a house on the market for over 187 days. I don't have the perfect credit and was interested in offering the seller a lease purchase deal .

Asked by Araina D. Thompson, Philadelphia, PA Sun Sep 9, 2012

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Ann Brice’s answer
Ann Brice, Both Buyer And Seller, Wilson, NC
Wed Sep 12, 2012
Lease purchase options are complicated and not a win-win solution. Reportedly, only 10% of lease purchases result in the home getting sold so a seller needs a large non-refundable deposit to cover the cost of putting the house on the market again (for example, repainting and new carpeting) after the tenant leaves. If the buyer pays the large non-refundable deposit and then decides not to buy the house, they lose that deposit money which they wouldn't have had to pay had they selected a normal rental. Also the seller usually requires that the buyer pay more than a comparable rental price with the extra money going toward a down payment.-- more money that a buyer loses if he doesn't purchase.

If the house isn't in move-in condition, the owner may not have much to lose in renting it, so he may not ask for a large deposit which would make it more economically practical to the buyer, but would that be a house you want to buy?

If you pay a deposit, you have to worry about the seller declaring bankruptcy or letting the house go into foreclosure while you are staying there, in which case you probably won't get the deposit back and may not be able to purchase the house. You can overcome this problem by having an attorney act as trustee and hold the deposit money. You definitely need an attorney to write the lease purchase agreement so that you are protected.

If I were advising a seller, I would ask why they think that a buyer who doesn't have good enough credit now is likely to be any better in 6 months or a year. If the seller wants to sell, they are just delaying the sell date and will have to prepare the house again to put it on the market.

I would generally advise against lease-options,
0 votes
Callie Willi…, Renter, Claymont, DE
Tue Mar 8, 2016
that was an accident sorry
0 votes
Callie Willi…, Renter, Claymont, DE
Tue Mar 8, 2016
I did a lease to purchase for 6 mos with FHA loan. My "security deposit" was to be considered my good faith down payment. I held up my end of the deal but the seller did not want to do the repairs that was required by the inspector. She wanted to sell as-is but the realtor did not advertise it as such and she did not say any of that until after she saw how bad the inspectors report was. I can not buy this house not only does it not make sense but FHA will not even pay for this house in its present condition. The lease was to give me tie to secure the lease , which I did and the seller opted out. I have a lease where that was only in place so that i could purchase the house but now that I cant, through no fault of my own, can she hold me to the lease and keep my security deposit. We both were in agreed that neither of us was interested in a landlord tenant relationship. but now since she cant sell the house because she cant afford to fix it, she wants keep me here longer to make money off me. With a lease that was never meant to survive because I was to own the house. Is there anything that I can do?
0 votes
Araina D. Th…, Home Buyer, Philadelphia, PA
Wed Sep 12, 2012
Would a offer of rent to own work when selling is not working
0 votes
Kim Glass, , San Francisco, CA
Wed Sep 12, 2012
Hi Araina,

Do you have a specific question that you want our real estate experts to answer? If so, post here and hopefully we can help get them answered for you.

Thanks!
-Kim, Community Manager
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