<Q: Last year a real estate agent/friend found a couple interested in leasing with an option to buy my 2nd home. He was paid his full commission up front. The couple ended up moving out before the lease agreement was fulfilled and the house did not sell. The agent/friend kept all the commission. Fast forward to today when this same agent/friend has found another couple again interested in leasing for a year with the option to buy and he wants another full commission up front. Is this normal? What are the guidelines for paying commission to an agent for a lease purchase? Thank you.
?Anonymous, Gate City, VA
A: The number I have heard for lease option completion rate is about 20%. I think lease options are great for both buyer and seller. On the seller side if you do it right you get money up front, better monthly cash flow and then a balloon at the end. If the buyer doesn?t close then you get to do it all over again making more money and you keep the property. Addressing the Realtor commission; your agent works to get a buyer and put the deal together that earns the commission, if they need to do it again then they earn another commission. In a lease option the buyer pays the commission anyways with part of their down payment if done right. If you do not like this you do the work of your Realtor and see how well you do. I think you will find that it will take you longer and your time is worth more than that. Not to mention all the forms you will need and risk you will be taking on.
Kevin Sucher is a Realtor? with Prudential Northwest Properties in Portland, OR.
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Source: http://www.realtor.com/blogs/2012/09/14/what-is-a-realtors-commission-on-a-lease-purchase/
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