Lease-Option Sale Beats No Sale at All :

For sellers, builders, and real estate professionals, a lease-option sale is usually better than no sale, and can work for properties in all price ranges. Lease-options can work especially well in markets with an oversupply of homes or condos for sale.

A lease-option is similar to a new-car lease, in that the renter has the choice of buying the property or not by the end of the lease term. Unlike a lease-purchase, which requires the tenant to buy the property within a year or two, a lease-option doesn't force the tenant to buy.

For both the tenant and the owner, the amount of the monthly rent credit toward the tenant-buyer's down payment is the key to a successful lease-option.

Here's a summary of other lease-option perks:

• Upfront option money is smaller than typical home-purchase closing costs.
• The rent credit outweighs lack of mortgage interest and property tax deductions.
• The buyer can "try on" the house or condo before buying.
• The option purchase price is locked in for the lease term.
• The buyer can move in within a few days after signing the lease-option.

Lease-to-own agreements can help sell a hard-to-sell property during a sluggish housing market. Here’s how they work:

• A seller agrees to rent a property to an interested buyer for a set period of time, usually one to three years. At the end of the lease, the buyer has the option to purchase the home at a preset price.

• A portion of the monthly rent paid during the lease is usually counted toward the down payment. To cover that, the seller charges a rent increment or monthly premium of $200 to $300 compared to comparable rentals.

• Many owners also charge an option fee for taking the property off the market, usually 1 percent to 2 percent of the sale price. This may be applied toward the purchase.

• Sellers have no guarantee that renters will buy at the end of the term, but if they don’t, they keep the option fee and the amount of the rent that would have gone toward the down payment.

Any Questions... Please Call the Roland Lorans TEAM

Roland Lorans Metro Brokers GMAC Real Estate 2725 Hamilton Mill Road, Suite 2400 Buford, GA  30519 Office: (404) 843.2500 Business: (678) 406.8451 Fax: (678) 765.5050 Email: Roland.Lorans@Metrobrokers.com

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