"Our home: Listing starts at 479,000 say a new potential buyer needs to post 90,000 for 20% down and then be able to qualify for residual."
Most people do not have 20% down. Many have only 10% down, if that much. More have only 5% down or less. The seller doesn't raise or lower the down...the lender does. If they can only get a loan with 20% down, then the seller cannot "reduce it to 12%". It isn't at the option of the seller.
"My thought would be - Lower list price to $24,000 down from original price: To 455K
cut the Down the 20% to about 12% to the most serious buyer- and then allow them the 2 years to reorganize credit score."
It's not likely they would pay 12% in advance, even if they had 12% at closing. The full downpayment is not paid to you up front, only the Earnest Money ($5,000 or so) which you do not get to spend, but must hold in escrow until closing.
"So I would then apply the approx 50K to Principal of Property and give them a 500.00 a month credit in rent for 2 years. ( 12,000) = 62K "
You would be better off reducing your sale price now to $450,000 (not $455,000) and selling it outright.
"Which then when Seattle Market recovers: The house which I am selling for at 455K Now would have in 2 years dropped to $393,000 Due at that time. After Two Years with the reduction of 28K from start and the down and the rent credit- they would basically have 90K in built in equity of house. At time of Sale completetion. Make sense???"
If they agree to buy it from you for $455,000 and it is only worth $393,000 at the time of closing, it won't close as it won't appraise. Reducing their monthly won't help prove that they can afford to buy it. The monthly is usually higher and not lower than market rent.
The lender at the end will not likely see the reduced rent as amount paid toward the purchase price.
1) Just sell it at current market value
2) If you wish to pursue a lease purchase, consult an attorney, as it appears that you plan to keep 12% of the buyer's money from the beginning, and WA Law does not permit you to keep 12% of a buyer's money under any circumstances. Even if they default, the law has a limit of 5% of the purchase price that can be retained by a seller in the State of Washington. There is a limit of 5% of the sale price that can be forfeited, and it is only forfeited (becomes yours) in the event the buyer defaults.
What you are suggesting is that you take $12,000 as advance rent payments at $500 per month and calling it a portion of the downpayment for loan purposes. That is not likely legal, and it also won't likely work.
I suggest you drop the price to $450,000 or consult an attorney regarding other options.