There are a number of creative techniques used to purchase homes in today’s market. The fast change from a sellers market to a buyers market
has led buyers and their realtors to use different approaches when
writing offers on homes. Taken into consideration are the needs of
both buyers and sellers especially when it comes to closing dates and
Among the many creative techniques used are Lease-Purchase,
Lease with Option to Buy and Rent to Own. At Neighborhood Realty
we believe that using the Lease-Purchase benefits both buyers and
sellers far better than the other methods. The program we’ve used
over the years has had many positive results.
For the buyer who may have credit issues the Lease-Purchase provides
time to correct any adverse credit while allowing them to occupy and purchase the home in a timely manner. If structured properly the
contract can provide money toward closing costs and down payment.
Lease-Purchase is not an option, it is a contract between sellers and
buyers to purchase a home.
For the seller, using the Lease-Purchase method will attract more
buyers and increase their chances of selling their home. In a buyers
market, where competion is greatly increased the sellers may elect
to rent their home after attempts to sell have failed.
Most agreements have a closing date of one year after
signing. Although in many cases the closing may occur in less
time when both parties are ready.
When structuring the agreement the seller is still protected by an
acceptable rent deposit that will also be used toward the down payment
at the closing. A rental agreement would be signed with an agreed upon amount of rent to be paid monthly.
A portion of this rent would be used toward the buyers closing costs.
If the buyer fails to close on the date on the contract, the seller would
retain all portions of the rent unless other agreements are made.
There may be other agreements added to the contract to benefit both
sellers and buyers.
A great benefit to the seller is that the buyer/tenant is encouraged to
pay the rent on time monthly. This is very important in their effort to establish better credit. Therefore the buyer/tenant becomes the ideal tenant
where as they will respect and treat the property as if their own.