Posted by Matt B on March 29, 2000 at 18:14:13:
Tried e-mailing it to you, but it bounced back to me. E-mail me at my e-mail address and remove the NOSPAM and I’ll send it out to you.
Frquently Asked Questions sheet for sellers on lease options - Posted by Matt B
Posted by Matt B on March 28, 2000 at 11:07:26:
I was inspired by B.L. Renfrow’s and Russ Sims’ posts earlier concerning that fact that they have a FAQ sheet that they give to tenant buyers about the lease option. I asked B.L. Renfrow to fax me his sheet, and then started thinking that a Q&A sheet like that would come in very handy for sellers as well.
I hear the same questions from sellers so many times that I thought it might be a good idea to give them a sheet to look over to reinforce what I am telling them. It also helps me look even more professional to have something like that with my company logo on top.
Well, I’ve pasted it below, and would like some feedback as to what everyone thinks. Are there any other questions anyone can think of that they hear on a regular basis from sellers? Is this a good idea, giving sellers a sheet like this? What do you think?
Here it is…
Frequently Asked Questions About Selling Your House by Lease Option
Q What are the benefits of selling my house on a lease option?
A When PA Home Solutions, Inc. lease options a house, we guarantee in writing that all maintenance, repairs, taxes and insurance will be paid by us while we are selling your house to a sub-tenant/buyer. PA Home Solutions, Inc. only deals with high quality people who are looking to buy, not just rent a house. When you sell your house by lease option, PA Home Solutions, Inc. handles all the marketing of the house. This includes paying for advertising, screening potential tenant/buyers, and showing the house. We want the process of selling your home to go as smoothly as possible, with no more headaches for you caused by buyers who tell you that they want the house, but end up not being able to qualify for financing. You are also relieved of having to pay double mortgage payments in the event that you have to move before you are able to get a buyer for your home. In short, PA Home Solutions simplifies the process of selling your home by handling all the details that waste so much of your time and money.
Q What are the advantages of selling my home by lease option over listing it with a Realtor?
A PA Home Solutions, Inc. makes your monthly payment while a sub-tenant/buyer is qualifying for a loan. All your expenses related to the house are taken care of. Try getting a Realtor to do that while listing your home! Another advantage is that PA Home Solutions is only interested in putting high quality tenant/buyers in the house since we make our profit by selling for higher than we buy. Since we guarantee all maintenance on the house, it is in our best interest to ensure that our tenant/buyer will take care of the home and eventually secure financing to cash you, the seller, and us out. This means that we put our tenant/buyers through an intensive pre-screening process before they are even permitted to look at the house. We don?t just work for commissions, we have a vested interest in the house, and making sure that it gets sold.
Q How long does it take before your tenant/buyer cashes me out?
A That can depend on a number of different factors. We work with many mortgage brokers that are usually able to get most people financed after they have paid for 6 months on the lease option. Since everyone?s credit history varies, that time period can be shorter or longer for the tenant/buyer that we eventually put into the home, so we cannot guarantee when our tenant/buyer will secure new financing. However, until our tenant/buyer qualifies for financing, we continue to pay all the expenses related to the house. It is also in our best interest to get our tenant/buyer a new loan, since that cashes us out as well, so we work aggressively to get our tenant/buyer financed as soon as possible.
Q Why don?t I just sell the house myself?
A That is always an option that is available to you. The difference would be that you are responsible for your monthly payment, your taxes, insurance, and any maintenance or repairs that the house needs while you are trying to sell it. You then need to try to find someone who can actually qualify for financing, wait for them to get approved, and hope that they don?t pull out of the deal, making you start the whole process over again.
Q Why don?t I just find my own tenant/buyer to put in the house?
A If you have the expertise to screen potential tenant/buyers, check references, know what sort of credit scores will allow someone to be able to be financed, deal with maintaining your home while someone else lives in it, work with mortgage brokers to get them financed, and finally set up a closing, then finding a tenant/buyer on your own would be a viable option for you. If you lack the expertise in any of these areas, we are able to help.
Q What if your tenant/buyer doesn?t buy the house?
A Our tenant/buyers are carefully pre-screened to ensure that they want to buy the house, and are able to buy it at some point in the future. However, circumstances can change in someone?s life, such as an unexpected job transfer, that make it necessary to move. In situations like that, we continue to pay all the expenses for the house, while we find another qualified tenant/buyer to put into the home.
It is our goal to ensure that the process of selling your home is a smooth and easy one for you. We strive for a win-win-win situation in all our lease option deals. You, as the seller of the house, win by receiving the assurance of knowing that while the house is being sold, all of the expenses are taken care of, and the house is maintained. Our tenant/buyer wins by getting to own a home in a shorter amount of time than it would take them if they were trying to buy conventionally, as well as being able to immediately occupy their new home, while qualifying for a loan. We win by profiting from the sale of the home, as well as gaining 2 more satisfied customers. The reason that we are in business is, of course, to make a profit, as well as use our expertise in real estate transactions to assist home buyers and sellers in making the sale or purchase of their home an easy one.
