If a Seller has a home sitting vacant on the market, and they want to get a certain dollar amount out of a house, they have only a few options:
1-- They can rent the home and wait for the market to improve. This can be risky. If they are paying two mortgages, and a renter walks away, they have a small deposit to cover them. If the renter quits paying, they have to follow rules for eviction. Then get another renter. If they fall behind on payments, foreclosure proceedings get started.
2-- They can do a short sale. This can hurt their credit. If they are not already in another home, it could make it difficult to rent or buy.
3-- They could let it go into foreclosure. This will really hurt their credit. ... For a long time.
4-- They can do a Lease Purchase .
This is what a Lease Purchase entails:
1-- They list their home on the market with Lease Option Available.
2-- A potential Buyer puts in a contract to purchase a year later.
3-- A lease option is drawn up by an attorney.
4-- Usually a sizable NON-REFUNDABLE deposit is requested. The deposit is the only money applied towards purchase, monthly lease payment does not.
5-- At the end of Lease period, the buyer should close on property.
During the Lease Purchase Term, the home owner must keep up with Mortgage payments , HOA if required, Taxes, and home insurance. The buyer now bears responsibility for the property itself and is required to get insurance for their contents.
If you hare considering a Lease Purchase, make sure you understand the lease and the responsibilities.
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