I have a couple of active listings in an area that is saturated with actives. These have very little chance of selling for some time I sense. I have spoken with my client about offering these up on a lease/purchase option basis. Should I charge normal closing costs up front?
I do know there is a rental agreement AND a purchase agreement for the tenant to fill out, not a problem there.
I guess I am looking for some good advice on the best way to offer this up for my client...thanks

One thing you might consider before you suggest this is how are you going to be paid?

This kind of ties into my piece about collecting the closing costs...that would include my fees. My thoughts are that this is a rental AND a sale....I would be paid as if this were a sale and forego my rental fees.

Thoughts?

One investor technique is to find an owner who is willing to do a lease option. You then agree to find the owner a tenant within a certain timeframe. When you find the tenant, the tenant pays you a finders fee, or contract fee, whatever you want to call it. Size of finders fee varies based on value of home and how much the potential tenant can afford. You earn the finders fee, the owner gets a LO tenant and you're done. I'm not sure how this would work for a realtor who had the listing though. I'd love to hear more ideas.

This just happens to be my speciality so I hope you don't mind taking the advice of a non-agent.

As offshores eluded to, investors who are looking to get in and out quickly in a situation like this, would buy a lease/option from the seller and then assign their position to a 3rd party buyer for X dollars. The amount varies depending on market conditions and competition, but it's usually 3 or 4% of the purchase price.

As long as the rent is in line with the market and there isn't excessive competition from other sellers offering lease/options in the immediate area. Then you should be able to fill the property very quickly with little effort or expense. So don't be too greedy and demand that the seller pay the other 2 or 3% upfront out of their own pocket. Take it at closing unless your broker won't go for that.

What about someone who just wants to live there and eventually buy it. maybe rent it for a year and then exercise an option....