Right now, many sellers cannot afford to make their mortgage payments. I have seen where the buyer is making their rent payment, but then the owner is not paying the mortgage. The next thing the buyer knows is that the home is in foreclosure. That means the buyer will generally not get back any of the money they have given as earnest money or security deposits.
It is also a big risk on the buyer. If your credit is not where it needs to be now, there is no possible way of you knowing it will be acceptable in a set amount of time.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
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Prospect Mortgage offers a full selection of mortgage programs including:
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Lease with Option to Purchase is more intricate than the traditional sale. You and the sellers have to come into agreement as to the purchase price and the terms and conditions of the lease with option to purchase.
Since the expiration of the lease can be a year or two from the day the contract is executed, you are talking about buying the property in the future with the market value pegged at its current market value or more than its current value.
There are risked involved for both parties. Because the seller is taking a bigger risk, they may ask for a large amount of option money to recoup potential loss from damages that may be incurred if the buyer/lessor do not commit or fail to consummate at the end of the lease.
A lawyer is best equipped in drafting the legal instrument for this type of transaction.
Best of Luck.
When a home is sitting vacant, it can be hard to understand why the seller wouldn't at least want to rent it until it sells.
Unfortunately, many renters don't treat properties with the same respect as if it were their own. As a result, whether it was a straight lease or a lease-purchase agreement that didn't close, a home that was move-in ready in the beginning may have to be repaired again before selling.
Plus, homes can't be shown without the tenant's OK. I have had first-hand experience with uncooperative tenants who had to be evicted before we could get it cleaned ... again ... and immediately sold.
I strongly agree with the advice given by some of my fellow Realtors. Do a straight rental agreement until you have been able to get your credit in order and some funds saved for a down payment.
In order to help folks reach their home buying goals, I have been referring prospective buyers on the edge of being ready to Baldwin Housing Alliance http://(www.baldwinhousingalliance.com, 251-279-0461) for free counseling. It is a non-profit program to help folks review their current finances to determine if they are ready to be homebuyers. If not ready, they will give you tips on what you can do to gain control of your home-buying future. They can also help you determine if you qualify for special loan and/or down-payment assistance programs. Tell them I sent you, then give me a call to help you with your home hunt once they've given you the "Ready" green light.
You are desperate!
Your Credit or Finances, or both, will not allow you to go the conventional route:
You need the Seller to help you out!
The Seller will know it, and you are going to pay dearly for this service:
There aren't too many altruistic Sellers out there.
The terms that can be written into a Lease/Option can be dangerous to you:
How long is the Option period?
How much money are you putting in to the Option?
What happens if you are not able to execute the Option?
How do you know what your financial situation will be 2-5 years from now?
How much is the rent in the meantime?
Who will be responsible for maintenance and repair in the meantime?
What will be the Market Value of the home in 2-5 years?
What will be the Selling price 2-5 years from now?
This is the Ultimate Caveat Emptor!
Just rent and buy when you can.