Sharing Option Consideration

[DeeLight 8]

I've been studying here for a long time (I'm on the eye donor list now) and find mixed views on letting the seller get some of the option consideration. Today's sellers are more savvy and most know that with a l/o there is $$$ down.

 

No one has asked me yet. But what do you say to address this when it comes up?

[MichaelC 160]

Depends on the deal and what you want to do. Remember, you are the one in control.

You're right, though. The question will arise. First thing to remember is the option money is how you get paid, so share it grudgingly. When the topic comes up, then you explain to the homeowner this is how you get paid, it is added to the purchase price and doesn't come out of the homeowner's pocket. Be sure they understand this.

If they still insist on something down "in case the tenant causes damage", you begin to offer tidbits. "Mr. Homeowner, tell you what. I understand your concerns and I want to help you out. If this were a traditional rental you would receive a refundable security deposit in the amount of one month's rent, (or whatever is the norm in your area). Instead, how about if I give you $(fill in the blank), as nonrefundable option consideration?"

Something like that, Dee, ought to help you reach an agreeable figure to keep everyone happy and the deal alive.

[pilot76180 51]

I used to give squat, and leave it at that, but found I sealed more deals and made everyone warm and fuzzy when I just gave them some $$.

I usually give $750-$1k on most deals.

On higher deals where the option fee is $12k or so, I might give $2k.

[DeeLight 8]

Thanks guys. Knowing the approximate verbiage and numbers helps. I've read The Manual 3 times but when I get on the phone with a seller I get all tongue-tied and blank-brained