MATT, sheet for sellers on lease options - Posted by Rob
Posted by Rob on March 31, 2000 at 09:28:02:
Matt,
excellent posts, I enjoyed them. If you get a chance can you please e-mail the seller sheet & FAQ. Thanks in advance.
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by Lisa
Posted by Lisa on March 30, 2000 at 11:01:57:
Matt, I’m sure that you’re inundated with requests for your FAQ sheet and direct mail letter, but would you mind sending it to one more? Thanks so much for your straight forward post. Extremely helpful and choc full of good ideas. This Board is great, but sometimes people are afraid to let go of their “secrets” to success unless prodded or paid. We’re all in this together! Quick questions: Do you assume responsibility for the taxes and insurance if they’re not included in the mortgage payment? Also, do you take care of ALL maintenance, or just that under $100, as I’ve often heard done? Do you assume responsibility for “pre-existing” conditions to the house to make it more sellable to a TB?
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by Doe
Posted by Doe on March 29, 2000 at 08:53:17:
Thanks for your last response Matt B!
I forgot to ask you 1 more thing,
How do you do a reverse search for the addresses of
FSBO owners by just using their telephone #. I’ve been
trying to do this for some time but I have not figured
it out. I tried a people search in YAHOO.
How do you do it?
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by Doe
Posted by Doe on March 28, 2000 at 21:29:46:
Hi Matt B!
I know your postings have been very popular today. I hope you can take the time to questions I have for you.
When marketing,
Do you make any calls to FSBO ads in the newspaper or on the internet. Or do you prefer the calls come to you from YOUR ads & letters?
Second, I was wondering how many LO’s have you done so far w/ your marketing methods. Do you have any suggestions for managing more that 10 LO’s. Another words, how do you organize yourself & keeping track of all the LO’s you maintain
Lastly, could you email me a copy of the FAQ for buyers too.
thanx
Doe
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by B.L.Renfrow
Posted by B.L.Renfrow on March 28, 2000 at 20:58:18:
Hi Matt,
Hope you received the stuff I sent earlier today in response to your request.
I like your FAQ sheet for sellers. I also use something similar (though it is “borrowed” from another source - so before anyone asks, no, I can’t send it to you)!
You’re right about the importance of being able to identify the motivated seller on the phone, without wasting further time. I find probably only 25-30% of callers on my “I Buy” ads are L/O candidates, and of that number, maybe half will agree. While there is certainly nothing wrong with L/Os, as you gain more experience, you will start to discover alternative ways of putting deals together when a L/O proposal won’t fly with the seller, for whatever reason. I find I am now making as many offers using options with the intention of owner financing with a note sale, as I am L/O offers. Naturally, the “gotta have cash now” sellers will usually listen to that, where they would have no interest in the L/O.
The direct mail idea is interesting. I have not used it, simply due to the dismal results from direct mail marketing in general, but perhaps I should reconsider! I think Joe Kaiser also does mostly direct mail, as well as calling rental ads.
Brian (NY)
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by eric
Posted by eric on March 28, 2000 at 13:21:00:
I am curious, since you are obviously doing this a lot - how are your ratios when talking to sellers, in terms of convincing to go ahead with this - is it typical 10:1, or more, or less? Also, where do you find sellers interested in doing this? Do you concentrate on those trying to sell their house, or those trying to rent their house, or both?
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by CurtNY
Posted by CurtNY on March 28, 2000 at 12:02:51:
Matt,
Great idea, I think this would really sell those iffy sellers on the idea of a lease option. I often try to explain L/O to an owner but if they’ve never heard of a lease option before they think it’s a scam. I think this will help. By the way could you post (or email me) a copy of the FAQ for buyers too. GOOD LUCK with all your RE Investments.
CurtNY
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by Matt B
Posted by Matt B on March 29, 2000 at 12:29:37:
I also use www.theultimates.com/white. At the bottom are 2 reverse search engines.
Reverse Phone Look Up - Posted by Branden
Posted by Branden on March 29, 2000 at 09:24:17:
The following website has a reverse phone search engine.
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by Matt B
Posted by Matt B on March 29, 2000 at 07:53:52:
As far as the marketing goes, I let sellers call me. It is another huge waste of time, in my opinion, to call all the ads, take the time to listen to a description of the property, try to guess at the sellers motivation, get shot down, and then call another ad. It takes a lot of energy out of you to try to deal with people who aren’t motivated, so why do it? At least when they are calling you, you know that there is a much greater chance of them being motivated.
As far as managing multiple lease options, I don’t really do anything fancy. I do have a separate file folder for each one that includes a copy of each month’s check, so I have their payment history, as well as all the original paperwork that I got related to the property. It also helps when the tenant/buyer goes to get financed. Most lenders will want to see proof of their payment history. I also keep all my sellers’ and tenant/buyers’ names, addresses, and phone numbers on a PalmPilot that I keep handy.
