Is a "Lease (Rent) with OPTION to purchase a condo" a rental/lease contract or a purchase contract?

Asked by Black Bart, 92562 Sat Apr 14, 2012

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Erica Crittenden’s answer
Erica Critte…, , Riverside County, CA
Mon Apr 16, 2012
This requires a Lease Option Agreement. Home purchase contracts are conducted with the RPA-CA (Residential Purchase Agreement). Lease Options typically require a substantial deposit, "Option Money" that goes towards the purchase of the home. Depending on the negotiation between parties the Tenant has a set amount of time 1-3 years to lease the home and at the end of the agreed period the Tenant will have the opportunity to exercise their "option" or not. The benefits are most most commonly: to the Seller-obtaining an elevated price for their home; to the Buyer/Tenant: an opportunity to work on improving their credit, saving money to obtain necessary financing while securing a home they want before the prices move up too high. For additional information please contact me by cell: 949-337-2008. Let me know what I can do to help!
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Don Tepper, Agent, Burke, VA
Sat Apr 14, 2012

There typically are 2 documents (though they can be combined). There's a lease which pretty much resembles a typical lease.

There's also an option agreement that specifies the purchase price, the time length, the option credits (if any), and those sorts of details.

Some folks include a third document--an actual sales contract--that's pretty much completely filled out. That helps confirm all the details in the option agreement, but the sales contract is contingent upon the tenant-buyer fulfilling the requirements specified in the option and in the lease.

Technically, from a buyer's standpoint, it's preferable that the option and lease all be in the same document. From the seller's standpoint, it's preferable that the two be separate. But either way can work.

As I said, the actual sales contract can be done at the same time or it can wait.

Hope that helps.
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John Hamidi, Agent, Frisco, TX
Sat Apr 27, 2013
Great choice
it has its own cotract
if you need help let me know

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Daniel Will…, Agent, Temecula, CA
Sat Apr 14, 2012
Lease option is a contract that locks in the price now, and you put down a non refundable down payment, the down payment always vary, and goes towards the purchas eprice. Then you lease the property 1-2 years typically with a portion of the rent going to the down payment, the goal would be to have 20% down payment after 2 years so you can get a conventional loan. A lease option can be done on any property, single family home, condo or a commercial property

Daniel Willms
Real Estate Broker 01192011
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