Option - FSBO/Owners Sign In Yard
Has anyone had experience on a non exclusive option (not lease option) when for example:
You have an option on it - someone calls you from an ad - you tell them to drive by and look at the house to see if they are further interested. When they drive by, they (the potential buyer) see the owners FSBO sign in the yard. they then just call the owner and not you. they may not even realize they have cut you out.
How can this be avoided?
And, what do you tell your potential buyer when they ask if you are the owner? Any suggestions would be appreciated.
Don't tell them to drive by; prequalify all Buyers on the phone, and then meet them at the house. Ignore the FSBO sign, and the Buyers will assume it's your sign and just another of your phone numbers. But if it's listed with a real estate agent after signing the nonexclusive with you, do not ignore the sign; instead, directly point at the sign and say, "If you call the number on that sign, you just paid 6 percent MORE for this house." This is not at all unethical. This is your Buyer, and the agent is not entitled to a commission. Presumably, you (and your assigns) would have been excluded from the listing agreement, but if not, you should still be okay, since your Option with the Seller would predate the listing agreement. You should always have a CYA agreement that your Buyer will sign informing them that you are not the Owner. If they question that, simply say: "I have an agreement with the Owner." They generally don't question any further. You should not get asked that question just out-of-the-blue, but they might want further clarification once they read your CYA. If you say you own it, you have just committed fraud. In some cases (if challenged in court), you have arguably committed fraud by simply saying nothing, because if you are selling something, it can be reasonably inferred that you do own it. So, you need to specifically disclose that you are not the Owner. You should also disclose that you do not represent the Owner, that your intention is to make a profit, that the Offer is contingent upon passing clear Title from Owner to Buyer, and that you can back out in X number of days (around three), in case the Seller has found a Buyer and has already put it under Contract. Hope this has helped.
Thanks for the reply LeaseOptionKing. Sounds good. The only thing is that from what I have been taught it can be a real waste of time meeting every potential tenant/buyer at the property. I have been advised to have them drive by the property, and call me if they are seriously interested. That way I am not wasting time on tire kickers.
I guess as you suggested - I could say "I have an agreement with the owner" , is prety good, however, it seems like they may not understand and may try to contact the owner directly.
I guess there is not a whole lot more that you can do in this instance. Thanks.
Sounds good. Thanks LeaseOptionKing!