When a realtor facilitates a lease-option with a listed property how does the realtor get paid his/her commission? Wendy Patton said she uses the lease-option fee, but I’m still unclear how it works. Obviously, the seller is going to want a down payment. Does the realtor’s commission come out-of-pocket from the buyer (me)? Thanks.
The Realtor represents the seller, no? Therefore the listing agreement is between those two. You shouldn’t have any to pay any money to the Agent for representing someone else.
shegeek72,
Do you have Wendy’s book? If so, read it a few times as she pretty much explains the topic.
From memory…
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What the seller wanted was to sell the property. Then they decide to rent. When that happens they are not expecting a down payment half as much as a rental deposit. A smallish number relatively speaking.
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The agent is looking at a lost sale with nothing to show if the owner rents the place. Maybe they will get the listing in a year, maybe not. Wendy is offering some sort of payment now. Maybe not the full amount until the sale actually takes place. Better than zero and likely sooner than it would be otherwise.
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With the tenant buyer’s option money Wendy can fund the deposit to the seller and there should be enough for the seller to pay the agent. Or Wendy is paying the agent a fee in lieu of the lost commission. You want to keep it legal. You also just need to line up the cash flow plus make sure everyone understands that the L/O is not structured in the exact same way as an outright sale would have been.
It depend some time agent demand commission from buyer and in some cases from seller. This is also possible that he charge from both parties.