Sellers Should Know About A "Lease - Purchase Agreement" To Help Them Sell Their Home, Condo, or Townhouse

(Not an option to purchase this is a sale that can be a win/win)

Before entering into a Lease – Purchase Contract Agreement the Seller should already know what the dollar amount for the monthly payment of the Lease portion needs to be to cover required costs if that is a factor. A large portion or all of the monthly payment will become part of the Buyers down payment and that portion is not rental income. 

The Contract Agreement should include a statement that no dollars paid to the Seller by the Buyer are refundable after ____ days. (Usually 30 days which allows the Buyer time to have had a Home Inspection and possibly   cancel the entire Lease – Purchase according to the terms in the Contract Agreement).

To put it simply a Lease – Purchase can be done as follows:

       Buyer gives Seller a large down payment (minimum $5,000 for every $150,000 property value).  The down payment goes directly to the Seller and is not held in escrow.

Each month the Buyer makes a payment directly to the Seller and all or a large portion also becomes part of the down payment.   

       The Lease term is negotiable but normally one year and that date becomes the Closing Date on the Purchase portion of the Contract Agreement.  The Contract Agreement should state and the Buyer should understand that they have to have their financing (mortgage) approved and ready to close on or before the Closing Date.  If the property does not close on or before the Closing Date the Seller can cancel the purchase, keep all down payment monies, and do what they want with their property.

NOTE TO REALTORS:  The day the Contract Agreement is signed by all parties it is a SALE with a closing date set.  (Think of it like a new or pre-construction.) A Lease – Purchase can be offered under Terms of Sale in the real estate listing information entered into the realtors Multiple Listing Service MLS data along with other forms of acceptable payment.  Many national real estate companies or real estate attorneys in your State already have Lease – Purchase Sales Agreements prepared according to the laws in your area.   

The Grand Strand

Prior to moving to Myrtle Beach from Maryland we spent many of our vacations in the area.  Hidden in my memory was our being told that "The Grand Strand" was a 60 mile coastal area that begins in North Carolina south into South Carolina with Myrtle Beach as the hub or middle. 

I had begun to doubt my memory since we had moved permanently to this area because I have heard long-time residents refer to The Grand Strand in different lengths and areas.  A few days ago I noticed in the first line of a blog the words  ".... "The Grand Strand Area" (aptly named for its 26 miles of Beach)."   It caught my eye since the  shortest length I had  heard  previously was 40 miles.  I did a  Google and Wikipedia  gave me  the answer:  The Grand Strand is 60+ miles from Calabash, North Carolina south to Georgetown, South Carolina.

Myrtle Beach on HGTV

Myrtle Beach, South Carolina was featured on House Hunters.      Last night, Episode HNT-2509, on HGTV's show talked about housing prices that are the lowest on the east coast.  Since I'm a realtor who has been watching HGTV for about five years it was exciting to hear the area get recognized but I also realized that now the world had found out what some of us already knew.

Housing Market, Economy, and the Media

Does anyone else believe that the Media has caused many of the problems with today's economy? Mortgage Lenders made the snow ball, placed it at the top of the mountain, and gave it a hard push. The Media then jumped on that snow ball turning it into an avalanche.

I am a Realtor who has had no shortage of prospective Buyers, but each time when they began to make a purchase, they would read or hear something that scared them to say, "I better wait". Am I wrong to think that if those Buyers were not waiting but made those purchases that the Economy would not be under the avalanche?

Now the Mortgage Lenders are making things worse by their requirements to process a loan. The Buyers who use their common sense and want to make a purchase are faced with Underwriters requirements that border on ridiculous. Lenders definitely needed to return to the pre-housing-boom requirements, but many have gone too far. One example is, the Buyer paying for an appraisal which is normal, but paying for an additional Appraisal Review done by the Lender's Underwriter is not. If the property is covered by a Home Owner's Association (HOA) or Property Owner's Association (POA), lookout, the Underwriter may want a copy of every single page of every single document that has ever been prepared by that association. Added to everything else, the loan packages will probably not be completed by the Underwriters for the scheduled day of closing/settlement and that usually means the Buyer's locked-in mortgage interest rate expires.