Home Buying in Haughton>Question Details

Kim Parnell, Other/Just Looking in Haughton, LA

Lease purchases

Asked by Kim Parnell, Haughton, LA Fri Oct 12, 2007

Any available in area.

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Answers

7
Hi Kim,
If you need to place a deposit upfront, I do not recommend that you enter in to a lease/purchase. Your deposti is at risk for a length time, and statistically, most do not materialize into a sale. If you can enter into a lease/purchase where you simply pay fair market rent and then convert into a sale, it is worth considering. If a deposit is involved, it should be relatively small. If the lease/purchase term is short, 6 months or less, that is far less riskly.

Lease purchases are available in many towns. A local Realtor can tell you what is currently available. Also, if you are looking for a short term lease/purchase, your Realtor can approach seller agents and propose that as an option to their sellers.
1 vote Thank Flag Link Sat Oct 13, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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There are... but this is not your best option.

Buy a home.
1 vote Thank Flag Link Sat Oct 13, 2007
Lease options are not always best as someone looses when you determine your purchase price upfront for some date in the future.

I would recommend a purchase.
0 votes Thank Flag Link Sun Nov 11, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
There are some available, mostly on commercial with a substantial "downpayment".
Web Reference: http://www.iansellsnola.com
0 votes Thank Flag Link Mon Oct 22, 2007
The theory of a lease purchase is fine, however in practice in the past few years it has left more grief for would be buyers than ownership opportunities. Wily investors advertised lease purchases to unsophisticated consumers desperate for a chance at ownership. The cagy investors structured the lease options to maximize the cash flow to the investor (the seller) and to minimize the opportunity for the renter to have a fair chance to attain their ownership dream before the expiration of the option.

These transactions usually occurred without the involvement of a Realtor.

There is nothing inherently wrong with the lease option. It is very possible to create a lease option that is fair to both the buyer and the seller. I only caution you because it has been greatly misused in the past few years.

The link below goes into more detail on the dangers of lease option for unsophisticated consumers.
0 votes Thank Flag Link Sat Oct 13, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Most states have lease with option to purchase or lease with a right of first refusal option laws, that must be followed when structuring these types of transactions, New Mexico has statutes to that affect.
These types of transactions are meant to allow the parties to enter into a transaction that would allow the buyer use of the property now and the right for time to consider the purchase of the property at a future date at now agreed to terms, and the seller to create income on a property that would otherwise be a cost liability.
They are also used in situations in where the buyer has not accumulated enough money for a downpayment for a regular loan qualification due to certain circumstances, it does not necessarily mean the buyer is a dead beat. This method allows the buyer with say a new great income job, but not enough savings now, to monthly accumulate the downpayment that will be required to purchase the property at a future date.
It could also be used when the buyer/renter is not sure of a new job and it's stability. These types of programs are available in all states, but again the real estate licensee should check the state's statutes to determine what exactly is needed in the paper work. Here in NM our agency executes an agreement which stipulates the meeting of the minds of the parties and we then execute a lease and a purchase agreement which are attached to the agreement as exhibits.
In the case of the buyer, the costs (monthly) associated with a lease with an option to purchase are usually the rent amount and since it is a rental there might be a damage deposit involved, and an additonal amount to accumulate towards the purchase in the future, if the option to purchase is not exercised then the additional amount becomes rent. The lease with a right of first refusal acts the same with the lease part as to costs but there is usually one charge up front for the seller to grant the buyer the right to match any offers in the future from others, that the seller is willing to accept.
In the offer to purchase that is accepted for exercising in the future both regular bank financing can be used or the seller can option to finance the purchase if the option is exercised.
Ask a local licensee that is familiar with these types of transactions to assist you, (please don't use one that doesn not know how to do these, otherwise I can assure you, that there will be trouble) all you have to do is present the program to the seller and negotiate the terms if the seller accepts these types of programs.
0 votes Thank Flag Link Sat Oct 13, 2007
I disagree with Ed below. Whether or not a lease/purchase is a good option for you depends on your situation. I have mortgage lenders as clients who have used a lease purchase to buy, since their personal circumstances preven them from buying right now, but they know they'll qualify in 6 months. You should consult a Realtor and Lender and together determine what your best option actually may be.

There will always be sellers open to the idea of a Lease/Purchase. Some will be advertising that they'll do this, but most won't. Your Realtor will have to call and ask on a case by case basis. There are many motivated sellers out there, and those are the ones most likely to be open to a Lease/Purchase.
0 votes Thank Flag Link Sat Oct 13, 2007
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