Question Details

Nici, Home Seller in Chicago, IL

I am putting a family member's estate up for sale, and my realtor has found someone wanting to accept a

Asked by Nici, Chicago, IL Tue Feb 12, 2008

lease/purchase option closing 4 mths from now. Why am I being charged a leasing commission for a lease/purchase option contract, and if so, can I deduct this fromt the closing commission should everything go smoothly?

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The other respondents have answered your question regarding commissions very well. I would like to point out another important issue, though:

I would make sure the option money you receive is adequate compensation should the transaction crumble--and would do a thorough credit and background check before turning the property over to these tenants.

Commissions paid could be chump change compared to the costs of eviction and property rehabilitation.
0 votes Thank Flag Link Wed Feb 13, 2008
Roberta Murp…, Real Estate Pro in Carlsbad, CA
I do not know real estate law in your area (disclaimer).
It seems to me that if there is only a four month window, why would you not simply close escrow in four months? Maybe I am misunderstanding your question.
If the question is, they are going to lease the property for four months, and then, at the end of four months, open esrow, from where I work that is still two transactions with the paperwork that goes with them. That's a lot of work.

Remember, Realtors get paid for results, not time. If the Realtor is representing both buyer and seller (dual agency) and you don't think that they deserve the full commission, that's an arguement you need to have to the Realtor. If this is really the best offer is the question. I don't know your market, by looking at the CMA you should know if the offer is fair. Forget the lease part of it for a minute.

So far as the lease commission goes, I would go along with Linttte's point and simply discuss it with your Realtor. I don't know your market. Maybe this is a great offer and the best the Realtor could do in your market.

Just remember, nothing is sold until escrow closes. Most lease options in my experience to do "option". They just lease.
0 votes Thank Flag Link Wed Feb 13, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
I think I would discuss your concerns with your realtor. They may be willing to deduct the leasing commission from the closing commission. It sounds as though you signed a contract with them to lease purchase and that is why they are paying out a lease commission. It may be that they are not the one that found the buyer/renter and so they would have to honor what they offered.
0 votes Thank Flag Link Tue Feb 12, 2008
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