Lease To Own - Useful Information!
Lease to own or Rent-to-own is a good option in the present day financial crisis when many people have either bad credit scored or less money to buy a house.
It is an agreement between the seller and the buyer wherein they lock a pre-fixed price for the property to be paid by the buyer later.
Though this time can be any duration, generally it is less than 3 years.
The buyer pays rent till that time but with some premium which goes towards accumulating money for down payment.
This helps the buyer to buy the property in the future at current prices and also save money for the down payment.
It is a win-win situation for both the parties as even if the buyer does not buy the property after the decided period of time, he is not eligible to get back any money paid as rent or rent premium.
The buyer is not obliged to buy the property and can chose to walk away.
But the seller is obligated to not sell the property to anyone else during the decided tenure.
This safeguards the interest of the buyer.
The buyer can also sell the option to somebody else if he/she wants to.
The future price of the property is determined on a mutual consensus of both the parties.
It is advisable to study the recent and present trend of the real estate market while determining the price.
You can also take help of a realtor or a professional who will be able to help you in this direction.
The buyer should make sure to get thorough inspection done of the house as would be done while buying a house in a regular sale.
Also, the buyer should get the title checked by a title company to make sure that the property he/she intends to buy later is clean and has no pending dues to be paid.
Other inspections like pest inspection, roof certificate, home warranty etc should be checked and secured.
Make sure that it is fully understood and clear as to who would pay for inspections, work and warranties etc.
This will ensure a smooth transaction at all times.
It is highly recommended to open an escrow to handle the transaction.
An Escrow is a third party which handles all the transactions till both the parties fulfill all their responsibilities.
This helps in safeguarding the interests of both the buyer and the seller.
It is also advisable that the buyer should take advice from a real estate lawyer before entering into an agreement with the seller.
Also, make sure that the lease to own option is written down for future reference and all the terms and conditions are thoroughly understood by both the parties.
You will be required to fill a lease-option agreement form which you can get from your local Board of realtors or Real Estate Company.
It is an agreement between the seller and the buyer wherein they lock a pre-fixed price for the property to be paid by the buyer later.
Though this time can be any duration, generally it is less than 3 years.
The buyer pays rent till that time but with some premium which goes towards accumulating money for down payment.
This helps the buyer to buy the property in the future at current prices and also save money for the down payment.
It is a win-win situation for both the parties as even if the buyer does not buy the property after the decided period of time, he is not eligible to get back any money paid as rent or rent premium.
The buyer is not obliged to buy the property and can chose to walk away.
But the seller is obligated to not sell the property to anyone else during the decided tenure.
This safeguards the interest of the buyer.
The buyer can also sell the option to somebody else if he/she wants to.
The future price of the property is determined on a mutual consensus of both the parties.
It is advisable to study the recent and present trend of the real estate market while determining the price.
You can also take help of a realtor or a professional who will be able to help you in this direction.
The buyer should make sure to get thorough inspection done of the house as would be done while buying a house in a regular sale.
Also, the buyer should get the title checked by a title company to make sure that the property he/she intends to buy later is clean and has no pending dues to be paid.
Other inspections like pest inspection, roof certificate, home warranty etc should be checked and secured.
Make sure that it is fully understood and clear as to who would pay for inspections, work and warranties etc.
This will ensure a smooth transaction at all times.
It is highly recommended to open an escrow to handle the transaction.
An Escrow is a third party which handles all the transactions till both the parties fulfill all their responsibilities.
This helps in safeguarding the interests of both the buyer and the seller.
It is also advisable that the buyer should take advice from a real estate lawyer before entering into an agreement with the seller.
Also, make sure that the lease to own option is written down for future reference and all the terms and conditions are thoroughly understood by both the parties.
You will be required to fill a lease-option agreement form which you can get from your local Board of realtors or Real Estate Company.
