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Because a commission for sale may not result, or it may be a year or so away, few if any Taos real estate brokers will discuss the lease purchase or rent-to-own option with sellers. As I am quite happy to offer real estate consulting services on a fee for service basis, I wanted to write about this method of selling a home.

Seller: Taos real estate has never been a market where homes move quickly. Even in better times, the average Days on Market for homes was almost nine months. Now that sales are even slower, sellers could find that it’s difficult to move a home in under a year, and that may mean a lower price than they anticipated. Some benefits to sellers in considering a lease purchase:

• Buyer/Tenant can be required to place a non-refundable option deposit up front, applicable to the down payment if they exercise the option and purchase the home at the end of the lease period. This can be any sum, even in the thousands of dollars.
• The renter who anticipates purchasing the home will normally take better care of it, many times doing improvements at their expense.
• If, at the end of the rental period, the tenant does not exercise the option and purchase for whatever reason, the seller keeps the option deposit and puts the home back on the market.
• Some portion of rental payments can be applied to down payment, but it’s a negotiable item.

Buyer/Tenant: The renter who dreams of home ownership but is short the necessary down payment, or has credit problems, can really benefit in a lease purchase situation.

• They can lock in a purchase option on the home they really want.
• The tenant buyer can live in the home, taking excellent care of it until purchase.
• Time is now available to repair credit and/or build a down payment.
• Some of down payment can be built up in lease payments.

Real Estate Broker: Well, you have to be a customer-focused broker to appreciate the lease purchase or rent-to-own deal. As a real estate consultant, I can negotiate a flat fee, hourly rate, or percentage of the option deposit with the seller as my fee. True, it’s far from a sale commission, but we can also negotiate that in if the buyer tenant exercises their option and purchases at the end of the lease. If they don’t, well, maybe the seller will list with me.

If you’re a home seller in the Taos market, and you’d like to consider this option, I’ll be happy to discuss it with you.

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