How do I get a lease agreement to lease purchase my home to someone else?

Asked by Twinszz, Memphis, TN Tue Apr 24, 2012

Do I use a realtor or real estate attorney? Does the person's credit matter?

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7
Ron Thomas, Agent, Fresno, CA
Tue Apr 24, 2012
We have gotten a lot of inquireries lately about Lease/Options,
almost all from Buyers who think that it is the easy way to buy a house:
We tell them that it is NOT!
It is a pit, fraught with dangers.
There is no "boilerplate" contract for a L/O; you will have an Attorney draw up the contract.
It can be written any way you want it to; any way you agree to.
It can be dangerous for the Seller too, because it locks you into something that will have work, 2 to 5 years from now.
Probably better than a Shortsale for a desperate Seller, however.
Good luck and may God bless
1 vote
Thank you Ron. I am working with my realtor on that, but, our attention is more on my closing on another home right now. However, the buyer for my current home is anxious to know what we do to get this process started. Like, do we do an inspection or appraisal, etc?
Flag Thu Apr 26, 2012
Tom Cullen, , Honolulu County, HI
Mon May 7, 2012
I sold a property in Memphis under lease purchase. It was originally a rental property. Did it through the property manager. I was told that maintenance and repairs were the responsibility of the BUYER. But I keep getting billed for repairs.

Property was sold November 2011, yet I just got billed over 1k for HVAC work. SIX MONTHS AFTER the agreement was entered into. Property manager never provided any documentation for me when the property was sold under L/O. Needless to say, I'm not happy.

I told the PM to provide ALL documentation so I can have an attorney look at it. Pretty stupid of me 6 months after the fact. TRUST NO ONE!
0 votes
Bob Evridge, , Knoxville, TN
Tue Apr 24, 2012
Twinszz,
Most agents I know are trying to stay away from lease purchases because there are a lot of pitfalls to them.

However, to answer you question...you can search on line for one, or go to Office Depot, Office Max, Staples, etc. and get a boiler plate one. You might also check Legal Zoom.

In my opinion, you should give serious consideration to using a real estate attorney.

Hope this helps.
Bob
Web Reference:  http://knoxcastles.com
0 votes
Hi Bob, I did and decided to use my realtor. Thank you.
Flag Thu Apr 26, 2012
Twinszz, Home Buyer, Memphis, TN
Tue Apr 24, 2012
@ Dave, I will and thank you also.

@ Jo, not feeling so comfy with #3, that is out. however, prior to that, right on board. I would rather pay an experienced Attorney or broker to get things done appropriately.

Thank you, Jo
0 votes
Jo Shaner, Agent, Memphis, TN
Tue Apr 24, 2012
In Tennessee, our lease agreements and purchase agreement forms (TAR) are copyrighted, so we are forbidden to just pass them along to you (an unlicensed person) :o(

I have had several lease purchases to work in my 15 year career, but I have also had a few fall-outs. You must know what you are doing for them to be successful - I suggest you read my next paragraph below. First, you need a "lease agreement" with your tenant. In that lease agreement, you need to spell out time limits for conversion. At, the same setting, you will do a purchase agreement for the sale of your house and what happens if the tenant does not convert into a purchaser.

You have 3 options of writing this up -
1. Hire an attorney (this will be your most expensive route, but you know that it will be safe)

2. Enlist an agent that is savvy regarding lease purchases. Be prepared to pay from 1/2 of the first months rent to the full 1st month's rent as their brokerage, then their commission minus the upfront 1/2 rent when the lease converts into a sales agreement. You do not have to hire them as a property manager and it can be written where the monthly rental goes straight to you.

3. Go to an Office Supply Place, buy prewritten forms, hope they are approved for your perticular state's law, and then pray you don't do anything illegal by accident.
0 votes
Dave DeVos, Agent, Crossville, TN
Tue Apr 24, 2012
Get an attorney.

You have the right to check credit and question any other info about your lease/purchaser. Do it.

Good Luck!
0 votes
Thank you for your response, Dave. How does one person check the credit of another?
Flag Thu Apr 26, 2012
Twinszz, Home Buyer, Memphis, TN
Tue Apr 24, 2012
Thank you for your quick response Ron. I know the person and have known her for many years. She is currently under wage earners for another two years. We are both aware of the pit falls, however, we just are not aware of where to start.

I believe whole heartedly she would be a wonderful tenant, as I have seen her home and the improvements/maintenance she has made on the property, which is a rental.

I need to get a contract drawn up soon, however, I need to know, as the Seller, what do I need to do? i.e., appraisal, inspection, pest control, etc?

Thank you
0 votes
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