Leasing-to-own is a popular option for potential buyers. Have you spotted your dream house but you do not have adequate funds to purchase it just yet? The lease-to-own option allows you to pay rent for a few years with an intention to buy at a future date. Some sellers are not aware of this alternative. It is a good consideration, especially when the market is low. Part of the rent paid will cater for the down payment, allowing you to clear your credit before seeking a mortgage. Here are tips if you are considering this option:
1) Professional Services
You do not have to worry about finding a lease-to-own listing when you can access americanrealpm.com. Identifying a specific buying alternative can be difficult. Hiring a property management company or agent will make it easy for you to know the available deals. You get to know properties that have been in the market for a while and also new entries.
2) Seller’s Intent
The seller must approve your intent to lease-to-own before signing the contract. As mentioned earlier, some sellers are not aware of this purchase alternative. Discuss with the potential seller and recommend the idea. You will get a good deal especially if the market is low. The seller’s intent should be clear for the offer to be valid.
3) Seller’s Credit Report
It is important to pay attention to red flags when purchasing a property. A seller’s credit report will determine his or her financial status. Some offers are made to offset outstanding debt. Check if your seller has a large amount of outstanding debt. Financial distress extends to the buyer once he or she accepts the offer. For example, you can be evacuated from the premises by debt collectors after purchase to offset the seller’s debt.
4) Lease-Option Vs. Lease-Purchase Agreement
A lease-option agreement allows the tenant to purchase the property at any time during the rental phase. On the other hand, a lease-purchase agreement only allows you to purchase the property once the lease contract is completed. The latter has legal repercussions if you withdraw.
5) Unscrupulous Sellers
Property prices will fluctuate depending on the market status. Some sellers take advantage of price fluctuations to force potential buyers to pay extra cash. Alternatively, they fail to sell you the house at the end of the lease agreement or when you get the funds. Legally, this behavior is not right. However, some buyers do not have adequate finances to hire a legal officer thus end up losing their upfront fees and the property. Consider purchasing through a property management company that has been in the market for a while.
6) Home Inspection And Appraisal
Research and conduct a home inspection to determine that you are getting value from the investment. Getting an appraisal will also help you to know the value of your house if you opt to purchase it at the end of the lease agreement. Real estate agents give good referrals of appraisers to their clients. Remember to get a quotation from the appraiser before hiring them.