Using a lease with option or the vendor leaving some money in the deal for a while has long been proclaimed by its advocates as a method of quickly selling your home at full market value. So let’s take a look at the pro’s & con’s of both methods, assuming others sales factors being equal like the quick house tart up was done & the coffee was put on to brew for all home inspections.

The traditional real estate sale goes something like this: You shop for an agent & usually select the one who promises you the best achievable price.

He ties you up on an exclusive sales contract & you are now locked into 90 days of sale price degradation conditioning. Your $500k house is put on the market at $550k...after 6 weeks its back to $500k...& by the 12 week with your spirits in tatters you will listen to the market talking to you at $480k.

The purchaser fluffs around trying to get their bank finance approved you have got a lawyer involved & if lucky 2 weeks later the contract exchanges, you wait another 10 days or so to see if purchaser cools off then 42 days later you are supposed to have the hot cash in your hand, but no the bank hasn’t completed its paperwork yet so it’s another 14 days waiting, wandering, wondering will I see my cash. Usually at this stage you walk away with your cash, albeit less than $470k to feed into the next property.

The Non-Traditional Sale goes something like this: You get a professional appraisal so you know your house is worth $500k. You set a price at $525k.[About 5% above valuation]

You now need to get some marketing done.You can do it yourself or you can pay a specialist marketing company a few thousand up front or about 3 X’s a few thousand[about equivalent to an agents commission] on result. Your choice.

Essentially marketing needs to consist of a house sign, a web presence,& other reaches into the face of potential customers. The sort of stuff that a real estate agent would do except maybe the color local rags. Specialty marketer s may use other methods to advantage.

Now for the big difference; the purchaser who now has magically multiplied by a factor of 5 as this house is suddenly within reach of 10 x’s as many people. [How many people do you think have $20k for a deposit as opposed to $100k]. Now knowing that “Houses for Sale” by Traditional methods out number Non-Traditional “House for Sale” by a factor of 1000 to 1 then putting these two factors together of 5:1 and 1000:1 it is easy to see that there is a heap more competition for that house so that the asking price of $525k is quickly & easily achieved.

The Next big difference; the purchaser needs to move in within 7 days at his rental lease is expiring & you sure as hell want to get away for a holiday so you pull out a bit of paper work give him a 6 month option for $20K & attach a lease for $900/wk [the $900 will more than cover your mortgage repayments the 20k will pay for your holiday]

As the Vendor you are leaving 20% in the deal for 2 years so it is a walk in the park for the purchaser to get an 80% low doc & the weekly rent is a big incentive for him to finance & settle quick.

Ok so what’s the scrub on the wash up?

Traditional Sale + got hard cash in hand of less than $470k

- Less cash then market value , had to wait up to 6 mths

Non-Traditional Sale + quick sale $20k cash in hand 7 days

+ $420k hard cash in hand in 3 months + $85k equity in property

- Wait 24 months to receive final $85k

Depending on your personal situation with your finances you can decide whether to use a traditional sale approach or a non-traditional one. Particularly if you want a fast house sell.