Thinking about selling your Kansas City house? Consider a lease to own agreement (lease option) to get the price you want! Learn more below!
Selling with lease to own can be a better selling strategy than selling traditionally for some people. When you sell through a lease option or “rent to own” agreement, you get the price that you want and have a little extra income until the house has officially sold. Below you will find answers to some of the most common questions we get about how to use a lease option to sell your house in Kansas City. This is our favorite way to buy and sell houses and we can help you quickly sell yours. If you have questions, set up a call with us and we will walk you through the process.
So, What Is A Lease Option?
A lease option will allow a “tenant-buyer” to lease the property for a specific term, with the option to buy at the end. The lease term, can vary, but is typically 1-5 years. During the lease term, the property remains in your name, but the tenant-buyer takes responsibility for most of the repairs and maintenance, so you have less responsibility than a typical landlord. The tenant will pay you monthly rent that may be higher than average, and some agreements are arranged so that a portion of the collected rents goes toward the final closing. However, whether they choose to buy or not, the amount you have collected during the rental term is yours to keep. So either way, you will come out ahead.
A Whole New Market Of Buyers
Using a lease to own agreement will open your home up to a whole new vast market of buyers. There are tons of people out there who want to buy but are not quite able to get the financing they need just yet. They are good people, who may have a blemish on their credit report from years ago. Or maybe they have been hit with an unexpected debt, keeping their loan from going through. By leasing your property with the option to buy, they will be able to get their credit and finances in order, buying your property outright when the time comes. By offering your home as a lease option, you are offering the opportunity to home ownership to someone that may not have the opportunity otherwise.
How To Set It Up
It is important to set the terms you want in the lease to own from the very beginning. You want to make sure both parties have a clear understanding of their responsibilities and the timeframe in which the agreement covers and that there are no questions about what the expectations are at the end of the lease term. Make sure your tenant-buyers understand what repairs you will cover and what they will be responsible for and who will be responsible for the home insurance policy and any home warranties.
In most cases, you will set up a traditional rental agreement and a separate option to buy agreement. Within the option to buy agreement, you will include how funds will be allocated. With the rental payments typically higher than average each month, you will need to decide where that money goes or doesn’t go and outline it in the agreement. Will you set aside a percentage to go toward the tenant’s future downpayment? Or will the rent payments become pure profit for you? Some agreements will also require a down payment or deposit of sorts to ensure good faith by the tenant which you would generally keep in the event that the buyer decides against the lease option or defaults.
What’s The Risk?
You may be worried about a tenant-buyer tearing up your house, but that is very unlikely due to the fact that the tenant is committed to buy the house. Worst case scenario, they don’t buy end up buying your Kansas City house at the end of the lease. You will have made some good money, and the property will still be yours to do with as you please. You can opt to list it on the MLS with a whole new pool of potential buyers, you can rent it out in the traditional way, or you can take on another prospective rent to own tenant. No matter what, you will still come out ahead.
If you would consider a lease to own, but don’t want to do it on your own, we can help. We will contract as your tenant-buyers and serve as perfect tenants. While we sublease the property, we handle all of the details for you and you just collect your rent!