Question: I have a lease option question regarding commission and duties of the agent writing the offer, and then a year later for closing the sale. I have never done a lease option before. Also, who pays the taxes and when?
Answer: You are under the same obligation of duties to the Buyer as in a normal purchase contract: As agents for the Buyer, the Buyer’s Agent and Broker have fiduciary duties to the Buyer that include loyalty, obedience, full disclosure, confidentiality, reasonable care, and any other duties required by law. Under the Lease Option form #31. Sections 1 through 4 are the Lease Terms. Section 5 through 24 relate to the Purchase agreement. Form #32 can be used for any additional terms, and form #33 is to give Notice to Seller the Buyer is ready to move forward with purchase. Section 24c of the Lease purchase agreement is the Notice of Intent deadline. As far as commissions go, typically you would have to wait until the property closes to receive the full commission. However you can try to negotiate a partial commission with the Seller up front for the Option agreement, then the balance upon closing of the property. Taxes are addressed in Section 7.2 and usually prorated at closing. Also keep in mind that if there is a loan involved, because of RESPA rules, a Seller cannot lease back for more than 60 days, unless Buyer is obtaining an “Investment” loan. See UAR form #50.