Do you want to buy a home but aren’t quite ready? If so, you may want to consider lease to own agreement to purchase a property! Below we get into some great info on what lease to own agreement is. Check it out and then bring your questions!
Using a lease to own is an excellent solution for would-be buyers, particularly If your credit isn’t quite where it needs to be or your bank account is sadly short of the necessary down payment for a traditional purchase. A lease option, or rent to own structure, will allow you to lease a home, with the option to buy or walk away after the lease term is up and could very well lead to that forever home.
How It Works
The lease to own agreement can look very similar to a rental agreement. That said, there are some key differences to be mindful of, such as your responsibility to make repairs and maintain the property as if you were already the owner, as well as paying a higher than average rent payment.
What You Will Have To Do
You will always want to have a thorough inspection of the house done before signing the agreement. This will give you a heads up on any future repairs you will need to make. Some repairs can wind up being very expensive and you may not be comfortable taking on a property with such large issues. In addition to your inspection, you should also have a professional appraisal of the house done. This will ensure that the price the seller is asking is fair, and will be approved by a lender in the future. You never want to skip an inspection or an appraisal just to get a shot at buying a home.
Also, as mentioned above, you will be the one responsible for repairs as opposed to the owner of the home. You will also need to pay the property taxes according to some agreements. These extra expenses, plus the typically higher than average rent, can slow you down if you are saving to buy the property in the future. Keep these costs in mind before signing an agreement and make sure you are planning in the longer term.
There are several benefits to entering into a lease to own agreement with a local seller. First of all, you will be able to find and secure a house before you have the down payment together or before your credit will qualify for a loan. These are both things that should be taken care of during the leasing period of your agreement. You will also have a locked-in price, so if the market goes up over the course of the agreement, you will only need to pay what was agreed upon originally. Just watch the market beforehand. You don’t want to enter into an agreement in an area where homes are actually decreasing in value.
Another great benefit is having the ability to “test drive” the house. You can really get a sense of what it will be like to own, before actually being the owner. You can determine your monthly maintenance and ownership expenses, and take a good look at commute times and area schools. You will be able to make sure that the neighborhood is really right for you, eliminating any chance of buyer’s remorse once the sale date arrives.
Additionally, You will have the peace of mind in knowing that you have the guaranteed option to buy the house. You won’t need to pick up and move at the end of the lease term so long as you are able to get the financing you need, as well as the down payment. By this time, your credit should be restored, allowing the buying process to run smoothly for you.
How to find a property to lease to own
You can search Zillow, Trulia, or Realtor.com for various lease option properties that are listed as “for sale by owner” and in particular focus on those that have been listed for longer than 90 days. These owners are oftentimes more open to doing a rent to own agreement. They will not need to lower their price, and you will get the opportunity to buy a house you love.
Find a rental property and ask if the owner would be willing to sell the property to you after a few years.
Check out our available lease option properties and some additional information to get your own home!