BEST ANSWER
FIRST ANSWER
Kathy, Lease options aren't always the easiest to find, but they do come up occasiionally. It's how I purchased my home about 7 years ago. One bit of advice however- in today's market be VERY careful and prudent if you do a lease option. I had one woman call me- probably about a year ago. She had put $18,000 down, paid her agreed upon "rent/option" portion- which as, as usual, higher than going rate in her area- and after something like 9 months, came home to find that the home was in foreclosure. The seller had not been making payments the whole time. Needless to say, her $18,000- plus all of her other money paid in was never to be seen again- and to add insult to injury- she had the expense of moving!
I caution anyone thinking of doing a lease option to make sure that the paperwork is structured in some manner that any and all of the portion of down payment and option money goes into some sort of escrow account until the purchase is made, with the contract VERY clear on how and when you would get that money back. I also suggest some sort of written agreement on the purchaser being able to make certain that payments are being made to the mortgage- perhaps by you making the payments directly.
It's very sad, but in this day and age people get very strange when confronted with financial issues, and do things they would never do otherwise.
Kathy, another thing people don't always realize with a lease/option is that you need some "good faith" money to put in it at the start- which is money you don't get back if you don't follow through with the lease/option. There are times that, at the end of your contract- you still may not qualify for a loan- due to the lender's guidelines. If that happens, you are out your good faith $$$. In addition- you typically pay "rent" which is above and beyond the typical rent. Let's say going rate rent is $1,600 on the home. You may pay $2,000 to the seller/landlord. However, only the amount above and beyond the rent really goes toward the purchase, in this case $400.00. That's what would go into the "escrow" account.
Buyers don't often understand this part of a lease/option, and think the whole amount is going toward the purchase.
You may just be better at having a lender look at your credit, see if you can qualify, and do a regular purchase. With your credit score you should be able to do so. If you can't do the purchase right now, saving that same money you would be putting toward a lease/option for a year or so may put you in the right place to do it "clean".
Give me a call, let's see what we can make work out for you! I love making things work in difficult situations!
Sincerely,
Patti Phillips
"Advice You Need, Attention You Deserve"
800-680-9133 or 619-507-2100
Sat Sep 26 2009, 06:53
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