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I LOVE them, when it is my property being optioned.
However, if I am representing the buyer, I get paid up front, NOT at the option period.
This is a great opportuntiy to work without compensation.
Been there, done that.
Chevy Chase, MD
Hillary, we don't do them and we don't recommend them to clients...buyers or sellers. There is risk for both.
Lease purchase may work out 3% of the time. I just do not do them any longer. I have enough headaches!
In TX we are not allowed to write any lease to purchase terms in our standard contract. Therefore the buyer and seller would need to hire an attorney. Also our state property code puts many restriction on the seller in lease purchase transactions. So I guess my answer is in TX don't do it.
Good morning Hillary. I would never recommend it if someone has to sell or the market is the area is pretty hot, otherwise why not.
We do not see them often here in CA. This scenario is designed to part a renter/buyer with their money. I'd stay away.
Hillary - Lease Options are very common here, at least they were very common between 2009 and 2013. It was the only way many buyers with a lot of savings and good income, but bad credit, could purchase.
I have never done one, so all I can say is that it has been done a lot here. There are businesses that that is all they do.
yes, no, didn't close and was a nightmare for my seller. I'll never do it again.
My very first transaction in the business 35 years ago was one of these and it worked. I have never been afraid of them since and know what to watch out for.
No. This is not the kind of business I would encourage. Immediate commissions provide a higher level of satisfaction.
I have done several with out ever having a bad one. Qualifying the buyer right away is paramount and taking a deposit or Earnest money is a must. If the buyer can not close on the property in the time frame spelled out, the buyer loses the E-Money. This works good for sellers who do not want to sell now but would like a fairly certain closing date.
Options to buy are usually a joke. People with bad credit and little money that can't qualify for a mortgage are usually the people that look for these lease w option to buy scenarios. Most never buy. if the seller wants to sell, the tenants always have the option to buy if they can get the money. Any seller considering doing this should have the tenant meet with a lender to see what the chances are that the tenants can qualify for a mortgage before the end of the lease. If tenant is recovering from a foreclosure or short sale, they might be worth considering for a lease w option to buy. But the problem is, an option doesn't commit the tenant to buy. The tenant might find a better deal before end of lease. Someone called me the other day asking if they could put an option to buy on a lot I have listed. I asked him " what is an option to buy"? Turned out he just wanted to tie the property up to keep someone else from buying it.
Something like that in my opinion is better left to the company attorney.
Run. Far & fast. I don't like lease-purchase transactions because there are just so many opportunities for things to go wrong and for everyone to get burnt.
I would never put a tenant in a position to negate a possible sale by offering them an option. A lease purchase is the better choice and you know where you stand in the transaction at the onset. A large non-refundable deposit assures that.
I have not. Typically not a good deal for the buyer.