Do you recommend changing your option fee criteria for lease option properties you already own?

In my mind, I look at lease option deals like they’re in two groups.

Group one is where you already own the property. You’re then offering the property to a tenant buyer on a lease option. You’re using it as an exit strategy to rent the property and then ultimately sell it without using a real estate agent.

Group two is where you find a tenant buyer without having a specific property you already own. You’re going to let that tenant buyer pick a property that is for sale in the local MLS. You’ll work out your lease option agreement with the tenant buyer before you own the property. You’ll then buy that property with me as your real estate broker. Once you own it, you then offer that property to the tenant buyer on the terms you agreed to with them.

So, do I recommend changing your option fee criteria for the two groups? Yes, I do.

I recommend you have at least 5% down (and preferably more) if you’re going to buy a property from the MLS for a tenant buyer.

For a property you already own, I still feel you should get the maximum option fee you can. However, if you’ve got a strong tenant buyer in front of you and they don’t have 5%, you should accept them.

Clients wanting to discuss using either of these strategies should contact me to discuss this in more detail.

Lease Option FAQs

Option Fee

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