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Brian, Both Buyer and Seller in Horsham, PA

Lease to Buy? Orange County, NY

Asked by Brian, Horsham, PA Tue Nov 3, 2009

With my current credit situation I have been informed that a "lease to buy" option may be my best choice. Can someone give me a feel on how this works? I have read online, but I want someone's subjective commentary.

Also, are there many options in the Orange County NY area? Are realtors eager to work on these deals? Could this be a solution for folks that have vacant homes that have been on the amrket for some time and are need of some relief?

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Do you want the option price locked in? A lease/option will give you the option but not the obligation to buy at a specific price for a time certain. Lease payments can partially accrue toward the purchase should you execute the option.
This is a win situation for the buyer because if the prices of homes go down you can simply not execute the option and generally renegotiate to the market price. If home values go up you can execute the option at the agreed lower price and have made a profit going to the closing table OR you can sell the option to someone else.
Be sure the option document reads( "YOUR NAME and/or his ASSIGNS).
This is great thinking for the new economy!
Cheers
0 votes Thank Flag Link Sun Nov 21, 2010
Here in Orange County, NY you will find that folks usually lease or sell a property. It is not common but sometimes a property is both for sale or lease. The owner will either lease or sell which ever occurs first. When looking at one of these properties you would first have to talk to the owners and see if they are willing to commit to selling at the end of the lease period. Furthermore they would have to agree to lock in a price.
While you lease you will have to concentrate on repairing your credit rating.
I have several clients who have the same problem. They have leased a home while they are working on their credit and at the same time are looking at other homes in the area.
Please let me know if you have any other questions MoFridlich@MonroeRealty.com
0 votes Thank Flag Link Sun Nov 21, 2010
Brian,

If your credit is to a point where you will not qualify for a mortgage then renting/lease option is your only solution.

Lease option to buy will give you the time needed to repair your credit so that at the end of the lease you can then get a mortgage and purchase the property. This is a great option. Now the only issue is seeing how much of that money the owner will allow to be used towards the purchase of the home. A realtor can discuss this with the owner and negioate for you.

As far as a realtor working with you. Of course they would be eager. Just so you are aware, a realtor would most likely be paid a small split of the lease as if it was just a rental deal then they would get a fee if you do purchase at the end of the lease. All paid by the seller unless otherwise stated.

With tons of homes on the market, I would look for one that is vacant, high days on market and go for it. Because you can most likely lock in on a price that in 12 months could be a great deal if prices do come up a hair.

Any more questions, just post them here and I would be happy to answer or drop me an email sean.dawes@lnf.com


Sean Dawes
0 votes Thank Flag Link Tue Nov 3, 2009
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