ello everyone and thank you for reading. I'm a new real estate agent and I have a couple who needs a home. There are very sweet and I would love nothing more than to make this possible. Here is their situation:

Currently they live in West Palm Beach, FL and are moving to Phoenix by the end of July.

The wife works at Home Depot and has been for 9 years. She nets about $1800 a month.

The husband is a massage therapist and currently makes about $3000-$3500 a month, but after moving he will lose his clients because of the long distance move. He says their credit score is 560, but I'm unclear of whether that's his or his wife's.

They say they want to do a lease option for about $1100.

I'm not sure about how to go about all this. We covered lease options in school, but it was a quick once-over and all I remember is that the buyer pays an non-refundable option fee, and then part of each month's rent is applied to the down payment. I'm also pretty sure a purchase contract gets written up at the beginning of the lease with all the purchase information. So... what the best first step to take here? And are there any other financing options that might work for these people?

Thanks so much!

with a credit score of 560, you wont be able to get a loan, better go with a lease option

How would I get the ball rolling with the lease option, though? Talk to sellers of homes they'd be interested in? Talk to my lender friend who they would probably use? And where can I find a lease option contract?

In Florida you as an agent are NOT allowed to write a Lease Option... that is considered the Practice of Law in Florida.

If you were a principal to the deal you could if your brokerage would allow it... most will not.

This is a creative real estate technique not a traditional real estate activity and most brokerages will not desire or allow you to become involved. However if you do become involved even in making recomendations... you need to understand the legal needs to protect the parties. In Florida and most other states the Lease should have no connection to the Option. You can normally wright the Lease or use the FAR or FAR/BAR forms available to you. The Option must be totally separate and you may not have anything to do with it. Their is the major problem. Someone like an attorney would have to develop it and you / your brokerage has no assurance of every receiving a commission. Your broker needs to review the E&O policy on this type transaction.

I do frequently make use of L/O's but am always acting as a party not an agent for someone. These are very subject to law suites around the time of Option.

If they are actually friends... far better ways exist and mortgages are normally available at higher rates that would still be preferred to a L/O in most circumstances.

Ok, lease otions are a very fun use of a REALTOR's time because there is a lot of trial and error. Often a listing may say it is lease otion available but once it comes down to brass tax they decide against it. I handle many lease otions in Las Vegas, and would love to help you out with this, but im not too sure of the laws over where you are. One thing I can say is you need to combine a purchase contract and a lease contract, and spell out most of the terms in anaddendum. So those are the 3 vital contracts to use when setting that up. If you have any questions just let me know...

why do you need to combine both purchase and lease or purchase and option? wouldnt this set the seller up for a tenant buyer to claim equitable interest? i would keep the lease contract and purchase contract separate and also becareful with your verbiage.

the sellers are at risk for a possible judicial foreclosure, tax reassessment, disguising a sale, DOS violation

also the property is at risk in regards to liens attaching through marital disputes, bankruptcies, creditors, lawsuits, etc?

it can really be looked at it as writing a purchase a greement and delaying the close for 6 to 12 months, and having the buyers occupy and pay all bills until closing. As long as all terms are spelled out it can be semi-simple

can you share some of the terms in the addendum? sorry i only know of the lease options/purchase from an investors point of view.

well for example you need to spell out of course how long the lease will be, how much is going down as option money (also that it will be applied to purchase price, but unconditionally released to seller) what portion of rent will be applied to purchase price. It is very extensive, is there anything in particular you were curious about?

im just curious as how a Realtor would structure it associating their broker and their traditional policies.

are you protected through E&O?
does your broker review your lease option contract?
do you apply rent credits to the purchase price?
what happens if the buyer defaults?
is there a contingency fund for maintenance, repairs, missed payments, etc?
is the option non refundable?