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Lease Options Explained -
In our previous post we started discussing lease options or rent to own programs.
There are benefits for both buyers and sellers: The buyer gets a house at a pre-
If you need help in understanding the lease option, then contact us today! We can’t wait to hear from you.
In this post we briefly touched a few nuances with lease options. Well, we will address more issues/opportunities in the next couple of blog postings. Stay tuned to find out more!
Some sellers resort to lease options when they can’t sell their homes using traditional real estate methods. Some sellers use the lease option to develop a positive cash flow, while essentially deferring the sale for varying reasons. Lease options allow the homeowners to keep income coming in from rent as well as providing certain tax advantages.
Typically, the lease option is set for fulfillment two or three years from the time of establishment, which allows enough time for the buyers to qualify for financing. Lease options are commonly used options for buyers who want to own a home, but don’t qualify through conventional financing avenues. This time frame provides the buyers time to build their credit rating by demonstrating on-
If the buyer doesn’t exercise the option to buy, they don’t get a refund on their down payment. That income goes to the seller (property owner). The down payment is typically 3 to 5 percent of the set purchase price, although prices can vary. The buyer also does not get a refund of their payments.
Obviously there are a lot more details, pitfall, and even advantages of using a lease option for both the buyer and seller. We want to help you take the mystery out of the transaction so that you feel confident in your decision to move ahead. We encourage you to research on your own.