Lease Option or Rent-to-Own real estate

 Doing lease option or rent-to-own deals with real estate agents

©2009 by Wendy Patton

Think you can’t find lease option or rent-to-own deals with real estate agents?  I beg to differ.  The latest statistics show that more than 80% of sellers and more than 75% of buyers work with a real estate agent for a home sale.  This means the vast majority of real estate sales occur with the assistance of real estate agents. If you are a real estate investor looking to do lease option or rent-to-own deals - real estate agents are your BEST source for deals.

Not all real estate agents understand lease options or rent-to-owns. In fact, many of them don’t.  But that’s okay.  As an investor you really only need a handful of agents you can work with that will feed you potential lease options.  My advice is to start out by just talking to one agent at a time, that’s all you need to do.  Explain to them how lease options or rent-to-owns will help them move their slow selling listings and how they can double dip (especially if you aren’t an agent yourself).  The economy is tough all the way around and most real estate agents are hurting too.  Once they see dollar signs lighting up in their eyes at how you can help them and their sellers they’ll start to send you potential lease options.

After you’ve met with one agent then meet with another.  Like I said, just one at a time until you’ve got a handful of agents you are working with.  Then they’ll start sending you those potential rent-to-own deals.  Stay in touch with these agents regularly, just a quick email or phone call periodically to remind them how rent-to-owns or lease options can get their commissions up.  The most important thing to do is follow up with them after they send you a lead.  As soon as you don’t call them back on one property you can be sure they won’t be sending you more.

If you follow these few rules you’ll find that your handful of agents is all you need to keep lease option or rent-to-own deals coming your way.  You may not need to do any other deal marketing again!

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:

• Training in real estate law and on-going training in changes to the laws
• MLS access to find deals and get comps
• You get to keep part of the commission on purchases or sales as part of your profit
• Wires you into the Realtor network making it even easier to get them to bring you potential Lease-Option deals
• 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, you can read the article on my website titled becoming a Realtor.

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.