A lease with option to buy allows a renter to purchase a home after at least 12 months or more of timely payments made through a checking account to the seller.  A buyer usually enters a lease with option to buy with a small down payment and a negotiated purchase price of the home upon the maturity of the lease contract.  Sometimes the seller will also credit a monthly portion towards building equity within the home. The bank will treat this as a purchase with prior credits for down payment. It is a win win scenario.

Buyer Benefits:

  • allows monthly buildup of equity
  • allows the buyer time to repair credit for bank financing
  • allows the buyer to find another home without purchasing if they exit pior to contract maturity
  • allows the buyer to try out the home prior to purchasing

Seller Benefits:

  • home is sold faster during a slow market
  • the home is usually sold at a higher price than a normal transaction
  • upfront cash to seller
  • the buyer will have greater interest in upkeep compared to a renter
  • option from buyer can pay Realtor's commission upfront

 

P.S.  A buyer should always have their credit reviewed with a bank prior to entering into a lease with option to buy in order to repair any credit issues prior to obtaining financing upon contract maturity.

 
This post has been included in Illinois Real Estate News Whiteside County, IL Real Estate News
Post is included in group: Mortgages

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Anthony Bollman

Sterling, IL

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Source 1 Mortgage

Address: 1204 Harmon Rd, Harmon, IL, 61042

Office Phone: (815) 535-1076

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Mortgage Financing in Northern Illinois


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