I’ll have to e-mail you the FAQ sheet later on tonight. I’m away from the computer that has it.
motivation - Posted by Matt B
Posted by Matt B on March 28, 2000 at 14:04:49:
My rate of convincing sellers to do this depends on if you mean the ones who call me, or the ones that I actually end up going to see their houses. I have a lot of sellers calling me that aren’t motivated enough to do anything creative.
Here’s an example- Last night, I returned calls to 4 sellers that had left me voicemails expressing interest in my buying their house. One of them told me that his house had appraised for $140,000, but he wanted $144,500 because it had a shed! (OK, I’ll be right over! Please don’t sell it until I get to look at it! Can I give you a credit card number to hold it for me?) I spent VERY little time on the phone with this guy. (I think 2 minutes.) As a quick test to see if he was just uneducated (I didn’t want to say stupid) or was truly inflexible, I asked if he would be interested in constructing some terms or working out a deal where I would take over his payments. He said no, he just wanted the cash so he could get another house.
Then my next call was to a woman who was moving to Atlanta. (I am in Pennsylvania.) She gave me a price that she thought the house would appraise for, but said it was negotiable. I asked some more questions-monthly payment, how much was owed, etc. She even went to go get her payment book so that she could give me the exact amount that she pays each month. It sounded like a good lease option candidate, so I asked her if she would be willing to have me take over her payments until the house sold, and then went on to explain how I would do a lease option. As I paused to take a breath to complete my description of the lease option, she said, “Oh, sure. That’s fine.” It caught me a bit off guard, actually.
Now the second phone call is an almost guaranteed deal. I won’t waste my time any more on people who are sure that they can get an all cash, full retail (or more!) sale. They aren’t going to want to listen to what I have to offer. It’s a waste of their time and mine to even go look, or spend more than 2 minutes on the phone with them.
My ratio of closed deals has risen tremendously since I’ve adopted this practice. That’s because I don’t waste my valuable time on people who clearly express to me that they are unwilling to do anything that I would offer.
I have another motivated seller story from my calls last night. I was talking to a guy that was selling his house for $203,000. I was asking questions and listening for motivation. Then I shut up and let him talk. He said that he realized that I was an investor and I needed to make a profit on the house. He said that he since he was selling it himself, he would drop 6% of the purchase price if I bought it. (By the way, $203,000 is the current appraised value of the house.) Is it my imagination, or did this guy just drop his price by $12,180 without me even asking? Does that sound like motivation to anyone else? There were other clues to his motivation, such as he and his wife had already picked out their new home in another town. I am probably going to pitch a straight option on this one, since he did say that he needed the cash to buy his new place. However, he only owes $46,000 on the house, which leaves a lot of room to negotiate down further.
To answer your last question, The sellers that I talked to last night called me because of a letter that I sent them. I gathered the phone numbers from the houses for rent and for sale ads in the Sunday paper, did a reverse search for names and addresses, and mailed them out a 2 page letter expressing interest in buying their home.
Re: Frquently Asked Questions sheet for sellers on lease options - Posted by NB (ID)
Posted by NB (ID) on March 28, 2000 at 17:17:46:
Send me the same please–Angels on your body:)
Also try “www.theultimates.com”(nt) - Posted by lyal
Posted by lyal on March 29, 2000 at 13:12:54:
nt
Re: motivation - Posted by Phillip
Posted by Phillip on March 28, 2000 at 16:55:14:
What is meant by the term “straight option” as compared to a “lease option”?
Re: motivation - Posted by Scott
Posted by Scott on March 28, 2000 at 14:50:26:
Matt,
Great post with a lot of excellent info. Just wondering if you might share the text of your initial letter that you use. It sounds like you’ve done these lease option deals for quite some time, as someone just getting started in this particular area it’s greatly appreciated that you not only offer some good information, but some real positive motivation as well. Thanks again.
Re: motivation - Posted by Jim IL
Posted by Jim IL on March 28, 2000 at 17:19:10:
Phillip,
The difference between a “Straight option” and a “Lease Option”, is the LEASE part.
With a L/O, the T/B’er, (you) are occupying the home, and paying rent, with an otpion to buy the home at a predetermined price.
With an option, you simply have a predetermined price, but no rent to pay, and you usually will not occupy the house.
Hope that helps,
Jim IL
Re: motivation - Posted by Matt B
Posted by Matt B on March 28, 2000 at 15:05:27:
The letter that I use is the one that comes with Ron LeGrand’s lease option course. It is two pages long and I don’t know if I could legally post it here since it is from his course. Check your e-mail later on, though.
Good luck with your lease option business. I love lease options.
Re: motivation - Posted by GaryC
Posted by GaryC on March 28, 2000 at 18:15:22:
Matt: I’ve bought Legrand’s course and it’s excellent. Just started placing ads in the locally mailed Pennysaver ads to kickstart my cash-flow business. Couple of follow-up questions for you: 1) Are the sources for your motivated sellers straight from ads in the local newspapers or some other marketing source? 2) Are you in a hot real estate market (i.e., does L/O work in a fast appreciating area)? and 3) what’s your percentage of L/O versus ‘subject to’ deals?