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Realtors - Lease Option Agreements?
What's your standard requirement for a down payment on a lease option? Do you collect commission up front on top of Owner's requested deposit, or wait until the end of lease period, and why? With my office we actually use the term "fee" instead of downpayment or deposit, to avoid the possibility of having to refund/pay it back to the potential buyer & tying things up in a court of law. It seems that alot of sellers, more so in the bay area do ask for 5-6% of the asking. We as Realtors can only suggest, but as you both have stated, it is the buyer's decision as to how much. Appreciate all your input :)
Public Comments
- The down payment requirement is up to the owner, not the Realtor. I've seen some owners request as little as $1K and as much as $10K, non-refundable if the deal doesn't close. They usually request first and last months rent too. Depending on the amount of the down payment, you could offer the each of the Realtors involved 1% upfront and the rest to be paid once the property closes. Sometimes it's not up the the actual listing agent, but their broker to decide how they are to word the contract as far as compensation goes when it comes to lease purchase agreements. I hope this helped!
- our office standard is that we get part of the commission when the lease purchase starts out of the non refundable down payment, the rest of the commission is paid at closing when the lease purchase is being converted to a conventianal loan or paid off by the purchaser
