When I first started doing lease options it was about two years before I realized that I needed to work with Realtors because of their control over the sellers. Realtors pre-screen everything for you and in general their sellers aren’t in financial trouble. The Realtors control the relationship with the sellers and the sellers tell the Realtors everything, including personal information. That’s one of the key reasons I like to work with Realtors – they control the knowledge base about the seller.
I look for Realtors who can understand lease options and can help their sellers also understand the benefits of lease option, but this understanding can take time. My job is to assist them and help them understand when to call me. Here is how I generate leads for lease options through realtors. 1. Making cold calls to generate leads
If you look in any real estate section of any newspaper, you can find the top listing agents you need regarding potential properties. Many times the agent is unavailable, but that’s not a problem. Just leave a descriptive message about the property that interests you and let the agent know how to contact you. You might want to make yourself a short script with the highlights of the things you need to discuss so that you don’t fumble for words when on the phone. Also don’t be afraid to ask for information from the assistants. They often know as much or more about the status of the home and the seller.
2. Structuring the Deals through Realtors
Tell the agent how you found out about them – butters them up a bit – and let them know that you are willing to give a presentation. Suggest that theRealtor fax you a potential listing. If you have already developed a relationship with the Realtor, you can always “dig” a little during the phone conversation to see if they have a property that is a good candidate for a lease option that they might have overlooked.
A. Proposal – used to put together a mock-up offer to a Realtor that they can then present to the home owner or seller. It will put down the overall terms in writing without the specifics. This saves a lot of paperwork because you only fill out the other paperwork when you have an agreement on the proposal.
B. Letter to get into the brokerage office – I tell the broker what I do and don’t be anxious on the proposals – make it low pressure. When you’re first starting out, you‘ll want more deals to go through because there’s a great excitement in the newness of the game. Don’t get too wrapped up in a deal happening, because a lot of them don’t happen. I probably get about 40% of the proposals I put out- which means that 60% come up empty.
3. Unwanted Buyers
A Realtor will get a pre-approval letter from a mortgage company before they show a home to a prospective buyer. Otherwise they’d be wasting valuable time and energy with a lot of people who are looky-loos and not serious buyers. The Realtors don’t want to waste their time with those buyers, but those are the buyers I want and I need the names from the Realtors. So I send the Realtors a “Garbage letter” which basically says, “Don’t throw those names and numbers in the garbage! I can help the buyers get into a home with lease options. I offer a $1000 finders fee for every name that ends up in a deal.” This is another incentive to Realtors to work with me. I’m not out to steal their business – I’m here to help them and to offer a unique service to buyers with financial history difficulties. I want to help them move their inventory, so I am interested in the buyers they can’t help in traditional methods.
My favorite way to find lease option sellers and put together lease option deals is thru real estate agents.
Why?
They know their sellers. Their sellers tell them everything! This means they know which sellers are motivated to sell their homes. They know which sellers are considering renting their homes out if they can’t sell it. They know if their sellers have already moved on to their next home and don’t need their cash out of this home right away to get on with their life.
See what I mean? They know the criteria that makes for a lease option seller. The only thing is they don’t always know what lease options are.
That’s where I come in. Or where my students come in. If a real estate investor is looking to do a lease option deal they need to explain to the real estate agent how lease options benefit their sellers and how lease options benefit the agent. In my lease option investing boot camp I train my students how to do this. In this video clip you can see 2 of my students practicing talking to a real estate agent, answering questions about lease options and the benefits to both the home seller and the Realtor.
I did a post yesterday on lease options and finding the seller’s sticking point. In response to that post I received a comment from a real estate agent who said that their sticking point was how do they get paid in a lease option sale. This is a very legitmate concern for real estate agents, after all everyone wants to get paid for their work.
The unfortunate reality is that conventional sales are difficult right now. It isn’t enough to just get listings and put them on the market, because most of them aren’t selling. This means that it’s a lot harder to earn commissions than it was during the boom years. If you want to keep succeeding in this business you MUST ADAPT.
Let’s look at one of your listings that has been sitting on the market for a while. Odds are the seller is starting to get frustrated with the lack of results. At this point, if you only stick to conventional sales, one of three things will happen:
1. You get the seller to agree to a price reduction
2. The seller switches agents
3. The seller decides to rent their home
This means you have a 1 in 3 chance of getting paid your full commission. I’m not too wild about those numbers.
