How to Buy a House Using a Lease Option
Often, the hardest part about purchasing a house is acquiring financing. This can be especially stressful if you've found your dream home. Before throwing in the towel, consider negotiating to buy using a lease option. You immediately move into the home while working on financing and the seller gets to collect rent and avoid the stress of having their house on the market.
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Instructions
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Prepare to pay a little more in rent then the lease is normally worth. The seller is removing the house from the market so they're typically going to want more for the property then they would normally command in a regular lease situation.
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Work closely with a trustworthy realtor or a real estate attorney that's representing your interest. For a lease purchase it's very important to work with a professional that can offer you guidance and advice as this type of contract is often very detailed.
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Negotiate the terms of both the lease contract and the home purchase contract including the purchase price of the home. Be sure you're very clear on what you're signing before you commit. This is a binding contract and once signed the terms are non-negotiable.
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Draw up a lease purchase addendum with your attorney or authorized real estate agent. Typically you'll sign a lease and a purchase contract so the lease purchase addendum binds the two together and sets out how one will relate to the other.
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Adhere to the terms of your contact and as the time nears for the expiration of the lease aggressively work on acquiring your financing.
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Tips & Warnings
These are only general guidelines. Laws and procedures may vary according to your location. Be sure to check with a licensed realtor or real estate attorney in your area.
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Comments
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leasingtobuy
Jul 08, 2009
Most Realtors don't actually understand LO's, as they don't teach LO's in real estate training. If you want to buy a house using a LO, you'll want to establish 5 things with the owner. Price (Option Price) down payment (Option Fee) Rent and rent credit (amount of rent applied to purchase..shows as a seller concession) Typically 20% of rent is average, but it obviously varies. Also realize that if you default on the payments you will forfeit any monies paid if you are evicted. HAve a plan of action to purchase. First check your credit with a mortage lender and get a copy of it. Ask the lender where you stand, and what needs to be fixed. You have to have a plan for finance.
