All Forum Posts by: Warren Blevins

Hi BP Community.

I am selling a house in central Florida and was contacted by an investor with the following Lease/Option agreement. This guy apparently finds potential tenants/buyers that want to live in a house for 3 years and then buy at a set price. The “agreement” he sent me is below (identifying details redacted):

______________________

RESIDENTIAL LEASE and OPTION TO PURCHASE AGREEMENT

BUYER/TENANT: XXX Holdings, LLC

Date: 2-16-2018

SELLER/LANDLORD: XXX

PROPERTY ADDRESS: XXXXXX

RESIDENTIAL LEASE

1) Rent: $2,500 per month

2) Lease Term: 36 months, beginning March 16, 2018 and ending March 16, 2021.

3) Maintenance: Buyer/Tenant will be responsible for maintenance and repairs of

the property, not to exceed $500 per incident.

4) Sub-Lease: Buyer/Tenant has the right to sub-lease this property with written

consent by the Seller / Landlord, and this shall not be unreasonably withheld.

OPTION to PURCHASE

1) Purchase Price: $ 345,000

2) Option Period: 36 months, beginning March 16, 2018 and ending March 16,

2021.

3) Option Consideration: $100 - All Option Consideration will be credited in full

toward the purchase of the property.

4) Rent Credit: Buyer/Tenant will be credited $ 0 per month toward the purchase.

5) Closing Costs: Purchaser will pay all allowable closing costs.

6) Expiration: This offer shall expire on March 16, 2021.

7) Inspection: This offer is contingent upon physical inspection of property and

subsequent completion of a more formal and signed Residential Lease with Option

to Purchase Agreement.

8) Non-Exclusive – This agreement is non-exclusive and can be canceled anytime

by either party.

9) Assignable – This Agreement is assignable with written consent by the Seller /

Landlord, and this shall not be unreasonably withheld.

X_____________________________ X ________________________________

Seller/Landlord Date Buyer/Tenant Date

_________________

I have a few questions:

1. Is this legit?
2. Should I hire an attorney to make sure our agreement is solid?
3. Does the state of Florida have boilerplate agreements for this sort of arrangement, like they do for purchase agreements and rental agreements?
4. The current market rent and price is in the agreement above… Does one typically go higher or lower than the market rent/price on these sorts of agreements?
5. What questions should I be asking this investor when I call him back?
6. What provisions should I ensure are included in the lease/purchase option agreement?

Thanks!

@Russell Brazil When I replied with my offer of 0% commission, I did indeed reply to the buyer and buyer's agent directly because I wanted to ensure he knew my terms. The buyer initially reached out to me directly because he found the home on zillow himself. It turns out the buyer had no written agreement with the buyer's agent nor had they agreed on any compensation schedule. She informally offered to show them a couple of homes (which apparently she did).

Hi BP community. I need your opinion on a situation I've encountered.

I own a rental property in FL in a very desirable neighborhood.  I decided that since the market is hot, I would sell by owner.  I posted on Zillow and within a couple days I got a call from an interested buyer.  When I spoke to the buyer on the phone, I asked them if they are working with a RE agent. I indicated that I am not ready to pay a commission since I believe I can find a buyer without an agent.  The buyer indicated they are working with an agent.  I directed the buyer to talk to his agent to get on the same page given my desire to avoid paying a commission.  Within minutes, the buyer's agent called me back and asked if I wouldn't mind paying them a commission since they spent a lot of time with the buyer.  I said that I wasn't ready to pay a commission because I believe I can sell without a realtor's help. That said, I told the agent that if I can walk away with a certain net proceeds, then I would pay a commission. The buyer's agent didn't agree to the terms, but asked to see the property anyway.  I coordinated with the current tenants to let them see the house.  Within minutes of the showing, the buyer's agent called me to notify me that an offer was forthcoming and that the buyer's agent would be charging me a 2% commission.  I told the buyer's agent I would need to see the offer before having an opinion.  I received an offer and ran the numbers and it turns out that by including the buyer's agent commission, we do not meet our target.  I marked up the contract and returned it to the buyer and his agent with 0% commission as a counter offer.  My thinking being that if the buyer is really interested and has a buyer's agent agreement, the buyer will pay her commission.  

Lo and behold, the buyer accepted my counter offer with 0% commission via email reply (note: the buyer didn't include his buyer's agent in his email acceptance reply). At that point I received angry text messages from the buyer's agent calling me names and wishing harm on me.  I emailed the buyer back to make sure he is ok with the 0% commission and he indicated via email he is ok with that.

Tonight the buyer left me a voice mail that the buyer's agent called him and indicated that the  buyer's agent's brokerage firm will be pursuing "legal action" against me, the seller. 

Am I in legal jeopardy? I'm confused as to what I did wrong. I thought I was clear what my conditions for sale were and now I'm being insulted and threatened because my conditions were not met.

Any advice?