Hello Belinda,

If you are still looking, I have a 1700+ sqft house in Prattville that
I may do a lease purchase or have a percentage of the rent go
toward a down payment. Let me know at gvine413@yahoo.com

Michael

Belinda,

It is somewhat difficult to find homes for lease/purchase, despite the current market conditions. Even though there are several builders in financial trouble lately, and many homes that have been on the market for many months, the problem comes into play when the builder/seller of the home has to get approval from the bank to keep the mortgage in favor of a lease/purchase.

There are some out there, however.

As the broker/owner of Buck Realty and an Accredited Buyer Rep, I would be happy to represent you in finding a home for lease/purchase. My website is http://www.ginabuck.com, and my phone is 334-657-0939. Contact me if you are interested in pursuing the option. I have worked with other buyers in this capacity before.

Here are various ways to find a home with a lease to purchase option.

To find buy a lease purchase house, you often have to use some creativity. Most aren't listed on the MLS.

If you use a Realtor (a good idea, by the way), your Realtor has to go beyond searching key words. And there are plenty of ways you can find a lease purchase on your own, as well.

There really is no "best" way to find them. It depends on your neighborhood, what you're looking for, what you can afford, your comfort zone. (Are you willing to call up people who are advertising their houses to rent and ask them if they want to offer a rent-to-own? Some people are; some aren't.) So, read through the list and pick 3 or 4 that make sense to you.

Here are just a few ways.

**Using a Realtor**
[Note: If you use a Realtor--which is fine--ask them how they'd find lease-purchases. If they can't come up with more than 1 or 2 of the answers below, find another Realtor.]

--Some lease-purchases (for simplicity's sake, from here on I'll call them lease-options--in other parts of the country, similar arrangements may be called rent-to-own, land contracts or contracts for deed) are listed in the MLS. Not too many, but some. That's where to begin. However, that's not where to end.

--Search for homes that are listed both to rent and to sell. There may not be any comment that the property is a lease-option, and maybe it didn't even occur to the seller. But a property that a seller is willing to lease, but is also willing to sell is a perfect candidate for a lease-option.

--Search for homes that are listed for rent, but were previously listed for sale. It's likely that the owner was trying to sell the house, but wasn't able to. Now he/she is willing to rent it. That's another perfect candidate for a lease-option.

--Search for homes that are listed for sale, but were previously listed for rent. In today's market, there will be fewer of them, but it happens. Again, another great candidate for a lease-option.

--Search for homes with expired listings. The owners wanted to sell, but weren't able to. Many will consider renting the property, especially if it's vacant.

--Search for homes listed for sale that are vacant. The owners are hurting. They might appreciate the cash flow they'd receive from leasing the property.

--Search for homes listed for rent that are vacant. Again, the owners are hurting. And most owners of single family homes are "reluctant landlords." That wasn't their long-term strategy. Especially if they're bleeding, they may just want to get the property off their hands.

***Not Using a Realtor***

I'm not advising doing it yourself, but you certainly can. Any competent Realtor--and there are many--should be able to find you plenty of lease-option opportunities using the strategies above. However, here are a few other ways to do it.

--Advertise on sites like CraigsList for a lease-option. Advertise under both the rental and purchase areas.

--Go through the papers and look for properties that owners are trying to rent out. A lot of them won't be listed in the MLS. Approach them and explain that you'd like to rent their property for awhile, then have the option to purchase it.

--Look for FSBOs. Same basic pitch to them. You'd like to buy their house, but would like to rent it first.
--Choose a neighborhood you like. Knock on doors. Ask, "Do you know anyone in this neighborhood who might be interested in selling their home?" Often, you'll turn up people before the home is listed. Again, you explain you're interested in buying, just renting awhile first.

--Put cards up in your local supermarket.

--Attend a meeting of your local real estate investors club. It may cost $10 or $15, or maybe nothing. There's usually a time near the beginning of the meeting when investors can stand up and offer or solicit deals. You can stand up, too, and announce that you're looking for a rent-to-own. Specify what you're looking for (number of bedrooms, baths), geographic location, type of property (townhouse, single family home, etc.), maximum amount you're willing to spend on rent and purchase, and anything else that's relevant. Print up some one-page factsheets with details. Make sure you put all your contact information on there. To find your local real estate clubs, go here: here: http://www.creonline.com/real-estate-clubs/index.htm

Hello Belinda,

I am a realtor in the Prattville, AL area. I know of several builders that would be interested in a lease to purchase option.