With a rent to own, you still get your full commission (and maybe more) plus the seller gets a better price for their home instead of having to do a price drop. This means more for your seller and more for you.
There is a string attached, which is that you’ll only get part of your commission up front (paid out of the option fee) and the remainder when the tenant-buyer closes on the home. This partial up front commission is going to be more than you would make if the seller just rents the home. And certainly more than if you lose the listing.
Is this ideal? Of course not. Obviously we don’t want this, we’d much rather just have a conventional sale. But that isn’t always working right now. This gives you and your sellers an alternative. We all know this isn’t our first choice, but it is a good option for homes that aren’t selling conventionally.
If you want to learn more about how to earn your whole commission doing a lease option (and maybe even more than the full commission) see my book, Rent to Sell. It’s a hands on guide for home sellers and real estate agents on selling with rent to own. There is an entire section dedicated to real estate agents (including a whole chapter on how to get paid).
I, Wendy Patton, have had a website for some time now. But it was really just this year that I started learning about SEO – Search Engine Optimization. Most real estate investors don’t realize the importance of SEO for their website, but it is key for gathering your leads. When you are doing lease option investing or rent to own investing, or really any other type of real estate investing you want your site to be on the front page of Google for your area so that when those potential leads do a search on the internet they find you.
Real estate agents need this too. When home buyers and home sellers go online and do a search for there area, you want your name to be the one that comes up on the front page of Google. This is a great way to capture leads.
The great thing about SEO for real estate investing or real estate agents is that it is really extremely powerful free marketing. You can do it yourself and really reap the rewards with all of your extra leads. I’m certainly no expert in SEO, but I’ve really come to realize the importance of it for my rent to own business. I strongly recommend you take the time to do some SEO for your website.
Here is a short little clip I did while at a SEO training event I just went to.
Seeing is one of the best ways to learn. Take a look at this video as Wendy Patton walks you through a potential lease option home.
This is the first time Wendy has seen it and she is looking at it to see if she wants to make an offer on it to put together a rent to own investing deal. She points out how she looks at the home through buyer’s eyes – noting things like curb appeal, the nice hardwood floors, the condition of the kitchen, even the wallpaper. When you look at a potential lease option investment you need to see it through your tenant-buyers eyes. They are not as picky as regular buyers because they know they have fewer options, but they also aren’t going to want a complete dump either. Wendy points out a few little, inexpensive tricks she can do to help improve the look of the home, like paint touch ups and buffing out scratches in the hardwood floors.
This home is listed with a real estate agent. Many real estate investors don’t like to look for investment properties that are listed with real estate agents, but it’s Wendy Patton’s favorite way to find lease option deals. Real estate agents have control of most of the “pretty” houses on the market, which are the best ones for lease options. Plus they tend to know what sellers can and what sellers can’t consider a creative solution like rent to own. Take a look at this lease option investing article where Wendy talks about working with real estate agents when doing your rent to own investing.
If you’ve been a real estate investor for more than just a couple of days then you probably know that most “gurus” and investors believe that you should not use Realtors to help you find your deals. I’ll tell you that I, Wendy Patton, as a lease option or rent to own investor, disagree.
Why do the gurus believe that?
Maybe it is because Realtors, just like all of us, like to be paid for their efforts. On the other hand, we, as investors, do not like to give up part of our profit on any given deal.
About 15 years ago I struggled with this exact problem as I was trying to find lease option properties. A good friend of mine (who happens to be a Realtor) suggested I find a way for Realtors to take my offers seriously. Unfortunately, at that time, they were not.
I struggled with how I could get them on my side when presenting my rent to own offers to their clients. It was then (15 years ago), that I discovered I needed to develop a way to entice Realtors to want to work with me. As simple as it sounds, the solution was to pay them! Not only to pay them, but without it costing me a dime, sound weird?
I now have Realtors bringing me deal after deal in my local market. I have one Realtor that has brought me a deal or two every year for the last 7 years. From each of her deals, I have made a minimum of $30,000 profit.
My question to you is, how many of these types of deals do you need to generate a good living? Please don’t say, just one!
