Lease Option Techniques for Buyers and Sellers


As a home owner or investor, the lease option is a preferred technique to sell property or home and gain profits. These lease option techniques are offered to assist both the seller; the buyer; and for the investor, such methods as the flipping lease and sandwich lease options. There are various lease option techniques, all easy to customize to the individual specific situation.

As a Buyer, listed here are some lease option techniques:

  • Start early to secure financing, especially when you have to clean up your credit. The more time you get the better. Keep in mind that, in most cases you won’t get your cash back if you do not exercise your option.
  • Set up an escrow account to secure your funds, should the owner not honour your option? Most owners are reliable, but why take the chance.
  • Include a clause to allocate the lease to a third party; if you are unable to find financing, it is possible to assign it to someone who has.
  • Have the document notarized and register it in public real estate records to motivate the owner to honour the option.
  • The right to increase the option deadline gives a cushion should the final closing day approach before you are ready with the funds.
  • Ensure you accept contract language to increase your lease option techniques.
  • Consider bearing the cost of maintenance with the seller, as you both have interest in putting the property in perfect condition.

As the Seller, listed here are some lease option techniques you should consider:

  • Consider contract terms and conditions such as repairs and maintenance; subletting, one of the most popular flipping leases option; and increasing the option time frame.
  • Consider owner’s funding as a lease option technique especially when the tenant is encouraged, but basically may have difficulty obtaining conventional funding.
  • The lease option is generally a complex document and includes aspects of both the lease contract and conventional sales. Consider a real estate attorney to help you out.
  • Require an option fee from the tenant. Demanding even few thousand or a few hundred gleans out those potential buyers who are less motivated to exercise the option.

Flipping lease options usually consist of the investor finding another buyer to exercise the option prior to the time the option is due and flips the property.

Or probably consider constructing a sandwich lease. The investor sublets the lease option to someone who intending buying and when the buyer is set to exercise the option, you do the same also. You are in between the buyer and seller, hence the term sandwich. The strategy to applying lease option techniques, especially flipping lease options is the timing in getting a seller and a buyer.

Lease option techniques to locate a buyer

Run adverts and list the property “great fixer-upper” or “rent to own” if the property or home is in need of development. Get a buyer that has “fixer-upper” skills. 

Lease option techniques to locate a seller

Read foreclosure listings and real estate advertisements, in both for rent and for sale sections especially when you are exercising flipping lease options.

Get in touch with sellers with old listings. The sellers can be encouraged to consider lease option techniques that they may not have regarded before.


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