A lease purchase contract is a little different then a lease with option to purchase contract. Read below to know the difference between the two.
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A lease purchase contract is a little different then a lease with option to purchase contract. See below for the differences.
Lease with Option to Purchase is a form of real estate transaction which combines a traditional rental agreement with an exclusive option of right of first refusal to later purchase the home. The price of the home is explained in the contract and the tenant/buyer has a certain amount of time to utilize this option. The tenant/buyer pays the landlord/seller a non-refundable option deposit that is applied to the purchase price of the home at closing. It is a fee paid to the seller to reserve the buyer’s exclusive right of purchase. In the event the tenant/buyer does not choose to purchase the home and utilize the option the option money would be retained by the landlord/seller and it is non- refundable to the tenant/buyer.
Lease Purchase Contract is a lease combined with a contract for sale where the price is negotiated and the closing date is specified as the same date the lease ends. The contract for sale is still contingent on the buyer/tenant obtaining their financing, and they still have the right to an inspection (just as any sale contract might spell out). The tenant/buyer then pays a sum that is equal to the monthly rental amount, plus a security deposit, plus earnest money for the sale end. Sometimes it is negotiated that a portion of the monthly rent will be applied to the purchase price of the home at the end. All aspects of the contract and lease can be negotiated before it is finalized.
These contracts are commonly used where a buyer wants to purchase a home, but due to credit issues would not qualify for a loan yet. Other times a buyer would do one of these contracts in order to save money for a down payment and closing costs.
Our agents can help the tenant/buyer find the lease purchase property and write up the contract and go over it extensively. (Apply Here)
Our agents can market your home as a lease purchase property and give you the peace of mind with our expertise on the contract phase.