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In My Neighborhood in Roswell : Real Estate Advice

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Activity 1
Thu Aug 23, 2012
Michael Hammond answered:
Any good agent can give you a list of homes for sale and Lease/Purchase, Betty. This seems to be an ever popular question on Trulia. Here are some things we typically send to our clients who might be considering a Lease/Purchase as food for thought when starting the process.

Lease Purchase Basics

•Buyer typically pays the seller option money for the right to purchase the property in the future. This option money may (should) be substantial.

•Buyer and seller agree on a purchase price, often at or slightly higher than fair market value.

•During the term of the lease, the buyer agrees to rent the property from the seller for a predetermined rental amount.

•The term of the agreement is negotiable, but the common length is generally from one year to 36 months, at which time the buyer will apply for bank financing and pays off the seller in full.

•The option money usually does not apply toward the down payment and is non-refundable, although that may change when we represent the Lessee/Buyer .

•A portion of the monthly lease payment typically applies toward the purchase price.

•No other party may purchase the property unless the buyer defaults and the buyer typically cannot assign the lease purchase agreement without prior seller approval.

•Buyers may be responsible for maintaining the property and paying all expenses associated with its upkeep, including taxes and insurance.

Bottom line, get a good agent to help with a Lease/Purchase Contract; it will likely save many headaches and more than a few dollars. Please call or email if I may help further, and Good Luck!

Michael Hammond
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