Yesterday I rolled things back to the very beginning and explained what lease options are and what they are comprised of.  If you aren't that knowledgeable about lease options that post is a good place to start.  I also promised that I would talk about why a home seller would consider lease options and what the benefits to the seller are.

Higher Purchase Price - Rent-to-own sales typically command a price premium over traditional sales. The buyer is paying extra for the flexibility he receives by not having to do an outright purchase immediately. I will be going into how to price your house as a rent-to-own in more detail later.

Higher Rent - You may be able to charge more for monthly rent in a rent-to-own than you would for just a straight rental. I will cover this in more detail later.

Cash Flow - If your monthly payments are less than the monthly rent, the difference goes into your pocket.

Option Fee - This upfront fee paid to you by your buyer is what secures the purchase price down the road. If the buyer closes on the home, it would be applied towards the purchase price. If the buyer elects to not purchase the home, the option fee is forfeited and still remains yours. Either way you win. If you were to just rent the home, the tenant would put down a security deposit. The option fee is different than a security deposit. A security deposit is owned by the tenant and can’t be used by the owner, except for repairing damages, unpaid rent and other provisions as mandated under state laws.

Eliminates the Burden of the Mortgage Payment - If you have already moved on to your next home and your old house is sitting empty while you try to sell it, then you are saddled with TWO mortgage payments. Hopefully you aren’t in this position, but if you are I feel your pain. Ouch! If the house has been taking a while to sell, you know how fast the money coming out of your pocket adds up. It gobbles up any equity you have at a frightening rate. Placing a rent-to-own buyer that pays that extra mortgage can take away your pain.

Getting Your Home Sold Faster - In slow selling markets, offering your home as a rent-to-own can help you get a buyer into the house much faster. This option will open up your pool of buyers significantly.

Getting Your Home Sold at All - If your home is just flat out not selling for whatever reason, offering it as a rent-to-own may be the only way to get it sold.

Those are some of the key benefits to home sellers for selling their home on a lease option.  Look, I'm not saying that lease options are the perfect situation for every transaction and every home seller.  But the reality is that some home sellers NEED lease options to get their homes sold.  And there are some great benefits for them in doing so.  As a lease option investor or as the seller's real estate agent we can do them a great service by offering them this option.  If you want to learn more about lease options and get training in doing lease options, either as a real estate investor or as a real estate agent take a look at my website for lease option training.

Real estate agents know of a dirty 4 letter word in real estate.  They cringe whenever they hear it because it means all of their hard word, all of their advertising, all of their time will have been for nothing.  They hear this horrid 4 letter word when a seller has a home that's been sitting on the market too long.

The seller grows impatient.  They want their home sold and they are running out of time.  That's when they call their listing agent up and say "Realtor, if you don't sell my home soon I'm going to have to RENT it!"

Rent is that dirty 4 letter word.

If you are a real estate agent you need to learn not to fear this.  You can still get your full commission from this seller because now they are a prime candidate for a lease option sale.  One of the biggest hurdles sellers often have to overcome with considering a lease option is the idea of having tenants in their home.  But they've just told you that they are now considering just that.

Selling on a lease option is obviously not the first choice, but it sure beats losing the listing or just renting the home and not getting paid squat!

Real estate investors who are trying to find real estate agents to work with need to keep in mind that real estate's dirty 4 letter word is your key to networking with agents.  Most agents don't know what to do when they hear the word "rent."  You can show them how you can help both the home seller and the agent.  Plus if you let the agent double dip when you find the tenant-buyer the agent is really going to appreciate you.  You did all of the work finding the buyer, they come out looking like a hero, and everyone gets what they want.