantages for the Buyer

Here are some of the advantages to your buyers when
buying on a lease option:

1. The buyer can get into a home now, even if they can't
currently qualify for a mortgage.  (Real estate agents, how
many potential buyers have you turned away because they couldn't
qualify for a mortgage?  No longer!)

2. They can improve their credit and build up a down payment while they
are already living in their future home.

3. They are not obligated to purchase the home at the end of
the option if they decide the home is not for them, that homeownership
is not for them or if the real estate market changes significantly.

Wendy Patton is one of the nation's leading experts in lease
option or rent-to-own real estate. She has trained thousands of real estate agents, real estate investors, home sellers and home buyers in doing lease options
or rent-to-owns.