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Lease Purchase and the Real Estate Agent

Don't Avoid an Option for Your Customers That Can Pay You Well


How many of us work with clients over long periods of time, sometimes years, before they sell or buy a home with our services? How long do we "farm" an area with expensive mailers and with email, newsletters and more before we get a warm prospect? We could be creating future business in an easier way, and getting paid for it as well.

Say the words "lease purchase" to many real estate professionals, and you'll see an immediate drop in their enthusiasm level. What they hear is "no commission now." That is mostly true, but there are some very good reasons for a real estate agent to help their buyers and sellers with a lease purchase if it meets their needs.

  • The up-front non-refundable option payment to the owner/seller can be shared with the real estate agent. You get paid to set it up.
  • You lock in a commission on the sale if the tenant exercises the option to purchase.
  • You build credibility and loyalty with the seller, as you are helping them to potentially move a problem property.
  • Sellers strapped for cash can move in a paying tenant without dumping the property or losing it to foreclosure. Again, you build loyalty with the owner.
  • Your cash-poor buyers can stop looking and negotiate a future purchase on a home they love, living in it while they build down payment dollars.
  • Buyers with credit problems can lock in their home of choice while they repair their credit.
  • If you work with investors, the lease purchase can be one tool in their box for better return on investment.

Obviously, if a home is listed with another agent, you may not be able to negotiate a lease purchase for your buyer, but it could be worth a try. Your buyer will appreciate the effort. On the listing side, you may want to discuss this option at the beginning. Your seller may not be too interested then, but they will remember the discussion months later when the property hasn't sold. In buyer markets, offering a property with "lease purchase possible" can bring an offer when nothing else does.

Think of it as an investment of your own. Now, you're not spending money to market for a prospect, and maybe someday a customer. You're getting paid a little up front to lock in a commission on the other end if a purchase results.

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