A lease to purchase can work. There are two sides to every coin though and you need to understand what risk you might be taking.
First, Bill is correct in that you should try and capture at least a sizable down payment so that if the potential buyer decides to back out, you have a sizable nonrefundable deposit of their money to pay for the paint, carpet cleaning and or any repairs that renters or lessors leave behind.
Most lease purchases involve people with bad credit so you need to examine the potential buyers ability to purchase. Have they spoke to a lender already that can issue you a letter stating that in 1 year they would be able to purchase if they pay off their debt and clean up their credit?
I would use a Realtor to orchestrate the transaction that has done lease to purchase sales because you are going to have to negotiate on a price that works for both of you. Attorneys don't do that.
The issue with lease purchases or even Wrap loans carry is that market shift can effect the purchase.
If your home goes down in value even with a sizable deposit the potential buyer might decide to walk away leaving you with two mortgage payments.
If your home goes up in value you may want to increase the price instead of honoring the lease purchase.
We've just touched the tip of the iceberg here.
So many things to think about and that's why you should have an experienced Realtor working with you.
Which ever direction you go, I wish you success.
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Keller Williams - Scottsdale, AZ
2008-2009 Master of Real Estate award recipient
ABR, GRI, ePro, CNE, MRE, AHWD... more