We’ve been involved in several transactions this year where we’ve used a “Lease Option”. These transactions require a lot of research and salesmanship.
Many transactions require tons of research and due diligence prior to showing a property. Targeting homes which have been on the market 7 months or longer is one way to locate homes where the “Owners” maybe open to a different approach.
The hard part is convincing the agents to present the offer. Many agents are afraid to present an offer in which they themselves don’t understand. In some cases their Brokers won’t encourage them to be “Pro-Active” to this type of close either.
Here are guidelines we’ve used when looking at “Potential Homes as a Lease Option”.
1- Targeting a potential “Lease Option” isn’t very difficult. Just because a home is listed on the MLS as “For Sale” doesn’t mean the sellers aren’t adverse to entertaining other options.
2- Homes that have been listed for 7 months or longer would be the most logical place to begin. Look at the history of the home, in some cases it’s been listed by 1 or 2 different agents. Prior to writing any offer make sure to inform the Listing Agent exactly why you’re looking at this particular home. Ask them to speak with the seller about a potential “Lease Option”.It helps when the agent knows the circumstances. If they require an explanation it’s a good bet, they’re not familiar with this concept.
3- Search for vacant homes. I cant tell you how many homes have remained on the market for a very long time that are vacant. The owners in may cases are drained with additional mortgage payments. When speaking to the Listing Agent ask them if the owner is now inconvenienced with two mortgages.
4- Insist on “Presenting the offer” to the seller or at least speak to them on the telephone. Many times agents are afraid to present an offer they themselves don’t understand. Faced with this dilemma many agents would rather shy away from presenting because their out of their element.
5- Have the lender or Mortgage Broker contact the agent as well. A good Mortgage Broker is worth their weight in Gold! Having them speak to the homeowner or agent places them at ease.
6- Get inspections and appraisals out of the way within the first 90 days. Try to close within 6 months rather than longer. In our opinion the longer you wait isn’t advantageous to the Buyer. Appraisal issues, personal issues do change.
Real Estate isn’t in “Black or White” there are many ways to close a transaction. Keep an “Open Mind” the next time you’re faced with a different type of transaction.