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New Jersey | Lease Options

By
Real Estate Agent with BMC Capital

I attended an interesting real estate investment seminar yesterday.  The speaker was discussing Lease Options and Subject To's, and mentioned that these are two ways to sell your home in a slow market.  I have been involved in some of these types of transactions, but to be honest, I probably haven't brought the idea up to enough of my Seller clients.

I don't think that I would ever recommend a Subject To, because it would subject my seller to undue risk, but I am planning to start discussing lease optioning my listings when it is in my clients best interest.  For those of you who are not familiar with this type of transaction, a lease option is when a prospective buyer agrees to lease the property for a given period of time and in conjunction with the lease buys an option on the property at a specified price, which the buyer can exercise at some point in the future.  This is a great way to get access to potential buyers who don't currently qualify for a mortgage, but should be able to in the foreseeable future.

I thought that this was a creative idea, because currently there are  a lot of would-be homebuyers that can't qualify for a mortgage in the current credit environment.  There is always the risk that the buyer/tenant never closes on the property.  To avoid this problem, a lease purchase may be more appropriate, but as always, I believe that the individual situations will dictate the most appropriate solution.  This is why it is always best to consult with your local real estate professional, as well as legal counsel, prior to any transaction.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

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