Should I take a risk?

[DanielSun 7]

I've come across a seller who has a beautiful little house, fully renovated, priced right. The house is only on market for 2 weeks, but because of his payment problem he needs something done right away, either sell it or rent it. And there was a house opposite of his that took 70 days to sell and that scares him. So rent to own came as a good option to him.

 

He is not willing to cancel the listing, without me actually having 1 buyer already. But if I can pay his first month rent, he would take the listing off and let me show potential tenant buyers. I know for sure this house would sell, but should I take the risk and pay up one month rent? It's about $2300, the potential profit on this is about $8000 to $11000.

[MichaelC 160]

I wouldn't risk $2,300 in the situation you describe, Daniel. Why not just let him continue with his listing while you do your thing to find a t/b? I do deals on listed properties frequently. I figure the homeowner prefers to sell and that's fine. I tell the homeowner to consider me as one more marketing tool working for him. Makes getting the deal easy. And if the Realtor beats me to the punch and finds a buyer, (rarely), good for the homeowner, I say. My business isn't dependent on any one deal.

[DanielSun 7]

Thanks Michael. The reason I want him to take off listing is mainly because I don't want people to see the price he is selling at. I am going to charge a higher price with rent to own, and I can do that because the market support it. But if people start to see the price he is listed at (which is a bargain), it will turn away many potential tennat buyers.

[MichaelC 160]

I understand. I've been in that same situation. If the discrepancy between purchase price isn't so big, you can make the argument to the t/b that they are getting better terms, (low down, rent credits, time value, etc), than if they were buying today.

Also, if the homeowner is willing to accept the bargain price with the Realtor, why are you increasing it?