There will be some stipulations. They generally require a large deposit. This could be anywhere between $5000 - $10,000 (This is also considered as downpayment). They will usually just do a 1 year lease to purchase but I have known a few to extend it up to 5 years. Also, you will have to fill out a credit application with the builder, this is usually between $150 - $250 and is non-refundable.

If your interested, I would love to help you out. Please give me a call.

Take care and best of wishes...Tina

Belinda....

I would start by contacting a professional to answer your questions and point you in the right direction. Lease options can be searched for in the MLS. You may want to look at the pro's can con's of a lease option and see if this is the avenue you want to go with as sometimes they are not always a win-win for both paries.

Call a realtor with a large property management company. Ask him/her to discuss owner financing or lease purchase.

works every time.

This is a spammer promoting another site. Real estate pros should abstain and save your breath.

Be very wary of lease - option scenarios. This is an area that is rampant with fraud. I have seen many that have done a lease - purchase option where the seller has taken a sizable down payment and collected monthly payments and then....never made a payment themselves. In many cases, they only way the optionee finds out what is going on is when the notice gets posted on their door and the owner or "investor" is long gone. This has become quite common in California where "foreclosure assistance" companies and con artists offer assistance to homeowners in trouble and convince them to deed over their house in exchange for future proceeds. I would recommend that someone rent and save the money for a down payment and not even consider a lease option in this market. Even when renting something other than an apartment, check out the owners background before handing over your hard earned cash.

Do a search on the MLS with a Realtor for lease to own properties. They have a little box that a search can be run to find in the mls.

Belinda, If you have questions you need to at least interview an agent and see what they have to say. The very fact that you have questions would indicate you need to talk to an agent just to get their prospective. They can probably answer a lot of your questions even if you choose not to hire.

As for the hiring an agent I agree. Your questions of not sure how it woks is the very reason you need help. There are investors that buy and sell property on the rent to own system, and they are not interested in closing with you. There is a lot of room for legal scams.

As Brett pointed out, you have to buy the option. A minimum asking price for an option is around one percent of the purchase price. So for a $200,000 house your option would cost $2,000. That is not part of any rent or security deposit. However it will be part of your proceeds if an only if you close on the sale. If you do not exercise the option to purchase then the option money is kept by the seller.

Now as for rent money being applied to a down payment, there are two forces here. One the seller, are they willing to give up some of the rent and give it to you?

Two the new bank, when you go to get a loan to exercise the option, the bank that is loaning the money will typically only allow the amount of rent that is above fair market rent to be applied to a down payment.

Now you need to ask yourself. If I do not qualify to purchase now, why will you be able to in a year or two? Have you spoken to a mortgage person?

Only speak to an FHA approved lender. http://www.3poundsofrealestate.com/2007/10/22/8-reasons-why-…

Another great thing, FHA is not score driven. http://www.3poundsofrealestate.com/2007/09/30/did-you-know-t…

Good Luck

Belinda,

A real estate agent will be able to help you. With a lease/purchase the seller will probably ask for some money down. have you talked to bank or mortgage company to see what you qualify for?

Belinda:

Yes, contact a professional Realtor. If you do not know one, have a friend recommend one that they have used.

Also, lease options are normally purchased. Lease options are different than just having the owner to agree to "X" amount each month to go toward lowering the agreed purchase price or a "savings account" toward your down payment.

Belinda,

I would recommend an agent, we have far more resources available to us to find these homes. Lease/Purchases are becoming more and more popular at this time because of market conditions.

Keep in mind that when you hire a buyer's agent to represent you, you are not in most cases paying the commission. Under most circumstances it is the seller. It is always a negotiable fee, but like I said usually the seller pays it.

So why wouldn't you want an agent to represent you. If you need assistance in finding an agent in your area, please contact me and I will assist you in doing so.

Best of Luck!

Diane Menard