Susan, Home Buyer in Miami, FL

What are the benefits of renting with option to buy? And would you suggest it in "today's" market?

Asked by Susan, Miami, FL Sun Nov 2, 2008

I just saw a condo for sale in Bay Harbor Is, FL. I would like to purchase it but have not yet been pre-approved. I'm thinking I would benefit with renting with option to purchase.

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Hello Susan:

There are several possible benefits in a lease/purchase. At the same time there are potential pitfalls. The agreement must be extremely specific and outline in detail how (and if) the monthly payments will be applied. It is typical, that a certain percentage or dollar amount of the monthly rent is applied towards the down payment or purchase price- It is not mandatory, but typical.

Usuallly, the selling price is predetermined at the time the lease starts. There are many different ways to go about the process. Lease/Option, Lease Purchase - In the L/O it is NOT mandatory to buy at a specific time. However, the option money would be forfeited. In a L/P, it would be mandatory to buy.

The possible drawback or benefit... is setting the price now- If prices increase, you win- if prices decrease you could lose.

In a true lease option, "option" money is given to the seller- that is the cost of reserving the property.

Here is a description of what I mean.

LEASE OPTIONS:
http://www.realestateabc.com/answers/option.htm

LEASE PURCHASE:
http://www.therealestatebloggers.com/2006/08/01/common-real-…

Like in just about all contracts and negotiations; nothing is etched in stone [ALMOST NOTHING] you can carve out a deal that suits the seller/owner and tenant/buyer with the terms and conditions that are agreeable.
0 votes Thank Flag Link Sun Nov 2, 2008
A lease option can be a great way for a person to purchase a property, you need to first get preapproved so you know what price range you should be in and what teh monthly payment will be. they will be able to tell you if you are qualified now how much you will need or if you do not , what you have to do to be qualified. Make sure you negotiate the lease and the purchase. Everything is negotiable. Negotiate a sales price and ask the owner to build in 3% back towards closing ocsts when you do close, in the lease make sure at least 5% of the sales price is credited to you if you close as well. they can take that amount and divide by hoe many months the lease is. you really should have a buyer broker who can assist you with this. in most cases you can negotiate with the agent so it does not cost you anything out of pocket as they get paid by the listing agent at closing. This way you have someone looking out for your interests and who can assist you through each step of teh buyeing process. good luck with your purchase.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Nov 2, 2008
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