Facing reality means finding alternative ways of selling a house when traditional ways no longer work. By answering the question: What is a Lease Option?, you'll find one of the surest ways to sell in today's market.

Real estate markets across the country are suffering right now. Sellers can't sell and buyers can't get mortgages. Real estate agents are finding it difficult earning a living. Gone are the days of expecting it to sell with minimal effort. It's time to get creative by learning what is a lease option!

What is a Lease Option?
Lease options are a way to buy and sell homes without an immediate conventional mortgage. It puts buyers who can't qualify for a mortgage right now into a home right away while they improve their credit and build up a down payment. It gives sellers the ability to beat their competition, which there is a whole lot of these days. Sellers will reach a much larger pool of potential buyers. They can expect to sell their home quicker and for a better price. For many sellers it's the ONLY way they will sell their home in this market.

The challenge for Realtors, buyers, and sellers alike is having an education about what is a lease option.

A lease option works like this: The buyer and seller agree to an option that giving buyers the right to purchase within a set period of time. During this option period, the buyer leases the home. By the end of the option, the buyer either purchases the home or forfeits their option fee. While the option is valid, the seller cannot sell to anyone else. In a nutshell, that answers what is a lease option.

Advantages for Sellers When They Understand What is a Lease Option?

This is what sellers need to understand when the question of what is a lease option is addressed.

1. Allows them to beat their competition.
2. Sellers collect rent while the house would otherwise sit vacant.
3. They will most likely receive a higher purchase price.
4. The can sell their home in a down market when few traditional sellers are able to.
5. Allows the seller to actually sell their home instead of just renting it.

Advantages for Agents When They Understand What is a Lease Option?
This is what agents need to understand when the question of what is a lease option is addressed.

Selling on a lease option isn't as ideal as a conventional sale where you get your entire commission up front but it's a whole lot better than:

1. Turning away potential buyers who can't currently qualify for a mortgage and you can't explain what is a lease option.
2. Having your seller rent their home because it won't sell and you only get a tiny rental commission. Knowing what is a lease option changes the game.
3. Losing a listing because the seller blames you for their home not selling.

Once you know what is a lease option, you still receive your full commission - part of it upfront out of the tenant-buyer's option fee and the remainder when they purchase the home.

Obviously selling on a lease option is not the first choice for sellers or agents. Whenever possible we want to sell to conventional buyers. However, when that isn't working this is a great alternative.

For more information about what is a lease option, check out my book, Rent-to-Sell, a step by step hands-on guide to selling your home as a rent to own.  To Find out more about finding motivated sellers you can get my free ebook on my facebook page:  Wendy's Page.

Real estate investors would love a real estate option on bank owned properties (REO) because the banks are swimming with them and are selling well below market value. Unfortunately, banks are not allowing our favorite real estate option - the lease option. And I don't expect them to anytime soon.

Some banks are beginning to rent houses until they can sell them. However, they are using property management companies rather than allowing lease options. The reason being is the banks are not staffed to manage property and certainly don't have staff trained to manage lease options that involves dozens of real estate investors. The fact remains a cash purchase is your best real estate option for acquiring REO.

Cash purchase is the best real estate option for REO

Cash Purchase Is Your Best Real Estate Option for REO

This real estate option is a challenge for the beginning investor short on cash. However, depending on your location, many of these properties are selling well below market value and offer a big upside if you can exercise a cash purchase real estate option.

This real estate option is such an opportunity that if don't have cash but can obtain financing or find a partner with cash, I recommend pursuing a cash purchase. Once you own, you can than maximize your cash flow and long term profit by offering a lease option.

You'll maximize your cash flow and profits by offering a lease option because there are so many people wanting to buy but can't obtain financing. When you offer financing assistance as a real estate option to buy, you dramatically increase your potential buyers market to include those willing to pay above market value for the opportunity to own through a lease option.

Another Real Estate Option for Agents

Some agents might want to explore starting a property management side business. If you can contract with a bank or two to rent and liquidate REO, it will be a big boost to your business. A property management contract for REO gives you a major insider advantage to the best REO deals the bank has without needing to make cash purchases.

After you establish a track record with the bank, you could even broach the subject of allowing you exclusive rights to begin offering lease options controlled by your business. Remember, banks aren't going with this real estate option because they don't have staff trained to management and don't want leases options with dozens of investors. Being the single contact for lease options and being the only investor contracting with potential end buyers could open this lucrative opportunity for your business.

What are you seeing in your REO market? Lower inventory right now? Write a comment or ask a question. It's always a pleasure to hear from readers.