looking for a lease purchase...not credit worthy for purchase right now...how do I find a good one?

Asked by Dreamer, Ahwatukee Foothills, Phoenix, AZ Thu Apr 7, 2011

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Spirit Messi…, Agent, Tucson, AZ
Fri Apr 8, 2011
Are you working with an agent or Realtor? That would be step one cause they can look for lease options on MLS.

Or, you could look on Craigslist as there seems to be some people looking to make money off of people who can't get a loan for their house. I would urge you to be very careful doing that though. Best of luck.
1 vote
John Conklin…, , Scottsdale, AZ
Sun Apr 29, 2012
I have never really been a big fan of lease purchases. If you have had a foreclosure, short sale, or bankruptcy there are financing options available. You would need a down payment of 30% but that could come from a gift, you would need 5% cash reserves of your own funds. The rates are 7.5%-8.5% and with a large down payment the monthly payments are less than what most homes or lease purchase agreements would cost. When you factor in the tax write off its a lot less than renting a comparable property. The other upside is that you would be able to participate in the market appreciation that is already taking place. Hope that Helps.
0 votes
Jennie Miller…, Agent, Phoenix, AZ
Sun Apr 29, 2012
Another option you could consider is seller finance. I email you a list of homes that are for sale with seller financing and I can walk you through the details on what this means for you. You can call or text me at 480 382 9681.
0 votes
Ann Howell, Agent, Prescott, AZ
Sat Apr 9, 2011
I am not a big fan of lease-purchase. In my experience, the lease amount usually does not cover or barely covers the landlord/seller's costs of ownership, so you will most likely not be given any financial credit for the lease time. As the market swings (in this market - probably down) the purchase price at the end of the lease typically does not represent the market value of the home & the deal is rarely consummated.

I also feel that you would be limiting your options. If you are not in a position to purchase right away: find a comfortable, budget friendly place to live while your credit cures. If you limit your search to lease options - you may end up settling for less than what you want.

You may have to make a second move, but being in a great home in a great neighborhood when you are ready to purchase may well be worth the hassle.
Web Reference:  http://www.ProsperAZ.com
0 votes
Melissa Schw…, Agent, Phoenix, AZ
Thu Apr 7, 2011
DP2 -- In Arizona, we do have listings that show the Sellers are willing to negotiate a Lease Purchase in our Multiple Listing Service. right now, many Sellers are offering Seller Carry Backs to cover the loans for Buyers who are not able to qualify under the new lending standards. Buyers should consult with a Real Estate Attorney before signing Seller Carry Backs as REALTORS are not qualified to review the lending language.

Melissa Schwartz, e-PRO
Short Sale, Foreclosure Resource Certified
Associate Broker
Realty One Group
Web Reference:  http://www.AZFineLiving.com
0 votes
Dp2, , Virginia
Thu Apr 7, 2011
Lease-options/purchases are typically negotiated--not listed. Make sure that you know what you're getting into before signing anything, and you might want to have a real-estate attorney to review your agreements.
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Melissa Schw…, Agent, Phoenix, AZ
Thu Apr 7, 2011
As a Buyer's Agent, I do not recommend any Buyer's sign up for a Lease Purchase. They often cost a Buyer much more in advance than preferred and the statistics of the numbers that actually close are very few. That means that the majority of Buyer's on a Lease Purchase loose their deposits and any funds that were being paid toward a down payment reserve. As a Seller's Agent, I can't argue with a Seller wanting to let a tenant sign up for one. They odds are in the Seller's favor. In fact, I recently watched a Seller rake in several thousand dollars when the Buyer was not able to close out the deal.

Even with our sales numbers almost to record highs in March, pricing is still very low and interest rates are also low. Buyer's doing a lease purchase can't lock in the interest rates because they do not qualify today. A Buyer would be better served to set up a separate bank account and 'pay themselves' the extra money for down payment and reserves for a year and get their credit in line. Then the Buyer is in the stronger position to set their own terms and buy when they are qualified!

Melissa Schwartz
Realty One Group
Web Reference:  http://www.AZFineLiving.com
0 votes
Fred Shocklie, Agent, Peoria, AZ
Thu Apr 7, 2011
You would follow the same steps as when purchasing a home. Because that is exactly what you are doing. Make sure you like the property, do a home inspection and use an experienced full time agent. You might also consider a property that the seller may be willing to carry the note on. A lease purchase or seller carryback are not run of the mill transactions so it is important that you ask the agent you use about their experience in with more complicated transactions. If I can answer further questions, please let me know.
Web Reference:  http://www.morechoices.com
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Greg Paielli, Other Pro, Phoenix, AZ
Thu Apr 7, 2011
Hello- I would reccomend that you wait till you are credit worthy. You will need to be credit worthy in a few years to complete the purchase anyways. If you ccannot improve your creditworthiness in a few years you will not be able to complete the purchase thus possibly losing downpayment money leading to your disappointment. Thx
0 votes
Jason Rush, Other Pro, Phoenix, AZ
Thu Apr 7, 2011
There are agencies/agents/groups that cater to lease purchase properties. You also find great opportunities in a seller carryback. With all lease options and seller carrybacks the pitfalls are in the details and/or the structuring of the lease purchase.
As mentioned working with an experienced agent will be very helpful.
Web Reference:  http://www.ONEpropPHX.com
0 votes
Lorrie Feld,…, Agent, Scottsdale, AZ
Thu Apr 7, 2011
There are some sellers out there right now that are willing to work with a buyer on a lease purchase. You have to be careful not to get involved with someone that is upside down on their home and require a short sale when selling their home. Many times a buyer's agent can call the listing agent to inquire whether her seller would be interested in doing a lease purchase even if it's not specified in the multiple listing service. So it all depends on the sellers situation at the time. The best way to search these out is through a real estate agent.
Let me know if you need any help.
Lorrie Feld
Keller Williams Integrity First
Web Reference:  http://azrealtygroup.com
0 votes
Matt Puzz, , Phoenix, AZ
Thu Apr 7, 2011
Contact a local realtor, the realtors hear about these sorts of things in their offices and also on the MLS. If you need some help give me a call.

Matt Puzz
Amerifirst Financial, Inc.
Web Reference:  http://www.mattpuzz.com
0 votes
Dallas Texas, Agent, Dallas, TN
Thu Apr 7, 2011
With these types of transactions always a Realtor, Much is based on what you can pay monthly for rent.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
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