A lease option purchase is not a bad idea with the current market conditions. This type of Real Estate transaction has a little bit more paper work involved, but it may be worth the extra effort. Many clients have been inquiring about lease option purchases. This article goes over in great detail how they work, and how to execute a lease option purchase successfully.
Your first step is to contact a Realtor with experience in this type of transaction. Visit the link below to contact a Realtor that will be able to help you. If you obtain a Realtor that has never done a lease option before, you may not be getting proper representation. Interview your Realtor thoroughly before signing any type of employment agreement otherwise you will be stuck with that Realtor for an allotted period of time.
After you have found your experienced, educated Realtor your next step is to have your Realtor show you which homes are offering a lease option purchase in the areas of your choice. Your Realtor should be able to pull up several for you to choose from. After you narrow the search down to ten or so homes, you then will go view them in person with your Realtor.
Once you have found the home you would like to live in, your next step is to write a contract. Here comes the tricky part. A lease and a purchase contract is usually required for a lease option purchase. You execute a lease agreement along with a purchase contract. Once the lease contract has been executed, it may be a good idea to execute a purchase contract also. Be sure to make the close of escrow at the end of the term of the lease. Also be sure to put all of the terms and conditions in writing such as purchase price at the end of the term of the lease which may be the most important factor.
There are a few different reasons why a lease option purchase is so attractive. The most common reason is so that people can live in the home they plan on buying while cleaning up their credit to be able to qualify for the loan at the end of the term of the lease. The best reason is because you can lease the property you may or may not buy and wait to see if the house appreciates or depreciates. If you set the purchase price at the beginning of the lease option purchase, you have locked the price so there is no mistake about what the price is going to be at the end of the lease. If the market conditions have improved and the home appreciated you might want to exercise your right to purchase the home. If the market conditions are unfavorable then you might want to either renew the lease or find another property.
The name in itself explains it. A lease option purchase gives the tenant the option to purchase at the end of the term of the lease if they so desire. Be sure to contact an expert Real Estate agent when seeking such a complex transaction. It is very important that you have a Realtor that knows what they are doing so they can explain all of your options at the beginning of the transaction.