Home Buying in Exeter>Question Details

M., Home Buyer in 92591

Looking for a Lease Option on a home in Exeter/Portsmouth areas....

Asked by M., 92591 Tue Jan 20, 2009

purchase price to be between 400-650k. Lease terms - would prefer 2 year with option to extend 1 more year before exercise of purchase option, but would consider shorter term. Need a home yesterday....so any help is appreciated.... thanks

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M. your best bet would be to work with a buyer broker who can assist you in finding a home that is for lease that they would be willing to do the lease option. Sellers who choose the lease option as a way to see their property will want to make sure you are able to purchase at the end of the 2 year period, they often ask for a small deposit for the property for the sale side, as well they will want a prequailfication letter as to what you will need to be able to quailify in 2 years rather than just purchasing now. If you would like some assistance please contact me and i can point you in the right direction. There are some very nice homes in teh price range you are seeking but i would need to know what is the monthly payment you are looking to stay within as well as what is your time frame. i hope i can help.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Jan 21, 2009
Dear M.

Your question: "Looking for a Lease Option on a home in Exeter/Portsmouth areas....purchase price to be between 400-650k. Lease terms - would prefer 2 year with option to extend 1 more year before exercise of purchase option, but would consider shorter term. Need a home yesterday....so any help is appreciated.... thanks, M.

Often buyers find themselves asking for a lease option but in fact only want a rental, with a "first refusal" right.

Rentals with right of first refusal, tend to be simple leases--and as the rental term comes to an end, the seller announces to you (first) what he wants for the property and then you decide if you want to make the purchase. If you do, then you will execute a P&S, if not the landlord will list the property for sale.

Lease options on the other hand, are formal contracts and unlike "rights of first refusals" are not free, they are purchased--and they give you the right to buy the property at a pre-determined price at a pre-determined time in the future. Failing to exercise the option means you will lose the money you paid for the option.

Just to be clear, if you wanted to buy a $500,000 (today's value) home in Portsmouth but not close for 3 years, you might offer $15,000 today for the option to buy the same house for $550,000 in 2012.

In 3 years, at the time to exercise the option, the house is worth $650,000--then you will make $100,000 when you close*; if on the other hand it is still worth $500,000 you can buy it and overpay $50,000, or decide not to buy it and lose the cost of the option ($15,000)

*finally, if you find the house is worth $100,000 more at settlement than you have contracted to pay for it, you can sell the option, for up to the difference ($100,000 in this case), without actually closing on the home or personally taking possession.

Good Luck

Dane Hahn
Keller Williams Realty ~ Portsmouth, NH ~ 603-566-5460
Tarpon Coast Realty ~ Boca Grande, FL ~ 941-460-8979
0 votes Thank Flag Link Wed Jan 21, 2009
Before you go into a lease ask your self is the market stable and you want to lock in today's price or just rent and take what you get 2 years from now? You might be setting your self up for lost deposit in the end if the house will not appraise for what you think is was to be? Will the seller give you a reduced sales price if it does not appraise? Wonder if rates go to 8% can you still qualify or do you want to. You might want an attorney review the paper work before you sign. Last question if you think the seller can credit you your payments get it in writing before you sign and do you know if that rule will still be honored 2 years from now? All loan rules changed about 180 degrees in the past 6 months so watch out. Good Luck

Tom Inglesby, Broker
RE/MAX Equity Group
0 votes Thank Flag Link Tue Jan 20, 2009
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