I've seen some strange things working with lease options, but a two month lease option has to be the strangest. The sellers and I thought about this long and hard and something just doesn't add up on this one.

The seller's agent called me because they know I specialize in lease options. She asked if I have any homes in a certain area, that aren't on the MLS. I do have those from time to time, and this time I happen to have one.

You see this is when things started to get strange... when I told her about the house. She said that it would be perfect and wondered if my seller would be willing to accept $10,000 down and pay her the full commission up front. I explained to her that this isn't how things traditionally work with me and my lease option sellers. She would get 1% upon move in and the remaining 1.5-3%, depending on the home, when they exercise the option to buy. This is when she tells me, "This is only going to be a two month lease option and they are putting $10,000 down"

"Let me figure this out. Your 3% would come to $10,470 and that isn't even covered by the down payment. Why would a seller ever agree to pay you more than the down payment up front on a lease option and why the heck is it only a two month lease?"

She then explains "My seller is 90% sure he wants to live in this area, but wants that little buffer of security with a 2 month lease option, so he can back out if he wants." I ask again, "Then why would my seller agree to pay you more than he is getting in down payment up front? Why I would get nothing for my marketing? If you truly believe this buyer will exercise the option then you won't mind the 1% finders fee and the remaining 2% when they exercise the option."

I told her straight up that I would talk to the seller, but something sounded very fishy here and almost to the point of fraud and my seller agreed! I don't know what she was trying to get, but something just didn't seem right. If you are a seller and some one approaches you with something that doesn't seem right, ask questions and seek advice, because you maybe headed for trouble if you don't.



Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739