Real estate agent etiquette question

[Christopher Meyer]

So I have completed one flip and did so without a realtor I purchased, marketed, and sold the house on my own. But after doing this I realized that using a realtor was going to be much easier. I went through 5 before I found the one I liked and she is successful and awesome. She has been sending me properties and showing my potential places for over a month teaching me soo much along the way. The problem is the other day I saw a FSBO close to home so I just stopped in. The place was a phenomenal deal and I made a cash offer and they accepted. I'm not sure how to tell my realtor and what I should say. I want to work with her for years to come and I also do t want all her hard work to go to waste. What do I do??!? Thank you

[Bryan Scott]

Personally, I like Lease Options, but if you've not done one of these yet, let me leave you with a few items to consider for your first:

1. Assuming no agents are involved on either side, require that your tenant buyer obtain a new market appraisal to help them establish value so they go into the transaction with eyes wide open.  It's important that they hire and pay the appraiser for this - not you.

2. Keep the lease separate from the option agreement.  This is pretty standard.

3. Require the tenant buyer to sit down with a mortgage broker to advise them what will be required to qualify for the mortgage/loan they need to perfect their rights detailed in the option agreement.  This way, a qualified 3rd party helps them (and you) meet the requirements of the Dodd-Frank Act.

4. Source and use an intermediary to close your Lease Option deal, place original docs into "escrow", enforce the terms of the deal, collect and disburse funds.  This is the sort of "arms-length" needed to insulate you in case of issues down the road.  This can be an attorney, or any company in business for the purpose of servicing private money transactions.

5. Require your TB to have a professional perform a thorough home inspection, including roof, HVAC, plumbing and electrical.  As with the appraiser, they need to source the inspectors and pay for these inspections.  As with the appraisal, this step is for their own protection (and yours) so they can't complain later that you sold them a "pig in a poke."

The above will make such a transaction safe for both yourself and your TB.

Good luck with it.