Rent vs Buy in Phoenix>Question Details

Shanda,  in Avondale, AZ

Has anyone had experiences with Lease Purchase Agreements? Good or Bad- I welcome input

Asked by Shanda, Avondale, AZ Thu Feb 12, 2009

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They are just as you described, they can be good or bad.

Scenario one: leasee options and moves in thinking they will purchase. 1 year goes by. The property values drop. Leasee wants price lowered. Seller wants the agreed value. Woops....

Scenario two: What Rick Said. They move in thinking they can clean up their credit and low and behold they buy that new car and guess what, woops....

Scenario 3: Leasee puts down 10k as a deposit to be used for EM in the event that they want to purchase the home. 1 year ends and they decide not to purchase the home. The seller accepted the deposit instead of the title company as a neutral escrow and spent the money to catch up on the payments. now it's gone, woops...

There are so many way a deal like a lease option can go wrong in a market like this. Usually it favors one party over the other and that isn't good for anyone. Best to stay with the traditional purchase option until the tide turns and stability comes riding in.

But the choice is yours...

All The Best,

Stew Keene
Signature Realty Group
Scottsdale, AZ
0 votes Thank Flag Link Thu Feb 12, 2009

My experience with lease purchase agreements is that buyers want to do these because they don't qualify for a mortgage. The sad fact is 90% of the time when the time period ends for them to get the actual loan they still can't qualify and they end up losing the property. A past client of mine does a lot of these as the owner/seller. He has sold the same property 4 or 5 times and made money each time.
0 votes Thank Flag Link Thu Feb 12, 2009
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