Short Sales and Foreclosures | Lease To Own Terms

When I’m asked the question about the terms for my Lease to Own listing, I mention first that I’m flexible.  What I’d like to do is sit down with a realtor.   I’d take the  total on my first and second mortgages.  (I’ve put cash into the property as well).  I understand that this is a down market, and I am not attempting to recoup my cash investment.  I would like to pay off my mortgages with no cash to me, a minor commission to the agent, and fees to the title/escrow company.  My current monthly payments including taxes and insurance are (XYZ) per month.  I am offering the lease option at (XYZ) a month to give the prospective buyer the option to put (ABC) toward the “rent”, and (To Be Determined) per month into escrow, to build a down payment.  At the end of a year, if the buyer wants to buy the property at the pre arranged price, (Pay off ABC in mortgages and the small items I mentioned) then they could exercise the right to purchase the house at the pre arranged price.  And they’d have a nice down payment saved up in escrow.  If the buyer wants to end the contract, and move out of the house, or continue to live there as a straight rental, then escrow would be terminated, and the money the buyer put into escrow would be returned to the buyer (not me), minus any escrow company fees for the escrow.  (Guess $250. to title company.)  So no risk to the buyer other than a small fee to the escrow company to set things up.  If the market continues to decline, don’t exercise the option to buy.  If things level off or rise, buy the house lower than market.  The lease option is a good thing in times like this, when the whims of the real estate market are unknown.  This is a win/win for the prospective buyer, get to live in the house to see if it’s a good fit, good for the seller, a solid tenant paying rent to cover some of the expenses. 

 

Of course, with any Real Estate contract the state your property is located in will dictate the laws of the t.ransaction.  Working with a licensed Real Estate Agent is money well spent, also consider the option of working with an attorney that works with Real Estate.  The purpose of this Lease to Own blog is to begin the dialogue about the option to Lease to Own Real Estate during fluctuating Real Estate Markets

 

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