During my webinar on Wednesday, May 6 at 8PM EST I will share with you how you too can have Realtors bringing you deal after deal. Instead of fighting with other investors for the table scraps, you can have a pipeline flowing with quality opportunities day in and day out.
Would you like to hear more about how you can create this type of opportunity for you and your family? Then you need to reserve your spot by getting registered for my webinar now! The registration is free and you can do it at my Wendy Patton website.
Now is one of the best times I have ever seen for buying and selling homes as lease options or rent to owns. Real estate market conditions are practically ideal for this type of real estate investing. There is a glut of homes on the market forcing sellers to consider alternatives to selling their homes. Many sellers think their only choice is to rent their home if they can’t find a buyer.
Since their minds have already gotten past the hurdle of having renters in their home they are the perfect candidate for selling on a lease option or rent to own. They may not know about selling their home as a rent to own, but they need it. This is the time when lease option investors should be going out and putting together lots of deals. This is the time when real estate agents should be learning how to put together rent to own home sales to help their buyers and sellers.
Financing is harder to get now than it has been in quite some time. This means that many would be buyers are getting left out because they can’t qualify for a mortgage right now. There are lots of potential buyers out there like this right now. Every time I post rent to own ads on Craigslist I get tons of responses. It’s so funny when I hear people say there are no buyers right now. What they mean is there aren’t many conventional buyers. Lease option buyers are everywhere right now. This is also the time when rent to own investors should be making use of free marketing to attract buyers. Real estate agents should be doing the same thing. In this kind of market if you have the buyers you are golden, even if they are lease option buyers.
As I said now is the time for rent to own or lease options. This is one of the greatest times there has been for lease option investors to be putting together deals. This is also a great time for real estate agents to learn how to do rent to own sales and really boost their business.
I am getting really excited about this free webinar tomorrow night. If you are a rent to own or lease option investor, real estate agent or home seller this is important for you. If you want your buyers to close on the home you need to have them improve their credit. If you leave it up to them they almost never get around to it. You will need to help them along to get their credit in shape so they can qualify for a mortgage and purchase your rent to own home.
Not only will we look at whether credit repair companies work or if they are just a scam. We will also take a look at how credit scores are generated, what factors affect them and some common misconceptions about things you can or cannot do to improve your credit. You will be surprised by some of the information. There are a lot of myths out there about rebuilding credit and some of those myths can acutally hurt your credit not help them.
Not only is this information useful if you have a rent to own or lease option buyer but it can also be useful for you if you need to work on your own credit. Remember, the webinar is scheduled for tomorrow night, Wednesday, April 29th at 8 PM EST. To register go to my Wendy Patton site, under webinars.
When you are selling a home as a rent to own or lease option, whether you are a home seller, a real estate agent, or a real estate investor, you must get your tenant-buyer to close on the home to complete the sale. Most tenant-buyers these days need to improve their credit to qualify for a mortgage. It’s a lot harder to get loans now than it used to be. Some rent to own buyers have been through foreclosure or bankruptcy, others lost their jobs before coming to you, sometimes they just had too much debt and needed to pay off some bills. Whatever the reason almost all tenant-buyers need to improve their credit before they can complete the purchase of a rent to own home.
The rental period during the rent to own gives the tenant-buyer time to improve their credit and qualify for a mortgage. The question is should they work at it themselves or should they sign up with a credit repair company? Credit repair companies have been making some news lately, although not all of it is good. Because improving credit is so important for rent to own buyers so they can qualify for a mortgage, I have decided to host a webinar that takes a look at credit repair. We’ll look at whether credit repair is a scam, and whether it can work. This webinar is absolutely free so I encourage you all to sign up. You can sign up on my Wendy Patton website. The webinar is Wednesday, April 29th, at 8 PM EST.
Remember, that improving credit is absolutely critical for tenant-buyers to purchase a rent to own home so you don’t want to miss this.
I love this video! Missy has sold over 70 homes in the worst real estate market in the country just by being creative.
She sells homes conventionally and by using lease options or rent to owns. Selling 70 homes in one year is great even in an up market but she has done it in a lousy market. Missy shares her tips on how she gets homes sold. If you are a real estate agent and you are making all of the commissions you need then don’t watch this. But if you would like to increase your commissions take 1 minute of your time and watch this video. Remember that’s 70 commissions in one year!
You need to adapt to survive in this market and lease options work.
