Selling a home can be a very emotional experience. Buyers and sellers usually have an agenda of what they want to accomplish in the transaction. In order for sellers to come to an agreement with perspective buyers, they have to realize certain benefits that give them reason to sell.

In this article, the discussion will center on the top 10 seller benefits when they sell using a lease with option to purchase contract. These benefits taken together, build a strong case when choosing to use the lease with option to purchase strategy. In today’s market climate where houses can sit unsold for months, sellers want the security of knowing that they put together a good deal, one that will be safe and make their house salable.

Best Seller Benefits

  • Full Market Price, Regardless of Demand: More tenant/buyers will be attracted to the home, which are willing to pay full price, because the seller will be offering special terms with the financing. This will demonstrate to the perspective tenant/buyers value that will be difficult to pass up.
  • Non-Refundable Option Deposit: When tenant/buyers enter into an agreement with sellers, they will put up a good faith option deposit. This is their intention to buy the house. There is some risk involved since the deposit is non-refundable. Sellers feel more secure when tenant/buyers show this good faith act.
  • Positive Cash Flow: Rents are usually set above any debt service on the property. With higher than market rent in place, the seller will enjoy a positive cash flow. This will help with any unforeseen expenses the seller may be responsible for during the term of the lease.
  • Above Market Rent: Sellers who offer exclusive financing terms and outstanding value can expect and usually receive rent that is above the market, from 5-10%.
  • Better Quality Tenants, Reduced Risk: The occupants renting the home not only have a vested interest in it, but they are also planning to own it in the future. They will have a homeowners mind set, and take better care of the home.
  • No Maintenance or Minor Repairs Required: The “Pride of Ownership” is a strong motivator for tenant/buyers. With a vested interest in the property along with the homeowners mind set, tenant/buyers will be encouraged to pay the rent on time, perform regular maintenance, and make minor repairs and even improvements and upgrades to the home
  • Thousands in Commissions and Fees are saved: Properties that are sold “Buy Owner” will not be required to pay any Realtor’s commission or fees. Commissions can cost between 6-7% of the sales price.  The seller will also save on advertising expenses, since using the lease with option should generate a faster sale.
  • Little or no Vacancies: Other than the initial advertising period, the tenant/buyer selected should continuing renting until he purchases the house. Even if the initial tenant/buyer does not work out and moves out of the house, finding another one will not take long. The great thing about a lease with option opportunity is there are always more tenant/buyers looking for houses than there are houses available to buy.
  • Available Tax Shelter: With a lease with option to purchase the seller doesn’t transfer the deed, so he remains the legal owner until the option is exercised. This gives him all the benefits of home ownership.
  • Peace of Mind: With the home occupied with quality tenant/buyers who paid an up-front option deposit and who are responsible for maintenance and minor repairs, the seller can enjoy the lease term while he waits for the home to close. All the other benefits mentioned give him the assurance that he has made the best possible deal rather than the anxiety of having his home “sit on the market” an indefinite period of time while he waits for a sale.

Investors will do well to educate perspective sellers with these benefits. Showing what the seller has to gain from the sale is one of the keys to investing success. If you will keep providing the seller with more reasons to say yes, your investing will be fun and profitable.

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