We basically outlawed this in Texas about 3 years ago. You'll still see signs around, but these people are either violating the law or think they have a scheme to skirt the law. All the good real estate attorneys I know say just don't do it. If you need to rent, then rent. When you are ready to buy, then buy....but don't mix the two up. My advice is to rent as cheap as you can for a couple of years. Rent way way below what you can afford. Sack away the cash difference and work on your credit. Credit is not so hard to fix in most cases. Pay on time, pay off big balances....pay off collections. It can be done. Two years down the line you are in a great position to buy.
The lease to own or rent with option are normally just bad deals for the buyers/renters....stay away from them is my advice.
There are some homes available for lease with option to buy. As stated below by other professionals, most are not favorable for buyers. What is attractive to you about a lease / option? Do you need more time to save for the down payment or work on your credit? I would like to hear more about your criteria for a home & offer some options. There are some great loans and grants available for qualified buyers.
Email, call or text me so at your convenience. I am available anytime to help! Click on my photo for my profile & more information.
Elizabeth Scarlett Morgan
Beam Real Estate
14455 Webb Chapel Rd
Farmers Branch Tx 75234
How to find them? Here's a blog I wrote on exactly how to find them: http://www.trulia.com/blog/don_tepper/2010/03/how_you_can_fi
However, there are significant restrictions on lease-options in Texas--restrictions that aren't imposed in the other 49 states. Nicole's answer refers to this. If that's the route you choose to go, and you choose to work with a Realtor (as my blog points out, some will be found on the MLS; others won't be), please make sure you're working with one who understands Texas law.
And while it's good advice for any tenant-buyer to have a lawyer review lease-option paperwork, it's even more important in Texas.
Hope that helps.
Focus on finding the home you want, and then worry about how to make that happen. Get pre-qualified for a home loan first, so you familiarize yourself with how the rules of lending are going to impact your purchase. Then, work with a qualified local agent to locate the homes that will suit you. They don't even necessarily have to be listed for lease. They may only be listed for sale, but the owner may still consider a lease-to-purchase scenario once the idea is presented to them. Some sellers won't, but many are more open to the idea than they have ever been.
There are homes in every price point that will accept a lease-to-purchase, or a straight lease, to allow the owners to make their next move. The owners have an equal number of concerns to the tenant/buyer these days. The owner is concerned the tenant/buyer may not pay the rent, and the tenant/buyer is concerned that the owner may not use the rent payment to pay the mortgage. Fear halts some from even entering this type of relationship. Too many unknowns. But, we've had surprising success with this scenario for three reasons: 1. Strict qualification of tenants 2. Full disclosure of both seller/landlord and buyer/tenant financial circumstances, and 3. Well negotiated lease agreements and/or lawyer-drafted lease-to-purchase agreements.
Have a blessed day!
Contact my office I work with many families lease to purchase homes
Direct Link for homes available in Carrollton
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
You found the perfect place to live, but for some good reason, you are not able to buy now. A lease with an option to buy helps you to lock-up the house you want, paying rent to live in the house you ultimately want to buy and guarantees the seller you'll buy the house in the future or forfeit a deposit that makes it worth the seller's time for removing it from the sales market.
Using a Realtor who is knowledgeable about rentals as much as sales is important becasue there are two separate contracts to negotiate; a lease and a sales contract. Will a percentage of the rent you pay go toward the down payment of the home? Who pays for repairs during the lease and do those improvements affect the value of the home at time of purchase? How much is your option/down-payment and when does it become non-refundable?
If you're better than 90% sure you want the home and can afford to forfeit the option money of you don't buy it, then a lease option is for you. Want more details? Write me a note at email@example.com
Many times a buyer gets into this type of transaction because they want to own but do not have the credit and or money to purchase. Most of the time the property is overpriced and the terms are not in the buyers favor.