What Do You Do If The Seller Wants The Lease Option Fee?

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"What do you do if the seller wants some or all of the lease option fee? How do you keep the seller from competing with you by marketing to rent or sell the property?" -- Kevin

Joe: Let's start with the second one first -- 'How do you keep the seller from competing with you?' -- You just write it into the contract. We actually set it up in the lease option memo to where it says that they can go ahead and sell it themselves since most of them won't do that.

Joe: If you find that you're getting beaten up by people who are getting their properties rented before you can find a lease option buyer, which is possible, because sometimes it's easier to find a renter than it is to find a lease option buyer because they don't need as much money to buy the property, and so if you're getting beaten out on deals like that, then you just write in, 'The first 30 days I ask that you not do any marketing and let me handle it'. If you learn how to get that compliance, then it won't be a problem for you ever again.

Joe: I have a student who just recently went through that same situation. He lost two or three deals right in a row because they went out and rented it out from under him. From then on, I said, 'Look, just tell them they can't rent it until you get your 30 days.' He does his 30 days now and he gets his properties sold and doesn't have that problem anymore.

Joe: The other question here is, 'What do you do if the seller wants some or all of the lease option fee?' That is a question you will get all the time. They always want a deposit, they want some of the lease option fee, and they say, 'Oh, we'll do it, but we want $10,000 down.' People want more -- there's no question about it -- no matter who you buy from, they want more money.

Joe: The question then becomes: what are their options? Do they have options? If they want $10,000 for the down payment, do they have that option? Can they get $10,000? -- Probably not. And they're not going to be able to get it without you, which is what they'd have to do.

Joe: If you give them $10,000, you're not going to have any left for yourself. You're probably are not going to make $10,000 on a $150,000 property when you sell it on a lease option. You may make $5,000. So if you make $5,000, obviously you can't give them $10,000 because the buyer won't have enough money to make that happen.

Joe: So what is possible? What is possible for you and what is possible for them? It's unlikely that they're going to get it, and even if they try to sell it, for them to get the $5,000 is also unlikely because they don't understand how to sell it.

Joe: You're working in this business and it's your business. It's what you do for a living -- finding buyers for properties like this. So the chances that you're going to be able to accomplish it with the marketing techniques I'm teaching you and with the abilities that you have that you're learning through this process, and the fact that you're building a database of buyers -- with all of that taken together, you're going to be able to sell it much quicker than they will.

Joe: You just have to show them what their options are. They could go to a realtor, they could sell it for under market value, they could go into foreclosure; they have just a few options that they can take. Joe: Joe: What you need to do is present them with their options AFTER you understand what they need and what their situation is. Everybody's going to be in a little bit different situation, so you need to analyze their situation and say, 'Based on what you've told me, here are the options.'

Joe: By the way, in the Automarketer, in the lead sheet on each of these leads that come in, there's a little button that says 'seller options'. If you click on that button, it'll open up a list of all the seller options that are the most common ones. Then, you can read through them, and you can read through them with them right there on the phone and say, 'You could sell it with an agent. Here's what happens if you sell with an agent,' and help them understand how it works with an agent, or how it....

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