ven though this lease, buyers can choose to buy
arrangement is often the property. This is called
tailored for a buyer-seller closing.
type, the lease with option to
buy or renting to own all work Timing is everything when it
about the same. How it works is comes to home financing. “Market
the renter agrees to lease the conditions are a critical factor
home for a pre-determined time in finding a lease-option,” said
usually from one to three years. Oscar Munguia, real estate broker
There may be an up-front and president of Consolidated
consideration fee. The seller Financial Group in Simi Valley,
allows the buyer to lock in a Calif.
monthly price for the property
till it is paid off. This type of agreement works well
with those who are new to the
The buyer needs to decide if they housing market or have made a job
are going to say in the area transition. It also is positive
since leasing does cost more than for anyone who needs to
just renting. It’s a good idea to strengthen their credit or pay
know that this property is the off a home over time.
one desired before entering the
lease-option agreement. It’s also advisable to get the
property inspected before buying
Buyers will need to pay an option it. Have an independent
fee which is the upfront professional home inspector
consideration fee that makes the inspect it to find any potential
contract binding. Once they problems the home may have to
understand all they need to, they make sure these will not be an
will need to pay it and sign the obstacle to a loan. Also, be
contract. At the end of the clear on who is responsible who
the repairs as well. the seller, they had $20,000 of
equity just 12 months later,
Chris and Sarah Kane of Visalia, leaving their down-payment
Calif. Bought their first home covered.
with the lease-option plan. “We
found a home we really liked for “Lease-options typically favor
$221,000 and figured we would the buyer, but they can be
just have to rent it,” said Chris complicated and dangerous to
Kane. “But as we thought more those unfamiliar with them,”
about it, we knew we didn’t want Munguia warned. “For this reason,
to spend over $2000 a month on a they should seek counsel from a
home with nothing to show for broker, and also have a real
it.” estate attorney inspect the
contract to ensure their
They decided to apply the rent to financial protection and
the purchase of the home and security.”
after they had an agreement with
About the Author:
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit Poway Homes for Sale
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J Harris
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