Lease option purchase option fee

3 Replies

What is a fair percentage to charge tenant/ buyers as an option fee that would still make the payment affordable for the tenant/ buyer but still profitable ? This may sound like a silly question,  but I just want to know what others are charging,  and does this apply toward closing costs, or is it just a non refundable fee?

I charge 5%.

This does NOT get credited towards closing.  This is 100% of the cost of the contract.  The contract is the Option to Buy.

...and it is non-refundable since the buyer of the Option Contract gets 100% of what they paid for.

We are mostly using $3900 for our non-refundable option fee (plus the first month's payment to move in), and this for homes typically with current valuations in the $140-180k range. The way our contracts work, we show an option price of say, $199k and then we give a credit for the option fee, giving them a net purchase price of $195,100.  That way it feels better for the resident that they get some value for their non-refundable option payment.

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