One of the options available to sellers who can't sell their home but have the time to wait for the market to correct itself is a lease with option to buy. This is a great way to let a cash strapped buyer get into a home with little money down and provide the seller with a positive cash flow in the meantime.
A lease with option to buy is a legal agreement between the seller and the prospective buyer. This document is executed before the prospective buyer takes possesion of the property and the following terms are clearly stipulated:
- the sales price the tenant will pay for the property at the end of the lease term
- the lease term period--anywhere between 12 and 18 months
- the amount of the non-refundable fee charged to the buyer for agreing to this option--this fee could be used as part of the downpayment
- the monthly lease payment--usually higher than market value
- set an interest rate ceiling in the agreement
No comments:
Post a Comment